Sustainable tourism: The new law is good, but what follows is much harder – implementation

At the beginning of the year, the first umbrella Tourism Act came into force, emphasizing the development of tourism towards sustainability, encouraging investment in tourism, and protecting and assessing the resource base. This followed after the Ministry of Tourism and Sports drafted the Strategy for the Development of Sustainable Tourism by 2030, which was adopted by the Croatian Parliament, and the National Plan for the Development of Sustainable Tourism by 2027. Additionally, the Croatian Tourist Board adopted the Strategic Marketing and Operational Plan for Croatian Tourism from 2023 to 2027.

The new law also foresees the adoption of a series of subordinate acts, for example, regulations on indicators for monitoring the development and sustainability of tourism, on the methodology for calculating the carrying capacity, on the way of entering data into the integrated information system and accessing it, on the methodology for developing a destination management plan, regulations on monitoring the effectiveness of tourism support, and the Regulation on encouraging investment in tourism was adopted by the Croatian government at the end of March. Our interlocutors have positively assessed the efforts of the new law.

Encouraging investment

The Ministry emphasizes that working groups are intensively working on all regulations that will be published for public consultation. After the regulations are adopted, they said in the Ministry, tourist boards are obliged to calculate the carrying capacity for the destination and develop a management plan in the manner and within the deadlines prescribed by the Law. Due to alignment, after the adoption of the Tourism Act, an analysis of the necessary changes in existing regulations will be conducted.

– The categorization system will be improved by modernizing the regulations on the classification and categorization of facilities. The Strategy and National Plan foresee redefining the conditions for providing hospitality services in households, taking into account social, ecological, and economic conditions. This also means differentiating hosts from those who provide accommodation services in households as an economic activity, i.e., landlords. Investment will continue to be encouraged by reducing profit tax or activating inactive state property, as well as through the Tourism Fund.

—

—

After regulations governing the lease of tourist land for hotels and camps were adopted, higher revenues for the Tourism Fund are expected, thus greater investments in public tourist infrastructure. The Strategy and National Plan foresee numerous other measures and activities, and there is still much work ahead of us – they state in the Ministry.

Challenges of ‘overtourism’

For Veljko Ostojić, director of the Croatian Tourism Association, the new Tourism Act is good and is strongly supported by the Association’s members: the Employers’ Association in Hospitality and the Croatian Campers Association. He views the Act as the beginning of a change in thinking in Croatian tourism towards sustainability, as the existing way of its development does not allow for sustainability in the long term, and even medium-term sustainability is questionable. He explains that there is now a problem of overtourism in an increasing number of coastal destinations, an unfavorable accommodation structure with explosive growth in properties for short-term tourist rental, and an ever-decreasing share of hotel accommodation.

—

Veljko Ostojić

—– The largest part of our accommodation capacity consists of properties for short-term tourist rental in a narrow coastal strip. These properties are filled for only about 60 days a year and do not contribute much to the local communities outside that period. Quite the opposite, they are the main reason for the strengthening of the ‘overtourism’ problem in the summer on the coast and the inability to extend the season beyond the summer months. In less than twenty years, Croatia has doubled the number of tourist beds to nearly two million, while infrastructure has progressed little. Meanwhile, the share of hotel beds has fallen to 9.5 percent of total accommodation capacity, which is the most unfavorable in the Mediterranean. All other successful Mediterranean tourist countries have significantly higher shares of hotel accommodation, which is associated with higher average tourist spending and a smaller impact on the environment and the population. The national strategy and the new law aim to shift from tourism in which we give our natural wealth for relatively little money to more sustainable tourism, for which it is crucial to increase the share of organized accommodation in total tourist accommodation. Croatia should strive for a more even distribution of traffic throughout the year for sustainability. The new national strategy and the new law provide a good framework that allows local communities to manage tourist development more effectively and encourage an increase in the share of organized accommodation. Soon we will see which local communities will reach for solutions from the new law – Ostojić expects.

