May the 30th, 2025 – More and more investments in the country’s hotel capacities are occurring. Investments being poured into Croatian hotels are paying off – and very generously.
As Katarina Kusec/Poslovni Dnevnik writes, the right time to talk about tourism and improvements that can be made is at the dawn of the main summer season itself. The Croatian Tourism Association recently chose to present the economic effects of investments in Croatian hotels and campsites and propose measures to encourage them further. For this purpose, research was carried out on a sample of 20 investments in Croatian hotels and campsites by six domestic companies. They carried a massive total value of 570 million euros and were realised in the period from 2016 to 2025.
investments in croatian hotels have huge direct and indirect benefits
What can be read from the analysis is that these investments in Croatian created very clear new added value in just eight years, equal to the investment itself. In 12 years, they’ll pay the state the full value of the investment through fiscal and parafiscal contributions and taxes alone. Investments in higher-class Croatian hotels and campsites all kinds of economic benefits. If we were to talk about specific figures, after the investment itself, direct and indirect tourism revenues increased by 319.75 million euros on an annual basis. That directly enabled the employment of approximately 1,500 people.
The study concluded that for every million euros invested in accommodation capacities in Croatian hotels and campsites, an annual increase in tourism revenues of 560.6 thousand euros can be expected. It’s important to note that revenues outside of the complexes themselves, i.e. from spending at the destination itself, are also on the up. Investments are therefore not something to be avoided, but rather actively encouraged.
As a country that heavily leans on tourism, Croatia has a number of measures to encourage tourism and investment at its disposal. Are they enough, however? Hotel accommodation across Croatia accounts for only 9.5 percent of its total accommodation capacities. That is very many times less than across the Mediterranean in competitive countries. In order to improve the system, an analysis of the competition of other countries, some of which were Mediterranean, was also conducted. The analysis conducted by Horwath HTL included Austria, Montenegro, Malta, Italy, Greece, Serbia, Albania, Hungary and Portugal.
croatia needs more targeted programmes for investments in hotel capacities
“Austria has a tourism bank that provides favourable loans for the development of the hotel industry. They periodically alter those conditions and target those who will receive the loans and under what conditions. They obviously understood that without such an institution, there can be no quality progress. Hungary even has a special development programme for tourism, which is their main instrument for developing tourism infrastructure, especially in the accommodation sector,” explained Veljko Ostojić, director of the Croatian Tourism Association.
What’s also very evident from the work of these other countries is the trend of gradually strengthening the strategic role of the state in shaping tourism investments. The focus is no longer solely on financial support, but also on managing the direction, structure and effects of these investments. In addition to that, most of these countries use a combination of subsidised loans, grants and tax breaks, all with the aim of reducing investment risks and the cost of capital. There’s also a shift towards thematic incentives, particularly in the areas of energy efficiency, digital transition and social responsibility. It’s also worth noting that almost all of the analysed countries base their respective tourism development strategies on encouraging investment in higher-category accommodation capacities.
a more logical approach is needed
“Without concrete activities and measures, the desired change in Croatia’s current accommodation capacities will not happen, or it will occur much too slowly. There’s been a lot of talk about high prices, and at the same time, on August the 15th last year, Croatia’s five-star hotels were almost fully booked, and campsites were at 100 percent. Four-star hotels were 93 percent full. We can therefore conclude that prices are not such a problem, and the market does appear to accept them.
High-category facilities filled during the peak of the summer season prove that the prices are acceptable to those to whom this offer is addressed. We must therefore continue to invest and develop, but only where there is a logic of creating greater added value,” believes Ostojić. He then presented specific instruments with which Croatia can encourage investments in hotel accommodation, as well as in the transformation of existing private accommodation into hotel accommodation with higher added value.
grants, grants, and more grants…
The proposed measures include grants for the construction and expansion of accommodation facilities in undeveloped (in the sense of tourism) areas with a high intensity of support. They should also be aimed at hotels and campsites with four and five stars.
Then comes the idea of grants for the construction and development of hotel facilities in more tourism developed areas with a lower intensity of support. That implies subsidised interest rates for the construction and development of hotels and so-called mixed-use capacity complexes with medium and higher support intensity. Grants for raising the hotel category higher, and grants for the development of diffuse and integral hotels, intended for the transformation of existing private accommodation into hotel capacities.
Following on from that we arrive at the idea of grants for investments in sustainability and ESG components in tourism, investments in energy efficiency, renewable sources, digitisation and socially responsible models. There is also the proposal of investment incentives for the development of hotel facilities and encouragement and precise regulation. These also involve so-called “mixed-use projects” that deal with the renovation of some of the units with money from private investors.
“By adopting such practices which are generally standard in competing countries, Croatia would attract significant investments in quality hotel accommodation that would increase tourist spending, extend the season and reduce excessive tourism during the summer’s peak. Countries across the region use a number of instruments to encourage investment in hotel accommodation that we don’t even have in Croatia. We need to increase the country’s number of hotel beds to maintain and increase competitiveness compared to other countries,” concluded Ostojić.
