Tourism 2024: A Year of Growth, New Laws, First Price Appeal and Protest

Croatian tourism in 2024 was successful, with increases in tourist traffic, marking its 25th year of growth and development, during which Croatia has transformed into one of the most sought-after global destinations. Along with many other challenges, it enters 2025 with new legal regulations for sustainable tourism management. The government, the Ministry of Tourism and Sports (MINTS), and the Croatian Tourist Board (HTZ) have all rated 2024 as a successful and record-breaking tourist year, with satisfaction expressed by almost all professional associations. They agree that the year was unpredictable, at times challenging due to geopolitics, climate change, and the constant rise in prices and all costs, as well as a shortage of workers.

Climate and Prices

The hot summer has activated the realization that the summer season may no longer be able to be conducted as before, requiring more attention and investment in adapting the offer, as well as working conditions to climate changes. The year also brought a shift in promotion in foreign markets, with targeted campaigns and presentations, considering the economic situation of each market. According to many European studies, price will be ahead of all other motives for choosing a holiday destination.

Despite these trends and rising prices above those in competing countries, which were also topics in foreign media, tourism in 2024 fought for almost record attendance and spending, especially in the pre and post-season, alongside a stable summer peak. This is also expected in 2025, making Croatia, according to official assessments, a year-round destination, which is also the goal of official state policies.

However, partly due to rising prices, at the end of the year, the Croatian National Bank (HNB) revised its initial estimates of growth in tourist revenues from foreign tourists (who account for about 90 percent of total traffic) compared to 2023 – in June, estimates were at four percent growth or 15.2 billion euros, but in December, before the quarterly results were published, the HNB reduced them to an expected 14.9 billion euros or a growth of 1.8 percent compared to 2023.

The rise in tourism-related prices in Croatia was mentioned, significantly faster than in competing countries; for example, compared to 2019, prices have risen by 50 percent, while in competitors like Greece, Italy, and Spain, by 15 to 20 percent. This means Croatian tourism is losing market share, as the number of overnight stays in competing countries has been increasing faster.

At the end of the year, the HNB will announce revenues from foreign tourists for the third quarter, which accounts for up to 60 percent of total annual revenue, and for the entire year in the first quarter of the following year, to which estimates of domestic tourist spending should be added, which was little discussed in 2024, and given the increase in the number of domestic tourists in 2024 and rising prices in tourism, their spending will be higher than last year.

For 2024, it is expected to end with more than 21 million tourist arrivals and more than 108 million overnight stays, which is three and one percent higher than in 2023, aided by good tourist visits in December due to many Advent events and Christmas and New Year offers. This would surpass the previously record year of 2019, when Croatia had 20.6 million tourists and 108.6 million overnight stays. This is far above the figures from 25 years ago, in 2000, when there were about seven million tourists in commercial accommodation in Croatia and around 39 million overnight stays.

Reform with New Legal Regulations for Sustainable Tourism

In 2024, a new Tourism Act came into effect along with accompanying regulations, following the strategy for sustainable tourism development until 2030, marking the beginning of tourism reform with an emphasis on new tools for measuring and managing tourism at all levels and a greater role and responsibility for local authorities.

At the end of the year, the Croatian Parliament adopted several laws related to tourism, all of which will come into effect on January 1, 2025.

According to the Law on Management and Maintenance of Buildings, owners who rent apartments for short-term rental will need to obtain the consent of two-thirds of the co-owners in the buildings, and those who already rent apartments for short-term rental must obtain this consent within five years, by December 31, 2029.

Changes to tax laws will also come into effect in 2025, introducing a property tax, prescribing new ranges for determining the amount of flat tax per bed, new ranges for income tax rates, increasing the basic personal allowance and the threshold for entering the VAT system, thus replacing the previous tax on holiday homes with a property tax, which will range from 0.6 to eight euros per square meter, and is mandatory for local units, which can determine the amount of this tax themselves.

“Hosts,” individuals who have small tourist rentals as an additional activity in the property where they have registered their own residence, will be exempt from paying the new property tax, and the new tax changes also prescribe new ranges for determining the flat tax from renting apartments, rooms, and beds to tourists.

In accordance with the tourism development index, municipalities and cities will decide on the amount of flat tax per bed within prescribed limits. This range will be between 100 and 300 euros for the most developed units, for those in the second group from 70 to 200, the third from 30 to 150, and in the least developed tourist areas from 20 to 100 euros per bed.

The amended Hospitality Act introduces the term “host” as a lessor who has a registered residence in the area of the local (regional) self-government unit where the facility providing hospitality accommodation service (with the possibility of breakfast service) is located. A lessor who rents an apartment in a multi-family and mixed-use building will not be considered a host, as defined by the provisions of the law governing the management and maintenance of buildings.

