As Poslovni Dnevnik/Suzana Varosanec writes, the Crikvenica-based hotel company Jadran was saved from bankruptcy´s proverbial jaws. After that, and after going through all of the associated pre-bankruptcy agony, it was privatised under the ownership of two pension funds and is currently facing a unique challenge, very well known in the Croatian hotel industry to smaller entities.
As touched on above, during the difficult pandemic-dominated year of 2020, Jadran Crikvenica was one of the few large Croatian hotel companies to significantly expand its business capacities, partly through the long-term lease of new capacities and partly through the reconstruction of existing capacities started back in 2019.
Could that fateful decision now end up firing back at them like a boomerang? Possibly. The treatment of new units when it comes to being permitted state aid for job preservation is not yet known and it is doubtful whether the development will be treated positively in order for the company to use this measure in the continuation of business activities in rented facilities for the Easter period. Perhaps it is better not to begin working yet, in the case that the turnover of accommodation units which were not in use back in 2019 is not excluded from the company´s income.
All these investments bring greater competitiveness and higher prices, and thus the comparison of revenues in 2019 and 2021 should be taken with a grain of salt. Things, under these dire circumstances, continue to sit firmly in the hands of the state, which would have no real negative effects if Jadran Crikvenica, as well as other such smaller entities in the tourism industry, were to be approved such measures, because if there was no lease agreement, the financial aid would be paid out to the actual hotel owners.
The high level of indebtedness of the parent company and the Jadran Group does not jeopardise current liquidity, but it is a logical business interest that the capacity for hotel business within Jadran Crikvenica, which increased by 25 percent last year in the sense of solid capacity and more than 17 percent in terms of total capacity, do not just sit there empty.
They still have a lot of units of lower categories, but for the second year in a row they have to consider the Lisanj Hotel in Novi Vinodolski, which will have 220 accommodation units, and the Garden Palace Resort in Umag with 109 such units. Hotel Noemia in Baska Voda also has 63 4-star accommodation units.
All these new capacities were created as a classic “green feel” or through the reconstruction of existing old capacities of a lower category. These are facilities that are new, and were taken out on a long-term lease precisely in order to create the preconditions for extending the tourist season, and thus enable the better use of existing resources, with an emphasis on the employment of permanent workers.
While the Esplanade Hotel in Crikvenica opened its doors this Monday, for the hotels in Novi Vinodolski and Umag, as they claim, management wants the same because of the high quality and the fact that they are located in destinations one can more or less easily drive to.
“By opening up these facilities, we want to send out the message that we are here, we´re present on the market, and that we are above all else confident in these new circumstances, and that is why we want to enter the market as soon as possible,” said Jadran Crikvenica´s CEO Goran Fabris.
With the earlier opening of these facilities, new revenue wil be generated, the local tourist board will be able to collect the sojourn/tourist tax, the state will get its VAT, and employees will actually be able to do some work, which brings with it higher salaries. However, the prices realised in the early season are not at the level of those in the peak of it, so profitability is naturally reduced. Looking exclusively through the glasses of maths, sometimes it is better not to work and exercise the right to grants instead, than to work and lose that right entirely.
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