This is a historic year for Croatian tourism: It is time for quality, not mass tourism

Croatia has the highest accommodation capacity per capita in the EU, double that of second-placed Iceland, and three and a half times higher than the EU average. The utilization of these capacities is significantly below the EU average, and Croatia is not even among the top ten countries. We lag behind all our Mediterranean competitors, and we are at the bottom, with only five EU-27 countries having lower utilization than us, Milan Horvat, CEO of Fima Plus, announced on LinkedIn.

– Regarding the development of tourism so far, we have practically left the market to itself, and due to the extremely low tax burden on private accommodation, combined with a decade of historically low interest rates, we have had a decade in which the number of beds in private accommodation literally exploded, doubling from 2010 to today to over 800,000 beds.

Many simply saw an opportunity for a good investment by investing in the construction or purchase of apartment accommodation. A completely uncontrolled development, unfortunately. Today, we have over 60 percent of capacity in private accommodation, while in Greece or Italy, for example, private accommodation makes up about one-third, and in Spain only 24 percent, explained Josip Mikulić, scientific advisor at the Institute for Tourism and professor at the Department of Tourism at the Faculty of Economics in Zagreb.

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Milan Horvat

photo Rene Karaman

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We are only better than Peru

And since the utilization rate of private accommodation is very low, only about 14 percent or about 55 days, while in hotels it is over 40 percent, and in campsites over 50 percent annually, we have only created even greater pressure on the ‘peak’ season, July and August, when crowds have already become unbearable in some places.

– This is classic mass tourism in which, apart from apartment owners, fast food outlets and supermarkets benefit the most. There is no simple and quick solution, but the situation can certainly be alleviated and improved to a certain extent. To begin with, it is important to put an end to further apartmentization where there is already too much accommodation. It seems to me that the critical mass among experts and decision-makers is growing, realizing that radical changes are needed in our tourism, and thus a new tourism law is being prepared, said Mikulić.

The calculation of income from international tourism per overnight stay (average income per overnight stay of foreign tourists), based on OECD data for 2019, shows that with a meager $143 per overnight stay of a foreign tourist, Croatia earns significantly less than all Mediterranean competitors. For example, Slovenia earns double, Horvat wrote on LinkedIn. Out of 32 countries for which data is available, Croatia ranks 31st. We are only better than Peru. Why are the differences so large, you may ask?

– It is hard to say without a more detailed analysis, but in my opinion, there are two main reasons. First, private accommodation dominates our capacities, and such tourists often simply do not need more than a bed, a place for a towel on the beach, and a supermarket. Second, in many places, we do not even give tourists the opportunity for greater spending. Shopping opportunities have traditionally been the lowest-rated element of the destination offer according to TOMAS research. On the other hand, many will return from, for example, Turkey with a piece of clothing, a piece of jewelry, or perhaps even a carpet.

However, it would not be correct to say that we are not a successful and increasingly popular tourist destination. But these numbers also clearly show that we are not utilizing the full potential of international tourism, but rather ‘building’ results through quantity, not quality. To improve the situation, it should be the other way around; we should develop quality and content-rich tourism, i.e., tourism with higher added value, which is also the proclaimed goal of the previous and new strategy, explained Mikulić.

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Josip Mikulić

photo Dražen Lapić

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A new era of Croatian tourism

We are realistically far from luxury, the professor believes, and we should avoid mass tourism, even though we are moving in that direction. Again, the unfavorable structure is behind the problem, so we have the opportunity to witness the paradoxical situation that many residential blocks along the coast remain empty for eight to nine months a year, while many cannot afford to live in their own place due to real estate prices.

– It is crucial to change the goals of tourism development. The goal should not be more tourists and profits where there are already many tourists, but controlled tourism development with the creation of quality jobs. We have a situation where prices in our tourism have almost doubled from 2010 to 2019, while wages in tourism during the same period have only increased by 24 percent, according to DZS and TOMAS research, added Mikulić.

Nevertheless, Horvat believes that with the entry into the EU, the Schengen area, and the eurozone, the process of searching, improvisation, and coping in the Croatian economy has ended, and a strategic turnaround in its positioning within the community of the most developed European countries is taking place, which will most affect Croatian tourism potential.

– By positioning within the EU, tourism in Croatia gains a completely different dimension and enormous potential for development. Namely, the Croatian coast has become the coast of the European Union, i.e., it enters the environment of the highly developed EU economy. Tourism is essentially an industry of highly developed countries, both economically and civilizationally, and the EU economic environment is its natural environment for quality long-term development. In the previous environment of the underdeveloped economy of Croatia, tourism was ‘unnatural’, i.e., disproportionately developed in relation to the development of the Croatian economy.

This is a historic year for Croatian tourism. With it, the old business model ends, and a new one begins in which our Adriatic coast becomes an integral part of the European tourist offer. The sooner we realize this and start thinking about tourism through this prism, the better and more quality we will live with and from it, concludes Horvat.