Provisions relating to the validity period of temporary solutions for conducting hospitality activities and providing hospitality services in facilities for which legalization and regulation of ownership rights in land registers have not been completed are also changing, extending the deadline to a maximum of December 31, 2026. This allows for the continuation of activities until that deadline, but simultaneously abolishes the possibility of submitting new requests for issuing temporary solutions from January 1, 2025.

Continuation of Investments

In 2024, after the pandemic slowdown, investments in renovation, sustainability, and the opening of new hotels, resorts, and other facilities resumed in tourism. The relevant ministry will enter 2025 with an increased budget of more than 40 percent, with over 30 percent for sports compared to 2023, which will go towards sports infrastructure, umbrella associations and federations, clubs, education, coaches, equipment, and more.

Sports are included in the promotion of tourism, and vice versa, as the combination of the success of Croatian athletes and the rich tourist offer of the country has proven to be a winning combination. Investments are also being made in tourism, with ongoing investments from the National Recovery and Resilience Plan (NPOO) of around 350 million euros expected to be completed in the next few years, as well as from the private sector, supported by EU funds, and also a new credit line from HBOR for sustainable tourism, for which 170 million euros have been secured.

Loans are intended for hotels and similar accommodations as well as campsites, for entrepreneurs of all sizes, for investments in fixed and working capital, construction or renovation and reconstruction of existing facilities, equipping and introducing content.

In 2025, the opening of several new hotels under the brands of global hotel chains is also expected, including Marriot in Cres, Accor with another Movenpick, alongside Zagreb and in Novi Vinodolski, and the opening of the first Hyatt hotel in Croatia in Zadar is planned, the resort and Pical zone in Poreč are being completed, the Monumenti hotel and resort in Pula are opening, and other facilities, while in 2024 there were openings, including a new Hilton in Opatija, Movenpick and Pullman in Zagreb, and others.

Restaurateurs have also invested, with more and more advocating for the development of gastronomic and wine offerings as part of the destination experience, emphasizing the importance of premium offerings.

Workers are Lacking and Despite Increases, They are Dissatisfied with Salaries

In 2024, according to statements from companies, tourism had among its higher costs labor costs, increasing salaries and other working conditions, with bonuses and rewards, to retain and attract workers, who are still lacking, especially quality skilled labor, so the increase in ‘imports’ or the issuance of work permits for foreign workers in tourism continues.

In 2025, with the opening of new hotels, resorts, restaurants, cafes, bars, and similar establishments, even seasonally again, there will be an increased demand for workers, and already from the fall of 2024, nearly a hundred new job openings for 2025 in new hotels, resorts, and others are being advertised. Some have already found workers, but they are few, according to the sector, even though salaries have been increased.

At the end of the year, tourism unions warned of dissatisfaction among domestic workers in tourism regarding salaries and working conditions, which they consider inadequate, and although they are protected by the sectoral collective agreement, they say that increases are not visible in practice and that their salaries, especially for auxiliary jobs, for which the most workers are needed, are still among the lowest across all sectors.

First Price Appeal and First Protest

In 2024, state tourism officials, including those at the government level, began for the first time to warn and appeal to the sector to be cautious in setting prices for the following year due to rising prices, as further price increases could “cost dearly,” given the significant growth in 2024. In previous years, there were no such appeals, and officials usually commented that pricing policies are part of the business strategy of each individual company and entrepreneur, and that they cannot interfere in that, while the sector itself has stated, as it does now, that prices are set according to demand, and that it is not good to lower prices as they are hard to return to later, and that value for money should be offered.

Hoteliers and those from the camping sector, on the other hand, emphasized that the best-occupied facilities are those with more stars, i.e., the highest quality, and thus the most expensive, as there are guests who want and can pay for that, and that prices are determined by demand, which was similarly stated by restaurant and hospitality associations. At the end of 2024, a protest related to tourism occurred in Croatia for the first time, in Zagreb, by small family rental owners-citizens who rent accommodation to tourists for short periods in their apartments, houses, weekend homes, villas, and other properties.

Unlike protests against tourism and the renting of apartments and houses to tourists in various destinations in Europe because citizens have nowhere to live and rental prices and apartment prices are very high, in Croatia, small renters protested against measures from new laws aimed at reducing and stopping short-term rentals to tourists, especially in residential buildings and properties in places where they do not personally reside.

They also protested against the introduction of property tax on short-term, tourist rentals, the increase of flat tax per bed in tourism, the need to obtain consent for an apartment in a building from 80 percent of co-owners, the distinction between “hosts” and “lessors” in tourism, and they believe that the goal of this is “antisocial” and that the number of beds owned by small renters should be reduced in accommodation that makes up more than 50 percent of total tourism capacity.