In the largest hotel company in Croatia, Valamar Riviera, they are satisfied with the business results of the first quarter of this year, in which their sales revenue increased by 39 percent, to 39 million kuna, with approximately 106 thousand overnight stays and an average daily price of 360 kuna, or 27 percent higher than in 2017.
According to the quarterly financial report published by the company on the Zagreb Stock Exchange, a strong demand and active management of sales channels and prices resulted in a high 27 percent increase in the number of overnight stays (106 thousand in the first quarter of this year compared to just under 84 thousand last year) and the average daily price (360 kuna in 2018 compared to 284 kuna in 2017).
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Operating costs amounted to 129 million kuna, an increase of 11 percent compared to the first quarter of last year, which Valamar Riviera attributes to increased operational efficiency. The main reasons for the increase are found in the rise of material costs due to increased business volume and the rise in personnel costs, as stated in the report, noting that the increase in personnel costs was planned in accordance with the policy of raising employee salaries and new hiring necessary for quality service in new premium and upscale tourist products, which will open at the beginning of the second quarter of 2018.
“Considering the seasonal nature of the industry in which the Group operates, the business results in the first quarter are not indicative. Since sales revenue in the first quarter has a very small impact on total annual revenues (for example, the impact in 2017 was 2 percent), their 39 percent growth compared to the same period last year is not a basis for making annual expectations,” the report states.
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It is also noted that the first quarter carries a characteristic negative EBITDA (in the first quarter of this year, negative 88.7 million kuna) due to the volume of less significant seasonal operations.
Valamar also reported that they are finalizing investments worth more than 700 million kuna, which are seen as an important driver of growth and positive expectations for the upcoming season.
“Key investments this year include the completion of the Valamar Girandella Resort in Rabac, within which we recently opened the Valamar Girandella Maro Suites with five stars, the first hotel under the Kinderhotel brand in Valamar’s portfolio. There are also investments in repositioning the Dubrovnik hotel Valamar Argosy, the renovation of the Valamar Imperial hotel on Rab, and the continuation of investments in camps in Istria and on the island of Krk,” the company emphasizes.
They also highlight that this year they opened 600 new jobs and that in the 2018 season, from Istria and Kvarner to Dubrovnik, they will employ a total of around 6,600 employees, while for seasonal workers this year they plan accommodation in four of their own hotels, the so-called Valamar houses.
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“Work is proceeding according to plan, as are all final preparations for the season. We are recording further growth in demand and bookings, especially for higher quality accommodation, and we continue to invest in product development, the destinations in which we operate, and in improving salaries and working conditions, as an important part of the strategy for further growth,” said Valamar Riviera CEO Ċ½eljko Kukurin.
The company reminded that in partnership with AZ mandatory pension funds, they completed the process of purchasing 55.48 percent of the shares in Hotel Makarska at the beginning of April this year.
