Valamar CEO Reveals Where the Most Growth Potential Lies

The pre-season and post-season in Croatia are still in their infancy, and they are of great importance for a country where tourism is such a vital sector.

For years, Croatian tourism has recorded an increasing number of visitors, with around 1.8 million German tourists visiting Croatia in 2012. However, there is a need for investments in the tourism sector, for example, to improve the quality of the tourist offer and extend the high season. What specific actions should be taken? What challenges does Croatian tourism face?

We see the greatest room for growth precisely in the development of the pre-season and post-season. This is something that is still in its infancy in Croatia and is of great importance for a country where tourism is such a vital sector. At Valamar, we invest heavily in this segment. How to motivate a guest in Dubrovnik or Poreč outside the season while making it interesting and fun for them? This year, for the first time, our two hotels in these destinations, Valamar Lacroma Dubrovnik and Valamar Diamant, operated all year round, and this has proven to be successful. Guests have recognized the value of spending winter days in sunny Dubrovnik or beautiful Istria. Croatia also lacks destination management. Quality destination management in places like Dubrovnik, Poreč, or any other city in Croatia would have a strong impact on Croatian tourism in general, and thus on Valamar as well. I am convinced that a large number of Germans still do not know much about the fact that Dubrovnik, i.e., the former Republic of Dubrovnik, is the cradle of modern diplomacy, and when they do come to Dubrovnik, they cannot learn this there either because there is no quality destination management. The subsidies provided by the state and the Ministry of Tourism, which relate to cheaper flight connections from Dubrovnik to Zagreb and some European cities, including Frankfurt, are certainly commendable. This is crucial because if a guest cannot quickly and easily reach Dubrovnik, then they will not go there at all. We have invested a lot in raising the quality of our facilities, but also in the people who work in them. Germans are very demanding guests, and we are aware of that, and they make up a significant share of our guests. However, the fact is that in the hotel industry and tourism in general, people do half the job. You can have an excellent facility, but if you have not invested in top-notch service and motivated your people to provide the best treatment to guests, they will not be satisfied. Our goal is to provide unforgettable experiences, and this, in addition to the beautiful Croatian nature and our facilities, is provided by the people who work in tourism and interact with our guests daily. I hope that all these actions being taken in tourism will bring even more tourists to Croatia. Last season, there were almost 12 percent more German tourists in Croatia, making Germans the most frequent visitors, ahead of Slovenians and Austrians. This shows that we have managed to raise the level of quality in tourist services because we know that Germans, although traditional guests in Croatia, are very demanding.

Quality is the most important prerequisite for sustainable growth in the tourism sector. Does the education of professionals meet this requirement, and is the vocational training system adapted to the needs of the sector?

I can speak from my own experience, first and foremost. At Valamar, we always need people with specific knowledge that is sought in hospitality and tourism, such as quality management and operations experts for hotel and camping facilities, food and beverage experts at the quality control level. The educational system plays a significant role here, and I cannot say that it is fully adapted to market needs, and this is a challenge for the entire tourism sector in Croatia. I would like students in tourism programs at universities to have the opportunity to gain skills and practical experience alongside theory. Then we could say that well-prepared professionals are coming to us from universities. Experience is, of course, gained exclusively through work. Because of this fact, I proposed to our owners almost eight years ago to start an additional, proprietary training program for our employees, and I presented to them a project that is now called Valamar Academy. This was a significant investment. I gained the trust of the owners for such a move, without having a concrete simulation of results, but the results came very quickly. Our current hotel directors and senior management, as well as our department heads, have emerged from our academy. Today, when I look at my career at Valamar, I think it was the best decision I ever made.

From March 11 to 12, 2013, the German Minister of Economics, Dr. Philipp Rösler, will visit Croatia accompanied by a business delegation. How do you assess German-Croatian economic cooperation and the possibilities for German investments in Croatian tourism in relation to the importance of the German market for this sector?

