In the Opportunity Region, There Are Opportunities for Growth and Investment

The western region encompasses three counties whose initial letters form the acronym 'Opportunity'. These are Primorje-Gorski Kotar, Istria, and Lika-Senj counties, each having specific opportunities and development possibilities compatible with the opportunities arising from the surroundings. Thus, Primorje-Gorski Kotar County stands out as a transport and logistics center alongside specialized shipbuilding, Istria as a self-destination for some specific forms of non-mass tourism, and as a seat of the agricultural processing industry based on indigenous Croatian products, while Lika-Senj is ideal for the cultivation of various eco-products and overall eco-production, as well as sports tourism and the inevitable wood industry.

Considering that at the time of writing this article, aggregate data from publicly published financial reports for 2021 are not yet available, data from 2019 and 2020 will serve, showing how much and to whom the corona crisis caused damage in 2020 compared to the 'good' year of 2019.

Consequences of the Pandemic

In the Opportunity Region, tourism and related activities are dominant. Trade activities (wholesale and retail) stand out as in all other parts of Croatia. Their share in the revenues of the Opportunity region in 2019 was 25 percent, and in 2020 it decreased by 1.6 percentage points. Hospitality, travel agencies, and catering, whose revenues in 2019 amounted to 14.2 billion kuna and had a share of 17.7 percent in the total revenues of the region, fell by 6.5 billion kuna, or 45.8 percent, to 7.7 billion in 2020 due to the market contraction caused by the corona crisis, and their share in the region’s revenues dropped to 9.4 percent (even 8.3 percentage points less).

Under the influence of the significant net loss incurred by hoteliers in 2020, the net profit margin of the region of 3.2 percent for 2019 was replaced in 2020 by a negative margin of -0.2 percent.

– Isolated, hoteliers fell from a net profit of 958 million kuna in 2019 to a net loss of 1.4 billion in 2020, which is terrible but true, and especially bad because in the previous period, expecting further growth, they invested in new capacities and improving the quality of accommodation and services – says analyst and consultant Nikola Nikšić, adding that since eight hotel chains and hotels are listed on the ZSE, data on their operations for 2021 have been available since the end of February 2022, so insight into them can provide a picture of trends in a period that includes several 'good years' up to 2019, 2020 as a crisis year, and 2021 as post-crisis.

Gradual Lagging

The main characteristic of Lika-Senj County is its lagging behind the economic and social level of development of the rest of Croatia. This lag has been most influenced by the lack of its own accumulation, weaker transport connectivity, and perhaps the most important factor is the chronic shortage of highly skilled personnel that has been troubling this county for a long time. This unfavorable structure of the population and skilled personnel is one of the main limiting factors for the economic development of Lika-Senj County. Also, the age coefficient in the county is, according to HGK data, 30.5 percent, while the critical level is set at 12 percent, so these problems also impose themselves.

Nevertheless, development must start in some direction, and for Lika-Senj County, these are tourism, agriculture, and the wood industry, which is also foreseen in the 'Study of Long-Term Development of the County'. Additionally, the county sees new opportunities in projects for the development of assisted and mountainous areas, as well as in drawing non-repayable EU funds in the area of Lika-Senj County and opportunities for entrepreneurs in the period 2021 – 2027.

In this operational program, as emphasized by Minister Tramišak a few months ago, there are numerous opportunities and substantial funds for achieving balanced regional development. There is also an Integrated Territorial Program worth almost 14 billion kuna, created to help the most remote parts of Croatia.

Best in Drawing EU Funds

Primorje-Gorski Kotar County is among the most economically developed counties in Croatia, considering the total gross domestic product, gross domestic product per capita, as well as the share of gross added value in the achieved GDP (gross added value) of Croatia. The county bases its economic activity on a centuries-old tradition in industrial production, from shipbuilding and oil derivatives production to the wood processing industry, pharmaceuticals, and other products and tourism.

As the main developmental problems of the economy of this county, low economic growth, insufficient focus on technological and innovative development, and unemployment are highlighted. The space for the county’s development is seen in further strengthening activities that should increase the competitiveness of the entire economy, as well as enable its sustainable development (processing industry, tourism, agriculture, forestry, and fishing).

