Travel Agency Income Has Increased By 54 Percent Since 2010

Lauren Simmonds

Good news for domestic travel agencies!

As Marija Crnjak/Poslovni Dnevnik writes on the 5th of August, 2018, in the period from 2010 to 2017, the number of active travel agencies in the Republic of Croatia grew by a massive 44 percent, from 870 to 1,254, and with that, their total revenue grew by 54 percent, from 3.3 billion to 5.1 billion kuna. The number of employed persons also reached a total of 5,540 in 2017, which is 20 percent more than in 2010.

Despite the gradual decline in the number of overnight stays with the intermediation of domestic travel agencies of about 13 percent, since 2007, this industry has continuously increased the added value of its services. These increases resulted in the growth of their business income by almost 70 percent and the growth of the number of employees by 17 percent for the ten year period between 2007 and 2017, this analysis was conducted by the Croatian Chamber of Commerce (HGK).

“This growth in activity revenues, while there’s a reduction in the number of overnight stays, confirms that tourists who book through agencies are those who spend more and use extrabudgetary facilities in the value-added package. This involves eno-gastro, adventure, health, cultural and all other [tourism oriented] products that involve special themes and interests, which then simultaneously move Croatia from the image of a sunshine and sea destination, to full capacity in the off-season, and enables year-round tourism,” said the President of the Association of Travel Agencies of HGK, Boris Žgomba, when commenting on these encouraging results.

”The drop in the share of travel agencies in the total tourism sector’s turnover is the result of the unequal market competition of domestic agencies with other participants on the market,” Žgomba claimed.

Namely, if a company’s accommodation for an employee is booked directly through the hotel, it reserves the right to deduct the tax, while when doing so through a travel agency, there’s no right to do so implied. This regards EU regulations that are directly related to such matters, and in this case, a service like this is not covered by such a directive.

This was also confirmed by the study on the impact of the special taxation process on EU agency operations commissioned by the European Commission last year, which has now issued a recommendation to exclude B2B sales from the directive’s scope in the future.

“Since a large number of European Union member states already apply the above, we expect that our Ministry of Finance will also positively resolve this situation before the compulsory EU-level implementation,” said Žgomba, adding that the Association was in intensive contact with the Croatian Ministry of Finance, led by Zdravko Marić, on this issue.


Click here for the original article by Marija Crnjak for Poslovni Dnevnik


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