Reducing Prices of Wine and Water

The Management Board of the National Association of Family and Small Hotels decided today that family and small hotels will reduce prices on Croatian wines and water.

By the decision of the Management Board of the National Association of Family and Small Hotels, it has been determined that all its members will reduce prices on all Croatian wines and waters in their offerings by 10 percent starting from the beginning of 2013, which is a response and our support to the decision of the Government of the Republic of Croatia to reduce VAT on food and beverages in the tourism sector to 10 percent, effective January 1, 2013. -I believe that this decision will also open further considerations on how to set prices for stronger competitiveness in the market- said Šime Klarić, president of the National Association of OMH at its regular Assembly held on Monday and Tuesday at the Korana-Srakovčić hotel in Karlovac. 

Surprised by this announcement, the Minister of Tourism Veljko Ostojić, who briefly participated in the round table of the NU OMH, welcomed the announcement and the concrete reaction of small hoteliers, comparing it to a similar response that hoteliers in Germany, France, and Sweden had to the VAT reduction, which resulted in a general price decrease, increased investments, and employment in the hotel sector. 

Touching on competitiveness and investments, Minister Ostojić also announced very concrete measures already agreed upon with the Ministry of Entrepreneurship and Crafts and HBOR, among which the project titled ‘A Thousand Pools for Croatia’ sounds very ambitious.
– This is a program aimed at enriching the basic offer, but also with the goal of extending the tourist season, through which we intend to co-finance the construction of pools in hotels non-repayably by the end of our term. In parallel, we are working with colleagues from the Ministry of Construction on amendments to regulations for facilities that do not require a building permit, and I believe that by spring we will achieve that pools with an area of up to 50 square meters will not require a building permit. This may not seem like a big step, but based on our information obtained from the most significant tour operators working in Croatia, the season in identical or very similar hotel facilities in the same locations that have a pool extends on average by eight weeks, said Minister Ostojić. 

In addition to financial-credit programs, Ostojić also mentioned measures to enhance the competitiveness of the Croatian tourism sector, including interventions aimed at optimizing the legislative framework, which relates to amendments to the Hospitality Act, the Tourism Services Act, the Tourist Boards Act, and the particularly important Tourism Land Act for the overall investment cycle.
Speaking about improving communication between the hotel sector and the market, Ostojić mentioned sub-projects in which, together with the Ministry of Entrepreneurship and Crafts, investments are made in the necessary education of all types of tourism personnel, with a special emphasis on destination management, for which 21.5 times more funds are planned than before.
Šime Klarić emphasized financial stability as one of the foundations for the survival and development of small hotels, and in that context welcomed the financial program that could indeed help many small hotels that need investments for capacity renewal and content enrichment. 

– Small family hotels have been without investment incentives for four years for successful operation and establishment of profitable year-round business. Now, in cooperation with HBOR, there is a new offer for very favorable financing, whereby the share of loans without VAT in the investment has increased from 75 to 85, and even up to 100 percent, instead of the previous maximum of 50 percent without VAT. The repayment period for the loan has been extended to 17 years with a four-year grace period, and the interest rate has been temporarily reduced to 1 to 3 percent, or five percent for those where exports are not predominant in the turnover. This financing is also available in kuna without a foreign currency clause, and I believe that such funds are acceptable. Financial stability creates quality, quality increases competitiveness and demand, and it closes that spiral of financial stability. Until now, that spiral has been upward, and we must not allow it to go in the opposite direction, said Šime Klarić.