A tailwind

The new Tourism Act provides Croatia with an excellent framework for its development, but even more important than that is the precise operationalization of what it regulates, believes Šime Klarić, president of the National Association of Family and Small Hotels. He recalls that we have had many plans and strategies that have remained dead letters on paper, and it is crucial that the Tourism Act is applied correctly in substance and serves as a tailwind primarily for small entrepreneurship. Especially when it comes to complex tourist products, which Klarić shows that the entrepreneur engages in with certain risks, greater than, for example, renting apartments.

—

—– It is also good that the new law will allow the local community to decide on the planning of accommodation capacities. However, the question is who will decide on the plans? If they are consultants, it could happen that they represent their visions, and if they are citizens, they could side with apartmentization. Caution is needed, and the general interests must be considered, as sustainability contributes to the competitiveness of business entities and destinations in the global market. Investment by family and small hotels in sustainable operations brings long-term savings, and this is best seen in increasingly expensive energy. To reduce this cost, it is necessary to invest in renewable energy sources, heat pumps, and more efficient systems. The investment of family and small hotels will certainly be supported by the National Recovery and Resilience Plan, new financial instruments for the next period, and our association is negotiating with the responsible ministry to establish a special line for family and small hotels in the Energy Efficiency Fund. Three years ago, in cooperation with the Ministry of Tourism and Sports, we were the first to launch the Eco Green Hotel project, and more than 30 of our facilities, depending on the criteria, have silver, gold, or platinum certificates and the prestigious Eco Green Hotel label. We have also launched a new sustainable gastronomy project ‘Gorumet Authentic’, and this year, as part of the ‘Decarbonization of Family and Small Hotels’ project, the first seven facilities received a certificate for measuring their carbon footprint. By the end of the year, we expect at least thirty more to join them – Klarić states.

He emphasized that he greatly appreciates private renters because many of today’s family and small hotels have grown out of that tradition. He actually sees that the problem of apartmentization lies with large global real estate players who, using our infrastructure, beautiful beaches, nature, and heritage, rent out ten or so apartments in different locations while paying a symbolic tax.

– It is good that the new law aims to prevent further proliferation of apartments, as otherwise, a market collapse would occur. Due to the large number of apartments, it would not be profitable for anyone to rent. However, Croatia is safe, it is the closest destination to the largest emitting markets with a very good price-quality ratio. Therefore, our country is again at the top of tourist demand this year. And booking will always depend on the quality of our offer. If we continue to grow in quality, we need not worry about the future of our tourism – Klarić is convinced.

Preserving heritage

According to Zoran Pejović, a member of the Management Board of Jadranka tourism, the new law shows a satisfactory level of understanding of the needs of tourism. The calculation of carrying capacity under Article 18 is crucial for Pejović to balance tourist development with environmental preservation and quality of life. The most important thing, he said, is to ensure that regulations and rules are applied effectively and fairly, that all stakeholders are trained and equipped for implementation, and that small communities have the resources needed for alignment. He believes that the transition to sustainability may initially raise costs, but in the long run, it is an investment in the future.

—

—

—

—– Article 18 provides a framework for managing apartmentization, but its effectiveness will depend on the ability to adapt to local specifics. It is a good step, but it requires a sensitive approach. Also, changes in the Law will affect booking as they will promote destinations aligned with sustainable practices. However, they are not a unique concept that applies equally everywhere. What is considered sustainable in Zagreb may not correspond to the specifics of an outer island like Lošinj. Furthermore, the value that existing structures bring aesthetically and culturally often outweighs the advantages that new construction could offer. Is it not better to preserve buildings that are 150 years old, which may not meet all modern sustainability standards, rather than encourage the construction of new facilities that often neglect aesthetic and artistic value? Such an approach can bring additional value, especially in preserving cultural identity and rich heritage. The key issue is also that of seasonal workers and their impact on the destination during the peak tourist season. This requires contextual knowledge and cooperation among various sectors from tourism and construction to migration policies and urban planning that enable the construction of residential buildings or accommodation for seasonal workers – Pejović concluded.