We can’t expect vast improvement without allowing private investments in state owned thermal spas
HTI Health Tourism Industry Conference which was held in Split, Croatia on October 23 2015, was a great opportunity to finally put this tourism branch in the spotlight. Even though everyone in the industry has been talking about its vast potential and its important role in bridging the ever problematic seasonality of Croatian tourism, very little has been done over the last decade to speed up its development.
During the conference I was able to speak to Leila Krešić Jurić, Director of the tourism sector within the Croatian Chamber of Economy, Joško Stella Director of the Split Dalmatia County Tourist Board and Ivo Bašić, adviser to the Minister of Tourism Darko Lorencin and ask them why we are still light years behind in developing and promoting health tourism in comparison to our neighbours in Slovenia or health tourism giants such as France, Switzerland and Austria.
So, what is the current state of health tourism in Croatia, I asked Leila Krešić Jurić, Diector of the Tourism Sector, Croatian Chamber of Commerce
“We are very aware health tourism is a niche that can not only provide additional value and a push to our tourism but it is one of the key factors in prevailing our seasonality problem, since at the moment almost 2/3 of ll overnight stays are still achieved in July and August. Health tourism currently makes up for 2-4% of our overnight stays and arrivals, and that is if we take into account wellness hotels. What is important is the great potential that we have in this particular area, since there is no other special form of tourism that can absorb such a large number of potential new arrivals of very high quality guests with high spending power. This is one of the reasons why health tourism was included in the Tourism Development Strategy as one of 3 key development areas”.
Why is it developing so slowly, despite the fact that we have developed not one, but two Action plans for the development of health tourism (in 2011 and new one in 2015)?
There are many answers to that question but I’ll try to sum it up. Main development factors for health tourism anywhere in the world are various types of thermal springs and thalasotherapy. In Croatia, most of those springs are owned and run by the State or Counties and their investment cycles are very “mild”. All these health spas that have great resources such as thermal springs and other similar natural springs, for instance Naftalan which is a unique spring not only in this region but in the whole world (only Azerbaijan has something similar), they do manage to invest in their services, but only as much as their revenue allows. They cannot use EU funds to really expand and elevate their service to a world class level because EU funds are reserved for small and medium businesses only. We have to enable easier investments because now we have a situation where one of our specialty hospitals is renovating just one floor, creating 20 new and improved rooms to offer higher level of service, but that’s not even nearly close enough since they need to completely refurbish their entire objects in order to be able to offer desired services and of course to charge prices that would keep them afloat. We have to stress that the medical services in Croatia have evolved and improved drastically over tha last 15 years, we have a whole string of private clinics that have invested large sums of money and that have invested in attracting the best staff available. But what we are missing, along with investments, is the certification for certain services so that we are able to properly advertise and market this product.
In your keynote during this forum, you mentioned that almost 300 mil euro of investments in health tourism is on hold. What kind of investments are we talking about and where will those objects be located, along the coast or in continental regions?
For several year now we’ve been surveying the members of our Health Tourism Association (all spa and thermal clinics in the country), both private and of course all of the state owned ones and we have a concrete list of project that are ready to be built. So, if someone told them that they have the option of applying for EU funds or acquiring for low interest rate loans they would literally be able to start building tomorrow because they have very detailed plans and finished feasibility studies. These planned projects are already totaling to 300 million euros and they include 15 specialised treatment centres across the whole country.
Many potential foreign investors were interested in developing health tourism projects, but apart from the project in Nerežišće which has gone along the furthest, most of these investors have given up over the years because the administrative barriers on the local level proved to be very difficult to overcome. Is the situation any better now and what are they mentioning as the biggest obstacle for the realisation of their ideas and projects?
Obstacles are very similar to those they come across when they want to invest in anything else in this country. There are many factors, not just one, most of them happen on the local level but the state can intervene in some cases. What we were able to do as the Tourism Sector within the Croatian Chamber of Commerce, and I really have to commend the Ministry of Tourism for their help and their swift reaction, is to enable all specialty hospitals and health resorts to receive categorisation for their accommodation. We get dozens of enquiries each year from very potent markets such as Saudi Arabia for cooperation in health tourism in terms of rehabilitation, orthopedic treatments and various medical services, procedures and post-op stays, but when they ask us to recommend certain clinics and special hospitals, they always want to know which category they belong to. Until now, we always had a problem in this department because no matter who you end up recommending you were not able to state their category and this is where all talks would end. The Ministry has changed their existing legislation and clinics can now receive proper categorisation for their accommodation services. Of course this is not nearly enough to get us on the map, but it was one of the prerequisites.
Terme Tuhelj, winner of Best Health & Spa Centre in Croatia (Awarded today by the Croatian Chamber of Commerce)
Were there any talks with the Croatian Tourist Board and will health tourism finally be promoted and presented globally as a separate, specialised product?
