Home / Business and Politics / Due to an unexpectedly good season in the HoReCa channel, chaos has ensued

Due to an unexpectedly good season in the HoReCa channel, chaos has ensued

We took a gamble and it paid off. Despite the fact that Croatia has been classified as one of the safest countries in the Mediterranean since the beginning of the coronavirus pandemic, no one expected that tourism on the coast would explode in the last three weeks. Excluding southern Dalmatia, which is suffering due to a lack of air guests, tourism in other parts of the Adriatic seems as if it has never encountered the corona. In May, official estimates suggested that we would be happy if we achieved 30 percent of last year’s results, and we are currently at about 70 percent.

Two and a half months ago, hoteliers were shyly opening one property after another, and the HoReCa channel supplying hotels, restaurants, and cafes was on its knees. In July, things changed overnight, and hoteliers and suppliers were caught off guard, leading to chaos in the supply chain by mid-July. Only now has HoReCa returned to ‘the old normal.’ According to hoteliers, the unpreparedness of traders was felt. They did not have enough goods, sufficient numbers of people and vehicles, so delivery standards in July were lower than usual.

– Everything happened at the last minute, no one could expect such a sudden increase, and it was necessary to mobilize people and vehicles overnight. We literally cried because we could not get fresh fruits and vegetables, and we also ran out of drinks – says Goran Fabris, CEO of Jadran Crikvenica.

Given all the uncertainties that characterized this year, suppliers were unwilling to keep goods in stock, which the tourism sector realistically could not expect. Everyone was focused on daily needs and planning. On the other hand, hoteliers could not provide suppliers with detailed plans because they themselves did not know them; guest traffic forecasts were made at most two weeks in advance. When demand outstripped supply, certain suppliers took advantage of this and raised prices. Some did not do this, but in any case, no one lowered them. Currently, no one is asking about prices because the rule is ‘just give,’ everyone needs everything.

In May, the number of classic (non-hotel) restaurants open at the national level was 50 percent, and now only about 10 percent are not operating. Week by week, the situation in restaurants is getting better.

– Since the beginning of July, the weekly traffic growth in restaurants is between 20 and 25 percent, and the best performances, at last year’s levels, are achieved by Istria and Kvarner. Dubrovnik is doing the worst, still at only 25 percent of last year’s traffic, followed by Split – says Marin Medak, president of the National Association of Caterers. The supply of restaurants in Croatia was not problematic in July because, as Medak says, most products in restaurants are imported anyway.

There are no exact data on how much domestic production ends up in the HoReCa channel. Likewise, there are no accurate data on the share of domestic food in tourism, but according to some estimates, about 15 percent of domestic agricultural products are consumed in tourism, while the rest goes to domestic consumption and export. According to some estimates, the share of imports in tourist consumption exceeds 50 percent, with some types of products reaching up to 80 percent.

Domestic producers for whom HoReCa constitutes a significant share of revenue are currently achieving somewhat better results; however, this year they will not be saved as much by tourism as by classic retail, which has also exceeded all expectations.

Everyone is actually wondering what the reasons are for Croatia currently achieving the best tourism results in the Mediterranean, besides the fact that it is the only one with tourism and accepts tourists from markets that (like Americans) no one else will. If you ask tourism workers, government measures have actually saved the season. In the first wave, they were excellently targeted, the sector received funds to maintain cold operations, so hoteliers did not have to fear occupancy as much. Entrepreneurs in tourism were ready and ‘tense as bows,’ they could retain workers and be ready to open.

Everyone in tourism and the sectors that supply it is anxiously waiting for when and how this crazy year will end and what the situation will look like when the line is drawn. As is the Croatian government, which, due to the good performance of tourism, will most likely have to revise some figures, perhaps do a budget rebalancing and new GDP movement estimates.

You can read the entire analysis of the current situation in the HoReCa channel in the new issue of the printed or digital Lider.

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