Croatian Tourism Association Propose Measures to Save Tourism Sector

Daniela Rogulj

March 28, 2020 – The Croatian Tourism Association (HUT) has drafted measures that would help preserve employment and businesses in the tourism sector.

Dalmacija Danas reports:

“As tourist traffic is at a halt, with completely closed accommodation and catering facilities across the country, and growing uncertainty throughout the main tourist season, the largest domestic tourism companies assembled in the Croatian Tourism Association (HUT) have drafted measures that would help preserve employment and businesses in a sector that generates nearly 20 percent of Croatia’s total GDP.

Under these conditions, in the fight against the pandemic caused by the coronavirus, it is quite certain that a significant portion of tourism revenue will be missing this year. In such conditions, and because of the exceptional seasonality of Croatian tourism, which in four summer months generates 85 percent of total traffic, it is realistic to expect that the tourism sector will have business problems until spring 2021.

At HUT, we strongly support the Government’s primary goal expressed in the presentation of the first set of measures to assist the economy, which is to save jobs and businesses in these extreme conditions. We think this is necessary because only in this way can we make a quick return as soon as the health and market conditions are created.

The proposal for tourism measures is divided into four groups.

1. The first priority is to keep jobs until next spring. For this, we need formal and material assumptions, and we propose the urgent formalization of the ‘waiting workers’ institute, which realistically reflects the present position of the vast majority of hospitality workers. While on hold, workers should receive a minimum wage of 60% of their net wages, which is otherwise the unemployment benefit, and employers would not pay taxes and contributions since workers do not work. The measure should be secured by next spring when we expect the normalization of business to begin.

2. The second group of measures relates to the payment of taxes and contributions and various fees.

We propose that taxes and contributions and those fees and compulsory membership fees (communal, maritime property, tourist land, water fee…) are not paid until the catering facilities are operational. After work begins, in particular, with the opening of 50% of the available capacities, the mentioned fees are paid in the amount of 30-50% to enable the beneficiaries of these benefits “survive” and have the means exclusively for the necessary functioning. This payment system is valid until 01/05/2021.

That is, we are all aware that this year’s tourist turnover will be significantly reduced and it is entirely logical for employers to be exempt from paying such taxes. The delay in payment itself does not make sense, since it is already obvious that there will be no possibility of payment, but it is necessary to preserve employment and business systems until the full business is restarted.

3. The third group of measures relates to the financing of liquidity and the preparation of the next tourist season, therefore, we propose to provide grants and/or to provide favorable loans through HBOR and commercial banks for this purpose.

4. The fourth set of measures relates to reprogramming existing credit obligations for all entities that are necessary for business survival. We have also sent the measures to the Government and we expect them to be considered and adopted through the announced new economic assistance package, which is necessary for the survival of the overall economy.”

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