August 1, 2020 – During June and July, Valamar gradually opened 21 hotels and resorts and all 15 campsites in eight Adriatic destinations, which currently house more than 30,000 guests.
HRTurizam reports that in the first six months of this year, Valamar generated total revenues of HRK 134 million, or 81% less than in the same period last year, as a result of the closure of tourist facilities from March to the end of May and significant disruptions to tourist flows caused by the global pandemic that continued to negatively affect business volumes in June as well.
However, in the first half of this year, Valamar actively managed the crisis and launched action plans to stabilize the business in time, Valamar Riviera points out, adding that the business was successfully “paused” on March 15, all jobs were preserved, and they were ready to welcome the season-opening in June.
“The necessary liquidity is provided until 2021 through plans for operational savings, investment savings, deferred payments and agreements with investors. Operating costs were reduced by 61% compared to the same period last year, and the measures of the Government of the Republic of Croatia helped to preserve all jobs during the closure of facilities. Despite the crisis, Valamar Riviera confirmed the status of the best employer in tourism this year as well and took a high 6th place on the list of the best employers in Croatia,” the company emphasized.
As of April 1, with the support of the social partners, they implemented the Pause, Restart program, under which all employees who do not work are provided with a salary compensation for waiting for a job in the amount of at least 60% of their regular salary, but not less than HRK 4,250 net.
From March to June, over 90% of Valamar’s employees were on Pause, for which the costs were jointly borne by the shareholders and the state, which subsidizes the compensation for waiting for a job. After the successful opening of most facilities and the start of the season, today, Valamar has more than 4,000 employees, while 1% of employees are still on Pause. They will continue the Pause, Restart program during the autumn and winter in order to preserve jobs until the spring of 2021 when business normalization is expected.
In addition to preserving jobs, the company’s priority was to ensure sufficient liquidity to amortize the crisis and continue development in 2021. “In March, the decision on the payment of dividends for 2019 was revoked, the members of the Supervisory Board waived their fees, and the management’s salary was reduced by up to 30%. Also, policies and mechanisms of agreed payment deferral for 6 to 12 months to other stakeholders, including sales partners, suppliers, contractors, banks and others, have been introduced, with the aim of a balanced approach to crisis management and achieving business sustainability in times of crisis. In agreement with the banks, Valamar has postponed the repayment of loans in 2020, and the finalization of a new medium-term liquidity plan is expected these days. Achieved financial stability and ownership-operational management model will enable full business start-up and continued development in 2021.”
The initially planned investment cycle for 2020 amounted to over HRK 800 million, but was reduced by HRK 125 million by the end of June.
Valamar also temporarily slowed down the construction of the Pinea Collection Resort in Porec, the largest single investment in Croatian tourism worth a total of HRK 790 million, and postponed the completion of this investment. “The investment in raising the quality and capacity of the Valamar Parentino Hotel in Porec has been successfully realized, and the new family hotel received its first guests in the second half of July. The Supervisory Board of Imperial Riviera has given its prior consent for the continuation of investments in 2021 in the amount of HRK 36 million, which will complete the previous investments in Valamar Meteor hotels in Makarska and Valamar Parentino hotel in Porec in the fall,” they added.
During June and July, Valamar gradually opened 21 hotels and resorts and all 15 campsites in eight Adriatic destinations, which currently house more than 30,000 guests.
“Croatia has a unique opportunity, given the high level of security, geographical and political position in Europe, to impose itself as the most desirable destination in the Mediterranean and achieve strong growth already in 2021. It is, therefore, necessary to preserve jobs in tourism and support business systems that have the ability and responsibility to start a business quickly. With the support of all stakeholders, Valamar actively managed the crisis, launched the 2020 tourist season, and ensured a quality position for a successful return to the development phase of business during 2021,” concludes Valamar.