December the 29th, 2023 – Croatian tourism price hikes have been a hot topic this year, but has long term damage been caused as a direct result?
As Poslovni Dnevnik/VL/Radmila Kovacevic writes, this year’s tourist season was marked more than anything else by the apparently endless debate about prices along the Adriatic coast. The results themselves, the number of guests and overnight stays realised all aligned with the figures from back in 2019. Despite all of that and the currently expected record revenue of 14.5 billion euros, it all remained somewhat in the shadow of a scoop of ice cream costing an extortionate four euros.
Of course, a scoop of ice cream is symbolic of hosts who didn’t hesitate to engage fully in Croatian tourism price hikes in 2023. Domestic tourists were let down enormously by their own country this summer, foreigners have also been very unpleasantly surprised, the media is full of articles about Croatian tourism price hikes, and the headlines are full of related controversies.
Are Croatian tourism price hikes set to cause long term issues?
From “Prices aren’t a problem” to “Greed on the Adriatic”, as well as “Croatia is a hit, but many aren’t sure they’ll return next year” – we’ve had all manner of headlines this year. What was happening in the hotel’s sales department? What kind of calculations did private landlords and restaurateurs actually make? Will Croatian tourism, with the status of a Mediterranean favourite from the years of the coronavirus pandemic, experience long-term damage due to admittedly shocking Croatian tourism price hikes in 2023?
Croatian tourism has largely soared on the wings of unexpectedly good pandemic-dominated summers, and, on top of that, the spring announcements said that the demand for holidays in this country from elsewhere across Europe was far from abating. All together, it seemed a few little additional price increases might go unnoticed. However, on the wave of excellent demand, prices rose very significantly last year. Last year, accommodation in hotels and camps went up by 20 to 25 percent on average, and this year – we had a pure repeat. Cumulative price increases over two years have thus reached fifty percent higher amounts compared to the last pre-pandemic season, and this is far from an easy pill for the market to swallow.
Croatia is no longer an affordable Mediterranean destination in summer
By the end of this tourist season, the big price swing of the Croatian Adriatic coast from (relatively) affordable to expensive and a final move away from the important comparative advantage of Croatian tourism so far became very apparent. For Western Europeans, Croatia is definitely ceasing to be a country which offers an affordable summer break. Until recently, tourists from Western European countries, who are also this country’s most numerous guests, were very unpleasantly surprised.
However, to be honest, it should also be said that along the Adriatic, parallel to the Croatian tourism price hikes, the quality has also increased. Maybe not as systematically and as visibly as some may hope, as is the case with the price increases, but it’s only logical that higher and higher quality costs more and more. After all, it is no secret that Croatia’s ambition is to become a European boutique destination and that for some time now it has been oriented towards higher quality tourism and visitors with deeper pockets who aren’t so sensitive to prices. Large hotel companies were the first to decide on taking this step, but more are now doing the same. With Michelin stars, which ten Croatian restaurants are currently adorned with, the catering scene is also undergoing a serious transformation nationwide.
Does Croatia’s future lie with premium tourism?
Transition to the so-called premium tourism, as it turned out this summer, is also a way out of a kind of comfort zone in which domestic tourism has swayed for years now. However, even that has its price, market repositioning can hardly happen comfortably and painlessly, and the shock surrounding Croatian tourism price hikes that we’ve witnessed this year is proof of that.
It’s very important to point out that the shock and displeasure occurred despite inflation and price increases spanning the entire continent. European guests expected that summers spent in Croatia would be somewhat more expensive than they were a year ago, and yet the shock still strongly prevailed.
Many visitors announced that Croatia wouldn’t see them or their hard earned cash next year, and it soon became a legitimate question among the tourism workers themselves: Could this year’s prices come back to bite those who were fuelled by greed like a boomerang? Maybe.
Croatian tourism is experiencing a transformation – and some of it is forced
It will take a few years to unfold, but, like hotels when they go from three to high four or five stars, Croatian tourism as a whole is changing its market position and as such – its guests. It’s a process, but every year a new market match is played, each individual season is agreed anew, plans are tailored in accordance with current circumstances and current demand. Since some people got burned badly this year with price hikes, it’s to be expected that those setting the prices will be a little more careful next year – as such moves cannot continue being made indefinitely.