ZAGREB, July 22, 2019 – The Social Democratic Party (SDP) said on Monday that increased wages and investments into quality tourism facilities and services, along with a reduced Value Added Tax (VAT) on hospitality and accommodation, were strategic objectives for the tourism sector because value for money was important to tourists.
“Our efforts in the tourism sector have to be directed at improving quality because people working in tourism are warning that all those who have invested in quality over the years are not experiencing any problems with occupancy,” SDP MP Branko Grčić, the author of the party’s proposals relating to the tourism sector, told a press conference.
Improving the quality of tourism facilities and services has to be the number one priority, he added.
He is concerned about attempts to compensate the shortage in demand by raising the price of services, saying that this is wrong because it could later cause additional problems in the tourism sector.
It is essential to see if data on the number of tourists indicate negative trends and what estimates of the real financial effect of the tourism season will be like, Grčić underlined. He added that emphasis however should be on the number and quality of services provided and consequently on the revenue generated.
“The most important thing for our guests is ‘value for money’, and whether they are getting the services they deserve for the money they are spending in Croatia,” he said.
Grčić reiterated that the SDP wanted the government to reduce the 25% VAT on hospitality, which is the highest in the EU, to 13% and see if there was any room in fiscal policy to cut VAT on accommodation next year or the year after that from the current 13% to 5%. He added that this does not mean that prices should be reduced but for wages and investments in tourism to be increased.
He noted that a similar thing had occurred in 2013 when VAT was reduced to 13% and that in two years’ time the number of those employed in tourism had increased and that revenue and investments doubled.
Grčić called on Prime Minister Andrej Plenković to refrain from reducing the general VAT rate from 25% to 24% because that would be throwing money away if the effect is not felt in one’s pocket while that money could be more effectively used.
“Once again we reiterate, let’s help the tourism sector to be more competitive, so that it can increase wages for its workers and be in a position to further invest in quality,” he said.
The head of the SDP’s Pula branch, Sanja Radolović, recalled that when France and Germany reduced their VAT rate that had a positive effect, directly contributing to new jobs being opened and increased investments in hotels. She said that it was necessary to discuss reducing VAT with large hotel groups so that they increase net wages by at least HRK 2,000.
She also recommended reinstating the dual education system in tourism and hospitality schools where students attend classes for half the year and then do practical work in the second half of the year and during the tourism season through student contracts with future employers.
“At that time, we did not have a problem with a shortage of workers and that is a demand that we will address to the Ministry of Science and Education,” she added.
More news about Croatian tourism can be found in the Travel section.
