The share of tourism revenue in GDP in Croatia is convincingly the highest in the European Union

Croatia is more dependent on tourism revenue compared to its Mediterranean competitors. Thus, tourism revenues in 2018 and 2019 amounted to as much as 18.3 and 21 percent of GDP, before decreasing to 8.9 and 15.8 percent of GDP in 2020 and 2021 due to the negative effects of the pandemic on tourism demand. Even with such reduced tourism revenues in the two pandemic years, they were still, when expressed as a share of GDP, convincingly the highest in the European Union.

In 2019, tourism activity in Croatia directly generated 11.8 percent of the total GDP achieved. Additionally, the gross added value of tourism activities that year amounted to 82.8 billion kuna, which is 24.4 percent of the total gross added value achieved that year.

This was stated at a panel discussion held today on the occasion of the presentation of the second season of the Uplift project, featuring experts who pointed out the need for sustainable development, as well as the problems faced by tourism in Croatia in recent years.

The discussion was prompted by the first comprehensive study conducted by the Economic Institute in Zagreb titled 'Vulnerability of Local Government Units in the Republic of Croatia to Tourism Activity', which reveals interesting trends related to the exposure of the Croatian economy and local units to tourism activity. The authors of the study are Associate Professor Dr. Nebojša Stojčić and Dr. Maruška Vizek.

The study was conducted as part of Mastercard’s Uplift project, aimed at improving the business and development of micro, small, and medium-sized enterprises with a focus on tourism.

The share of private accommodation is increasing

The results of the study were presented at Wespa Spaces during a panel discussion featuring Maruška Vizek, Assistant Director at the Economic Institute in Zagreb, Maja Brkljačić, Business Development Manager at AlgebraLAB, Andreja Vukojević, Director of the Tourism Sector at the Croatian Chamber of Commerce, Gea Kariž, Marketing Director at Mastercard, and Slavko Štefičar, Director of the Office for Sustainable Development and Competitiveness of Tourist Destinations at the Ministry of Tourism and Sports. The moderator of the discussion was TV host and editor Zoran Šprajc.

The study analyzed data for the period from 2012 to 2021, and the results are available at the link. The data showed that the comparison of the seasonality index values in 2021 relative to 2012 suggests that local units in the Dalmatian hinterland, which have intensified their engagement in tourism over the past decade, are recording a shortening of the tourist season, while coastal and island units are experiencing a significant extension of the tourist season.

The reason for this is the intense growth in demand for Croatian tourism products, which is also increasing the concentration of demand in a large part of local units.

In this regard, the most vulnerable are Zadar, Split-Dalmatia, Dubrovnik-Neretva, Šibenik-Knin, and Istria counties. The study also showed that the share of private accommodation in total accommodation has increased in most local units, unlike accommodation in hotels, hostels, and camps, where it is decreasing.

Compared to 2012, the number of beds per capita has increased by 38.3 percent, which is the largest increase in accommodation capacity concentration among Mediterranean countries. At the same time, the number of tourist overnight stays increased by 38.2 percent from 2012 to 2019, reaching 7.05 million overnight stays in 2019.

– The good news is that, compared to competitors in the Mediterranean, Croatia is also experiencing significant growth in demand for its tourism product. However, if we analyze this increase in intensity by counties in more detail, we come to an interesting conclusion: the wave of interest in Croatia has shifted from the usual coastal destinations to the interior, to locations that have not been so engaged in tourism until now – such as units in the interior of Istria, the Dalmatian hinterland, Lika, and Gorski Kotar, and even in the continental part of the country – commented Maruška Vizek from the Economic Institute in Zagreb, adding that one of the biggest problems is the short tourist season that must primarily be extended. All panelists agreed with her.

Slavko Štefičar from the Ministry of Tourism and Sports stated that Croatia should not rely solely on sun and sea, but should introduce new tourism products. He commented that Croatia is for the first time in a situation where part of the public money is intended exclusively for tourism, amounting to approximately 2.2 billion kuna.

– We are aware of the challenges in the accommodation structure that is focused on private renters, and the further development of tourism should go in the direction of building accommodation capacities of that type that will enable the extension of the season and the creation of additional value in the tourism offer.

In coastal areas, the emphasis should be placed on quality, while in areas that are becoming increasingly touristically interesting, such as Baranja, Lika, and Gorski Kotar, we need both quantity and quality of accommodation – added Štefičar.

Croatian tourism can and must do better

For sustainable tourism to thrive in Croatia, education for entrepreneurs and workers in this sector is necessary, and an example of this is Mastercard’s Uplift, a project launched in July last year.

– When we started thinking about how we could locally do something to help the battered Croatian economy a year ago, our target group quickly crystallized. Micro, small, and medium-sized enterprises in Croatia make up 99.7 percent of the total number of entrepreneurs, and tourism was the hardest-hit economic sector and needed a strong boost.

We believe that with the Uplift project we have done exactly what we wanted – provided tools for MSMEs that will make them more sustainable and resilient, and we will continue to do so in the upcoming seasons – stated Gea Kariž, Marketing Director at Mastercard, adding that the learning process is the most important for her – it is a process that never ends, both in private and business life.

Andreja Vukojević from the Croatian Chamber of Commerce joined the second season of Uplift as a project partner and mentioned tourism in Zagreb, which has been on the rise since 2014 and 2015, with a boom due to so-called city tourism bringing more and more visitors to the Croatian capital.

Unlike Zagreb and its surroundings, tourism is the primary activity on the Adriatic. The support of the Croatian Chamber of Commerce for Uplift is just one of a series of moves aimed at strengthening Croatian tourism.

– It is important that as partners in this commendable project, we jointly support micro, small, and medium-sized enterprises in their operations, both at the national and international levels.

The participation of the Croatian Chamber of Commerce as a partner in this project will also be used as an opportunity to reflect on the current state and challenges faced by this segment of entrepreneurship and to jointly ensure additional knowledge for their further growth and development – concluded Vukojević.