Otherwise, Primorje-Gorski Kotar County is among the most successful counties in drawing money from European funds, and at this moment, there are as many as 65 projects in implementation for which non-repayable funds have been approved, amounting to around 424 million kuna. According to county data, this year it is planned to allocate more money in the budget compared to the previous two years for investments, healthcare, education, and support.

– Primorsko-goranska županija treća je po visini ulaganja u projekte financirane iz EU fondova, a prva po broju takvih projekata. U planu su velika ulaganja u gradnju škola i zdravstvene ustanove, ali i ulaganje iznad standarda u obrazovanju. Kroz NPOO i novu financijsku perspektivu plan je prijaviti projekte u zdravstvu vrijedne više od 500 milijuna kuna – najavljuju iz PGŽ-a i dodaju da je ove godine za poduzetnike, obrtnike i poljoprivrednike planirano gotovo 14 milijuna nepovratnih potpora.

Big Plans

Regarding projects planned for the upcoming period, Primorje-Gorski Kotar County Prefect Zlatko Komadina recently stated that despite the corona, work and construction continued in the county, and the total value of completed projects amounts to 80 million kuna. He also announced that by 2024, they plan to invest 91 million kuna in equipping healthcare facilities, for a new Health Center in Opatija, and that a large project for the construction of the Rujevica Health Center has been initiated, where the Emergency Medical Institute, Health Center, and the headquarters of HGSS with a helicopter base will relocate.

In the project database managed by the Regional Development Agency of Primorje-Gorski Kotar County, 590 projects from the PGŽ area are recorded in a high phase of preparedness for the new financial perspective, with a total value of 14.2 billion kuna, and the largest part relates to communal infrastructure and tourism. Some of the planned projects relate to the digitalization and robotization of healthcare, such as the introduction of telemedicine services in radiology, the mobile clinics project, the revitalization of the Governor’s Palace, the construction and extension of schools, the construction of the Radeševo cable car, and the development of several regional development and innovation hubs.

Regarding investments in tourism, the plan is to focus on infrastructural investments in additional tourist, educational, visitor, and entrepreneurial content and products based on natural heritage, where the construction of the Radeševo cable car stands out as creating conditions for the use of the Platak area throughout the entire calendar year, as well as the construction of a cable car on Učka.

Investments in Tourism

The accelerated economic development in Istria County has recently been marked by significant investments primarily in the tourism sector, then in the IT industry and construction, while the crisis, followed by bankruptcy and liquidation of the largest Istrian shipyard, and difficulties in finding the necessary personnel, have swung the pendulum on the other side of the county’s development. Recently, the most important investments have been realized in the tourism sector, often involving the construction of new accommodation facilities, mainly of the fifth category, and the reconstruction of existing facilities.

Companies such as Valamar Riviera, Maistra, Arena Hospitality Group, and others from the tourism sector are in an investment surge worth several billion kuna.

– Investments for the 2022 season in hotels, resorts, and camps managed by Valamar are worth around 530 million kuna and represent an important driver of growth and positive expectations. Among the largest investment projects is the investment of Imperial Riviera of 67 million kuna in repositioning Dalmatia [Placeshotel] by Valamar in Makarska, which is planned to open in mid-May. Investments by Helios Faros are worth 220 million kuna and relate to the construction of Valamar Amicor Green Resort and the Aquamar pool complex on the island of Hvar. Valamar Amicor Green Resort is a new concept of a fully sustainable resort that follows the highest standards of green construction, the use of renewable energy sources, and a high level of energy efficiency, which Valamar plans to open in July this year – they emphasize from Valamar.

Valamar’s investments for this season also include the renovation of the Corinthia Hotel in Baška on the island of Krk into the Valamar brand Sunny Plus and improving service quality at the Valamar Bellevue Hotel in Rabac.

Not to mention only investments in tourism, this year in Istria County, co-financing of investments in port area infrastructure is also planned, for which 5.4 million kuna has been secured, specifically one million kuna for the Port Authorities of Poreč, Rovinj, and Umag-Novigrad, 1.5 million kuna for LU Pula, and 900 thousand kuna for LU Rabac.

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