Croatian Company Lemax on American and NZ Markets, Expansion Planned

Lauren Simmonds

As Poslovni Dnevnik/Lucija Spiljak writes on the 15th of September, 2020, the Croatian company Lemax, the largest Croatian exporter of tourism “know-how” specialising in tourism software, is celebrating 30 years of having been in operation, which is marked by new investments, growth in the number of employees and continued expansion of business outside Croatia.

The company was founded in the Dalmatian city of Sibenik, has a branch in Zagreb, and the latest news is that they are opening a new office in Osijek, where they already have five employees. More about the company’s novelties and plans was revealed in an interview between Poslovni Dnevnik and the Croatian company Lemax’s director Mate Kostovski.

According to the latest information, the opening of a new office is underway, which will be located in Osijek. When do you expect to move in and how many people will you employ?

We’ve been preparing to open an office in Osijek for some time now, and we already have five employees there, but we’re now completing the opening of a physical office, which was initially planned for May. The contract for renting the space has been signed, the works on arranging the space are in progress, and we expect the move-in to occur at the end of October.

The employees in Osijek currently work from home, as do some of our employees in the Zagreb office. The number of employees in the office in Osijek will increase in accordance with new projects and real needs, and we anticipate that in the next three years we’ll reach the number of 25 employees.

In February, the Croatian company Lemax announced that the number of employees would increase from 85 to 130.

Our company is constantly expanding and increasing in terms of the number of employees. Employment in Croatia was a bit slow during lockdown, but 11 new colleagues have joined us since June. Lemax currently has 100 employees, and the exact number by the end of the year will depend on the real needs that we’ll have to adapt to in regard to the situation in the tourism sector.

We’re always open to hiring quality people for software development, while by the end of this year and next year, we’ll be placing an emphasis on hiring in commercial roles, ie positions in sales and marketing departments. We expect that global tourism will begin to recover in the second quarter of next year, when we expect a positive trend and significant investment in technology, which will create the need for increased employment.

Two years ago, the Croatian company Lemax generated revenue of 1.85 million euros, an increase of 85 percent over the year before. What were the results like for 2019?

In 2019, which was the best year so far, we achieved significant revenue growth. It amounted to 2.54 million euros and grew by more than 40 percent. This year is also significant for us because we increased the number of employees to 85 and we achieved the preconditions for opening offices around the world.

And the first half of this year? What are the estimates for the rest of it?

Regardless of the coronavirus situation, which significantly affected the entire tourism sector, and thus IT in tourism, we managed to achieve growth in the first part of the year. We had a great first quarter, but unfortunately a drop in the second. But all in all, in the first half of the year we recorded revenue growth, and we expect it at the level of the entire 2020.

This year has been quite specific for everyone, including the tourism sector. The pandemic forced travel agencies to reduce costs, but also to optimise their business processes and think about how to get out of this crisis even stronger. So, as difficult as the situation in tourism is, the coronavirus pandemic has actually served as a catalyst for change that will lead to the removal of market-leading companies; many companies will cease to exist, and those who invest in digitalisation will emerge victorious from this crisis.

You’ve announced an investment cycle until 2023 with an investment of ten million euros in modern architecture. What exactly does such an investment involve?

The investment includes investing in new work processes, which will enable us to be more productive, and to be able to deliver new modules and product functionalities to the market faster and with better quality. In addition to new technology and architecture, the investment also refers to a complete change of the user interface, which will be modern and in line with the trends.

This year, our main focus is on our own processes and our infrastructure. Given the great growth we’ve had in the previous two years, we’ve started working intensively to improve internal processes to strengthen the foundations for further growth and become the world’s leading provider of software for travel agencies and tour operators by the year 2023.

You operate on a dozen markets, from the US to New Zealand, Malaysia and Italy. Two years ago, you signed your biggest contract with Thailand’s largest travel agency, Asian Trails, which supports more than 700 employees and more than 4,000 partners across eight markets as part of the deal. What are the results of the project?

The Asian Trails project was successfully delivered, and the client continued to invest further in the digitalisation of their own business. Despite the difficult situation in which they find themselves today, they recognised the current situation as a great opportunity, and they continued to make significant investments in digitalisation, so that they could be ready to welcome the return of tourists to Southeast Asia, which at this point in our conversation is, unfortunately, completely closed to tourist visits.

Has the need of the tourism sector for IT services been particularly highlighted this year?

This is a year in which travel companies have become more aware of the need for IT services than ever before. As travel companies are forced to lay off employees due to lack of income, at this moment more than ever before, they’re wondering if there is a more efficient way of doing business and are ready to consider advanced IT solutions to do the same job with fewer employees in the future.

As the trends in global tourism market is still negative, ie most countries around the world are still closed and it isn’t known when the borders will open again, companies are currently focusing mainly on maintaining cash flow, and less on investment.

But when countries start to open up and when the first influx of foreign travellers starts to be felt, we expect the trend to reverse and more and more companies to start investing in IT solutions because they already see that this is the only way to emerge victorious from this crisis.

The digitalisation of the Croatian economy has been talked about intensively for years. What is the degree of that digitalisation in your opinion?

More and more companies, but also the public sector, understand the need for digital business. The coronavirus pandemic has affected faster digitalisation, and with our solution, we’re enabling the process of digital business transformation. From the publicly available data, Croatia is boldly moving towards the path of digitalisation, we believe that it will find a good example for the end users of these services and that we’ll follow European and world standards. We certainly have the knowledge and the solutions.

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