Croatia’s Tourism Suffering, How Are Things For Our Competition?

Lauren Simmonds

We’ve talked a lot about how the tourism situation in Croatia this tourist season has been a little off. Very much off, actually. While some report no particular changes, highly popular restaurants in Dubrovnik are being pictured just half full, Jadrolinija ferries are being pictured half empty, bookings are down significantly, and Croatia has quite strangely restricted access to tourism figures. Weird, right?

There are a multitude of reasons why Croatia’s 2019 tourist season is a drag, but one of the reasons Croatia needs to get its act together in regard to bringing tourists in and stop relying on old (and accidental) glory is the fact that some of its competition countries in the Mediterranean are recovering, and their prices are usually far, far more attractive than Croatian ones.

As Marija Crnjak/Poslovni Dnevnik writes on the 17th of July, 2019, the European Commission for Travel (ETC) expects that the demand for tourism in Europe will remain with an upward trend in 2019, with growth of 3.6 percent.

It isn’t only Croatia that has recorded minuses or stagnation this summer, owing to competition countries who returned to the ”tourism game” in 2019, primarily Turkey, which, with its very low prices, has pulled many tourists away from the likes of Montenegro, Greece, and even from Europe’s tourism king – Spain.

Although the European Commission for Travel does continue to provide optimistic forecasts for destinations in Europe in its report for the second quarter, the current situation is causing many to fear the decline in tourist traffic and tourism revenues this year.

The European Commission for Travel’s report (ETC) for the second quarter cites expectations that tourism in Europe will remain upward in 2019. A growth rate of 3.6 percent is projected, which is more in line with the annual average from 2008 up until 2018, but is in fact less than last year’s growth.

The report states that in the first two quarters of 2019, the Balkan region was the most successful in terms of growth in arrivals, with Montenegro as the record holder with a massive fifty percent increase in the period from January to the end of April, while Turkey experienced such growth at a mere twelve percent. Both Slovenia and Greece recorded significant growth in the first quarter of 2019, both with eight percent growth, and the EC has given a positive forecast for Greece, despite the return of Mediterranean rivals like Turkey.

As is well known, Croatia had six percent more arrivals and three percent more overnight stays in the first six months of this year than it did during the first half of 2018, but for the first time in a few years, there was a significant slump in July.

Namely, in the first twelve days of July 2019, the number of Croatian overnight stays fell by almost five percent, while tourist arrivals dropped by 6.2 percent, according to eVisitor data. The year, however, is still in the surplus, but for the time being, the encouraging percentage figures are drawn entirely from Croatia’s successful pre-season, which of course also yields significantly lower tourism revenues than the summer months do.

Optimism hasn’t managed to touch on the announcements of Croatia’s hoteliers either, a segment in which reservations have dropped during summer so far, and were in the range of three to seven percent in mid-June. On certain portals which have group deals, there are several offers for leading Adriatic hotels and destinations for the end of July, which have been overcrowded over the past three years. Worrying indeed.

Although official figures suggest that the tourist season in neighbouring Montenegro remains at last year’s level, those ”from the field” in Montenegro have warned that the situation is much worse than last year, and that there is a fear that, if this trend continues along with possible unfavourable weather conditions, the season in the popular coastal town of Budva could experience collapse.

The Montenegrin Tourism Association’s Petar Ivković, has stated that online sales figures in Montenegro indicate almost forty percent less individual reservations, and that reservations have been booked on the markets of Turkey, Greece, and Egypt.

Ivković agrees that Croatian and Montenegrin tourism are facing a very similar problem – the overgrowth of private accommodation facilities, and has added that only through water consumption and garbage collection calculations in Budva can they mathematically come to the conclusion that Mongenegro’s private accommodation is half empty.

Even Greece is experiencing a growing problem of unfair competition in private accommodation, and more and more Greek hoteliers are now expecting a fall in revenue, occupancy, and so prices will have to be lowered in order to fill hotel capacities this summer.

The new Greek government will continue with the tourism policy created by the previous government, and thus facilitate the sector through tax breaks. The new Greek Minister of Tourism of Harry Theocharis has his priorities in order, the first of which is the reduction of the VAT rate from the current 24 percent down to 13 percent for accommodation (with the goal of reaching 11 percent). In addition to the tax breaks, the ministry’s agenda is to review resident tax and introduce incentives for the energy renewal of Greek tourist facilities.

The aforementioned Greek ministry will also address the revision of the structure and activities of the Greek National Tourism Organisation (GNTO). They are also planning to partner with the private sector to promote and improve the country’s brand, and organise the promotion of alternative tourism.

Even the Spanish Tourism Excellence Association (EXCELTUR) confirmed that this summer there has been a slowdown in Spanish tourist traffic, which is currently at 2018’s level, with a moderate increase in revenue.

EXCELTUR expects growth of 1.6 percent this summer, down slightly from 2 percent last year. However, in the second quarter of 2019, Spain recorded a decline in tourist traffic in destinations selling just sunshine and sea, unlike Spanish city destinations.

The largest minus have been seen in the traditional beach destinations in Spain, which are more dependent on the demand of foreign tour operators, especially on the Canary islands and in the Balearic islands. Barcelona, ​​Madrid and Valencia have the best forecasts for the rest of the summer. In addition, as vice president of the association José Luis Zoreda explained, the results vary considerably between those destinations and hotels that invested in reconstruction and renovation of their facilities, and those who didn’t invest.

Spanish entrepreneurs in tourism are still optimistic according to surveys, and as many as 40.7 percent believe they will increase their sales when compared to last summer. Obviously, Turkey is an absolute hit this year, and in the first five months of the year, it had 11 percent higher turnover than it did last year, with growth expectations of 10 percent year-on-year.

Can Croatia adjust itself accordingly to repair its tourism situation? Only time (and an actual strategy outside of obsessing over eVisitor’s figures) will tell.

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