Our two countries have traditionally been friendly and partners for many years. This has been evident in politics as well as in the economy. Germany has closely followed Croatia’s path to the European Union, and I believe that a strong friendship between the two nations lies behind this. A large number of tourists from Germany have been traveling to this country for decades, which is of great importance for Croatian tourism. Croatia is also a place where German companies invest, and I believe that this cooperation is good, but it can always be better because there is still much room for development in terms of improving Croatia’s investment climate, although we must acknowledge that this is improving day by day. If we compare German investments with Austrian ones and the mutual economic strength of the two countries, German companies still have a lot of room for investment in Croatia. Austria is the leading investor in the Croatian market with a 24.6 percent share of total investments, while the German share is around 12 percent, which is therefore half as much. German tourists account for 24.3 percent of all tourists in Croatia and are the most frequent guests in Croatia, so I hope that this figure will also approach the area of economic cooperation. Minister Rösler’s visit to Croatia is important and a very good sign regarding the economic cooperation between the two countries. Croatia’s entry into the EU will certainly have a positive effect on German investors, and tourism is a very important economic sector in Croatia that significantly contributes to GDP, and as such, I believe it is interesting to German investors in the tourism sector, as well as to citizens who have not yet been to the Adriatic as tourists. Thanks to the German-Croatian Chamber of Industry and Commerce, we have regular gatherings of entrepreneurs and help Croatian and German companies in mutual cooperation. The people in the management of the chamber are both Germans and Croats, and here we also see synergy and cooperation in representing various sectors and industries present in Croatia. The fact is that Croatia is a small country, and precisely because of that, this type of networking that our chamber provides is of great importance and very useful.

Almost three months ago, during the opening of the German-Croatian lecture on Energy Efficiency in Buildings and Public Lighting, State Secretary Stefan Kapferer explained that Croatia’s accession to the European Union is a great opportunity for both countries, although the implementation of strict EU regulations poses a significant challenge for Croatia. What changes do you expect in your industry with Croatia’s upcoming EU accession?

Croatia has already had to implement most of the laws and regulations required by the European Union during the negotiation and accession process, the so-called adjustment process. Of course, there will be certain changes in the legal framework and regulations that will come into force upon Croatia’s entry into the EU, but I believe that the citizens of Croatia are ready for this. They have been preparing for this for years. Thus, we in the tourism sector are following this process and are aware that it will also affect our business, I believe in a positive sense. First of all, with the years to come and the introduction of the Schengen regime, guests traveling to Croatia will reach their destination much faster because they will not have to, as they do today, wait for hours at the border crossing to enter the country during the peak season. In the long term, monetary unity in the form of introducing the euro as a common European currency will facilitate business in our facilities because we will be returning money to most of our guests who come from the EU in their, or rather our common currency. Payments from the EU will be simpler, and there is, of course, the legal framework and consumer protection, which is already at the highest level at Valamar, but formally, guests will receive a sense of security that they may not have always considered they had before.

At the beginning of March, the leading global tourism fair, ITB Berlin, will be held. What are the advantages of Croatian companies in the tourism sector when participating in such a fair, and do you think that the marketing efforts of the Croatian government to strengthen the tourism sector are sufficient?
This year’s ITB will certainly be interesting for Croatia as a destination. The country’s recognition is increasing, and there is also the presentation of Croatia as a new member of the EU family. At Valamar, we always attend ITB and consider it the most significant fair in our industry. There we meet our partners and clients, negotiate business, and present our tourist offer. There are also media representatives who are always interested in Croatia, which is of great importance to us. Regarding the marketing efforts of the Ministry of Tourism and the Croatian Tourist Board, I believe they will strive to do everything to present Croatia in the best light. Segmentation is a key aspect in marketing, which has not been done so far, but as presented in the recently published Croatian Tourism Strategy until 2020, targeting specific groups in a marketing sense will be the next steps in promoting Croatia and its destinations. I welcome this and consider it extremely important for the promotion of the country and its destinations.