Hoteliers: The Higher the Quality and Better the Facilities, the More Occupied

Hoteliers have had a successful tourist year, with hotels being more occupied the higher their quality and star rating, said Veljko Ostojić, president of the hotel association UPUHH, at the 26th Congress of Hoteliers. The traditional congress organized by UPUHH (Association of Employers in Croatian Hospitality) gathers around 250 domestic and foreign professionals today and tomorrow. This year’s results and forecasts for the next year are being presented, with an emphasis on investments that Ostojić says ‘must strengthen’.

Regarding this year, he stated that ‘there were no major incidents’, and the market breathed differently in certain months, but managed to perform well, especially those who invested in quality. He sees confirmation of this in the fact that four and five-star hotels were the best occupied during the summer peak, at around 95 and 92 percent.

– Hotel capacities this year did not grow exponentially, but rather in quality. It is to be hoped that the number of around 182 thousand beds in hotels will increase. For 2025, similar challenges remain – the global geopolitical situation, not-so-great economic trends in the markets, strengthening investments in hotels as they provide the greatest added value, digitalization, and workforce – said Ostojić, opening the congress.

He believes that the domestic labor market should be maximally engaged, that procedures for issuing permits for foreigners should be further reduced, and that strong education should continue. If all this is achieved, 2025 could be another successful year, said Ostojić.

When asked about prices and whether they have risen for the next year, he said that the time when prices for the next year were formed in August has passed, but with new tools and technologies, they can change from day to day and achieve better results depending on supply and demand, in which he highlighted the great importance of revenue management.

Major investments are underway, and there will be more

Minister of Tourism and Sports Tonči Glavina emphasized the importance of hoteliers for overall tourist traffic. He called this tourist year the most successful and historic, in which it was shown that Croatia is becoming a year-round destination.

– This shows that we are on the right track and that we are implementing strategic documents, but it should be said that 2024 was not easy for tourism, and thus the success is greater and means that we have capable people. Now is the time to recognize our advantages, from the coexistence of tourists and residents to the safety and preservation of the country and to adapt to trends. New legal frameworks bring new tools, but also responsibilities and obligations for all for the development of sustainable tourism – Glavina stated.

He indicated that major investments in tourism are underway and the allocation of around €350 million in grants, as well as a new credit line for small, medium, and large enterprises, in which the principal may also be forgiven. In total, this line is worth €170 million. In 2025, he expects growth and completion of several major investments, especially in hotels.

He called for caution in price formation to ensure they are acceptable and competitive, as value for money is the main motivation for choosing holiday and travel destinations.

Physical growth, but a decline in profitability

Chief Economist of HUP Hrvoje Stojić said that the prospects for 2025 are good for the economy and tourism, with an expected economic growth of around three percent, and that tourism remains the strongest economic sector with a share in GDP of nearly 20 percent.

– Compared to other EU countries, Croatia has recovered somewhat faster in tourism from the pandemic in arrivals and overnight stays, but due to rising prices and all costs, i.e., inflation in 2024, there has been a real decline in revenue and profitability for the second year in a row, including for hoteliers. Investments need to be increased and the season extended, but even then it will be difficult as hotels constantly have to increase investments in labor, which are ever-increasing – said Stojić.

Climate, safety, and price are key for European travelers

HTZ Director Kristjan Staničić spoke about tourism results for the first ten months, with one percent more overnight stays by the end of October and three percent more tourists than in 2023.

– By the end of the year, we can expect around 21 million tourists and, according to HNB forecasts, around €15 billion in revenue from foreign tourists, while for 2025, we need to think about prices, as if they are accompanied by quality, there will be no problems, but if not, there will be barriers. Research has shown that we were somewhat more expensive than Greece and Spain in 2024 and that around 80 percent of Europeans are changing their travel habits due to climate, safety, and prices. Croatia certainly has both the space and the wisdom to maintain price competitiveness – Staničić stated.

At the congress, awards were given to the best hotel directors in Croatia this year, with Tanja Janjatović (Hotel Amadria Royal Opatija) receiving the award for those in the small/boutique hotel category, Mara Ladovac (Hotel Maistra Amarin Rovinj) for three and four stars, and Sanel Omerčahić (Hotel ALH Bellevue Dubrovnik) for five stars.

On the second day of the congress, November 27, the conference ‘Hotel House 2024’ will take place, where 11 scientific papers in the field of hospitality and hotel management will be presented in collaboration with the Opatija Faculty.