Yes, I am very happy to say that we have the full support of HTZ and director Ivičić and we will start promoting this particular niche separately. Two of our HTZ representatives from London and Paris flew in to Split today to participate in this forum and to familiarise themselves with the products and I think that this is an indicator of their serious and visible support to health tourism.
Now Back to Dalmatia…
Since this conference was held in Split, it is only natural to ask Joško Stella, director of the county Tourist Board where are Split and Dalmatia positioned when it comes to health tourism
We are certainly not where we should be and where we deserve to be, we have to be honest. We have the potential but we are missing capacities, we are lacking any kind of organisation in health tourism so I have to say that we are strongly working on it and we will continue working on it. Our biggest object is the specialty hospital Biokovka and one even larger one is currently being developed in Nerežišće on island Brač. We have a lot of private clinics across the county, especially dentists that are already attracting foreign clients, but the sector itself is far from organised. We tried to get them together several times. There are so many different associations in the county but as a county tourist board we want to have one comprehensive database of all subjects in health tourism so that we can promote them. The county as an institution is there to help the investors by developing master plans and documentation as it was the case on island Brač. We need new objects and we need existing hotels to expand their offer to health and spa since the trends are showing this is the fastest growing tourism segment in the world especially in pre and post season.
You mentioned the problem of getting all subjects organised, in other words, in our county there is no Health tourism cluster as there is in other counties, especially Kvarner. Their cluster is actually quite successful and they are promoting their services with joint actions. What is it about our county and clusters, not just in health tourism, but in all industries? Even our shipbuilding cluster can’t seem to work together? Are they unaware of how much clusterisation can help them achieve the common goal and ease marketing activities or is everyone expecting the tourist board to do this for them?
We are doing it for them, or at least we are trying to. But you have so many different associations and groups within the same industry and they are just not cooperating and helping each other. As you said, we have the same problem with other industries, not only tourism, so I guess you’re right, there’s a general lack of knowledge of what clusterisation can bring. It’s not about one association getting more attention than the other. As a tourist board, we are more than willing to help them but they obviously want to do things their own way. We are only interested offering the complete and accurate list of objects and services within the county and we will publish this directory by ourselves since they were unable to gather together and do it for their own benefit.
Two cents from the Ministry of Tourism
And, last but not least, I managed to sit down with Ivo Bašić, adviser to our Tourism Minister Darko Lorencin. Since this is not his first mandate, and he’s worked with several tourism ministers over the years, at least we can hope he will stay on to implement some of the things everyone talked about today.
We have been talking about the importance of heath tourism for decades, and yet it has only been introduced as a separate tourism product in the last Tourism Development Strategy. What are the main goals for Health tourism?
Even though health tourism is the fastest growing tourism segment in the world, yes, it was only included in the last Development Strategy and it was listed as one of the 10 tourism products that will be in our focus until 2020. One of the 26 measures listed in that document was the development of a proper Health tourism action plan which was concluded and presented this year.
Some of the main goals of this strategic document are to determine what it is that we want out of our health tourism, we have to stop dabbling and doing odds and ends in this niche, all those involved in health tourism have to focus only on this segment, another goal is to determine exact prerequisites to achieve that much needed step forward, of course we need to de-regulate some of our laws and regulations and most of all, we need to know what the market is looking for so that we can offer it.
Elections are around the corner, can this action plan be scrapped with the arrival of a new minister?
Development strategy was not only accepted by the government, it was accepted by the parliament as a binding, strategic document and the action plan is one of the measures of the Strategy. I am 100% certain this is a high quality document done with a full scientific approach. It was developed by the Tourism Institute in cooperation with the Ministry of Tourism, Ministry of Health and all other subjects involved in health tourism. I believe any future Minister will continue where we left off.
Did you perform an international survey during the development of this action plan to determine what the foreign markets are expecting of us as a health tourism destination? Of course, in terms of branding and positioning we have to start almost from scratch because in this particular tourism branch we are virtually unknown.
Yes, we have to start working on our positioning because we are not recognised as a destination offering these services. We are recognised mostly for our natural beauty, but we already have the most important prerequisite – thermal springs and spas. Private sector has done a lot to promote our services and they have invested a lot, especially when it comes to dental tourism which is extremely well developed. Large state owned clinics are in the state that they’re in, they require large investments otherwise they won’t be able to compete.
Is there room for any possible public-private partnership when it comes to state owned Health clinics? You said it yourself, they’re in dire need of investments and yet cannot raise the capital themselves through bank loans or EU funds.
I am sure they are thinking in that direction but for that to happen, we need to further liberalise and de-regulate current legislations that are currently making it very difficult if not impossible to enter into such partnerships which would be beneficial both for the state and for the investor in the end.
In conclusion, I can say I talked to all three sides – local level, state and private sector. And after today’s panels and discussions, we still know there’s ample potential and yet without serious clusterisation, greater involvement of the state in terms of changing laws and cutting down the red tape and of course less meddling by the local administration, we will have to wait for decades for this “potential” to turn into a serious tourism product.