Small and Family Hotels in Croatia Expect a Better 2010

Small and family hotels, members of the National Association of Family and Small Hotels (OMH), expect that next year will be better with an increase in the number of guests in their establishments and financially, according to the assessment of OMH President Šime Klarić.

Small hotels need to focus next year on maintaining quality and liquidity, says Klarić, emphasizing that it is also necessary to see what opportunities exist for encouraging new investments, including state subsidies for loans for the construction of small hotels through the Ministry of Tourism’s program "Incentive for Success." The expected improvement in business next year, he says, is based on significant investments in marketing and communication with markets, as well as announcements from international fairs and contacts with specialized agencies from abroad that indicate a slight optimism for next year in almost all markets. Therefore, he believes that small hotels will be able to return prices ‘to the old’ next year, as they have significantly lowered them this year due to ‘crisis’ market adjustments, which should improve the financial effect compared to this year.

Given the stagnation of investments in this segment and this year’s lack of (new) state subsidies under the "Incentive for Success" program, Klarić notes that small and family hotels are mostly new and well-maintained, so they do not seek renovation and similar investments, but any encouragement for the development of offerings and content is still welcome. He emphasizes that he certainly expects the continuation of the "Incentive for Success" program when ‘the time allows,’ which has so far been very useful and well-received and based on which, along with state subsidies for loan interest, the largest number of small and family hotels has emerged in the last six years. Further development of this segment is inevitable, says Klarić, adding that there are currently about 300 small and family hotels in Croatia, and in the next five years, there could be twice as many if there are incentives.

If there are no incentives, this process will proceed more slowly, especially in areas of relatively underdeveloped tourism, in the hinterland, inland, and on the islands. According to data from the Ministry of Tourism, as part of the incentive program for small hotel management "Incentive for Success," from the beginning of implementation at the end of 2002 until March of this year, 476 loans have been issued in a total amount of nearly two billion kuna. These loans, which were approved by HBOR with the recommendation of the Ministry and included 24 commercial banks in the program, have led to the construction or reconstruction of 357 small hotels, guesthouses, and aparthotels, as well as 119 facilities where there are apartments, rooms, holiday homes, or campsites. As part of the heritage protection subprogram "Under Centuries-Old Roofs," 107 old houses for accommodation have also been renovated. Geographically, 155 projects/loans were approved in the continental part, while 321 were approved for the coast and islands, and a total of 3,700 new jobs have been created in all facilities. Since March of this year, as unofficially reported, no new loan applications for this purpose have been received or approved, as the three-year Government program for financing small family entrepreneurship in tourism "Incentives for Success" was still in effect until then. (H)