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We Know What Hotel Prices Will Be Next Year, and Who Plans Significant Increases

Next year is expected to be more stable regarding the increase in service prices in Croatian hotels compared to the previous year, with the exception of those undergoing reconstruction and improving service quality, which can justify higher prices. However, more than ever, hotels will need the assistance of sales tools that will manage prices on a daily basis, agreed the participants of the gathering dedicated to pricing policy and forecasts for the upcoming season at the Congress of Hoteliers organized by the Association of Employers in Croatian Hospitality.

Special attention will need to be paid next year to the economic situation in key markets from which our guests come, Germany and Austria, and to see whether the crisis being discussed will be as intense and how it will affect consumer behavior.

The analysis of hotel accommodation prices from 2023 compared to the previous year, presented by Leo Urlić from Edmond Revenue Management, showed that despite a significant increase in service prices this year, there was a decrease during the peak season, and in some places, prices even returned to those of 2022. The Director of the Croatian Tourism Association Veljko Ostojić emphasizes that in the future, the decline in inflation rates should also be taken into account when making pricing decisions.

– We saw that this year some lowered prices in July and August to fill units and sell rooms. This is a normal process and these are revenue management decisions, which already function in larger companies, but in the future, these tools will be indispensable for most in the sector. There is no longer the practice of agreeing on prices with tour operators in August and having that set in stone; there are tools that allow us to manage prices daily according to demand – says Ostojić.

Davor Brenko from Valamar Riviera believes that 2024 will be a stabilized year for prices at Valamar.

– We are preparing for a return to a stable environment, where products that have improved quality will be able to afford price increases, while those that are not in that segment must be more cautious with corrections – says Brenko. Jadranka Gojtanić from Maistra considers it important to listen to guests.

– In the premium segment, there is no fear; guests are less sensitive to price increases, but in other segments, analyses of guest opinions and behavior need to be conducted, and the gain from price increases should be qualitatively assessed against potential volume loss – said Gojtanić.

An example of a hotel that will certainly raise prices by 25 percent compared to 2023 is Villa Dubrovnik, a luxury hotel that has just begun an investment in reconstruction, revealed Ivan Rudolf Gajić, the hotel’s sales and marketing director, who already had an ADR (average daily rate) of 800 euros this year. Regarding the past season, Villa Dubrovnik noticed a reduced interest from guests at the peak of the season compared to before, which they attribute to climate change.

– Guests are increasingly interested in vacations during months when it is not so hot and when there are not so many crowds. Our off-season traffic has increased, and if we had not closed on October 2 due to reconstruction, we would have had a lot of guests until November – says Gajić.

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