The Season Breaks Records, Tourist Company Stocks Do Not

The whole country will live only from summer like a kidney in lard – these famous lines from Hladno Pivo cannot be applied to the owners of shares in tourist companies. At least if we judge by the long-term trend of their price movements.

Recent official data has shown that the summer of 2025 brought yet another record tourist season. According to data released last week by the Croatian Bureau of Statistics, from January to September, there were 18.7 million arrivals and 89.4 million overnight stays in commercial accommodation facilities, which is an increase of 2.3 percent in arrivals and 1.2 percent in overnight stays.

If the June forecasts of the Croatian National Bank come true, revenues from tourist spending by foreign guests this year should increase by 3.6 percent, reaching 15.5 billion euros. This means that half a billion euros more will flow in from foreign tourists compared to 2024, or about 120 million euros more. When looking at this data, anyone with a bit of entrepreneurial spirit would want to grab at least a piece of that enormous financial pie.

How Much Do Apartments Earn

The first and most popular way is renting accommodation. Of course, provided you have at least a hundred thousand euros to buy at least one small apartment or the creditworthiness to take out such a loan. However, there is another way to participate in the distribution of the tourist pie without much initial capital, albeit indirectly. This is the purchase of shares in tourist companies. Is this method complementary to investing in apartments and does it provide equal (or perhaps better) returns?

First of all, it should be emphasized that earnings from renting apartments are not as easy money as some might think. Costs today are significantly higher than a few seasons ago, and what many forget is that a large part of these costs is fixed, regardless of whether the landlord has guests or not, says Barbara Marković, president of the Croatian Association of Family Accommodation (HUOS).

– Our costs include utilities, maintenance, cleaning, bedding, internet, fees, insurance, marketing, and investments in equipment. In addition to all this, energy, service, and material prices have significantly increased in recent years. Many forget that the cost of the owner’s time, their work, care for guests, and maintenance of the property is never accounted for in practice, even though it is extremely large – emphasizes Marković.

According to some analyses, costs for smaller landlords take between 50 and 60 percent of revenue, adds Marković. When it comes to profit remaining after deducting costs, it strongly depends on occupancy, says the HUOS leader.

– For example, in a shorter season, one apartment earns between 35 and 40 percent of total revenue, while in a longer season with better occupancy, it can approach 50 to 55 percent. This is our realistic range from practice, noting that many costs are fixed and that a shorter season bears them more heavily – states Marković.

Weaker than the Market

The problem of the short season is somewhat mitigated in the case of hotels. They open their doors even before Easter and have guests until late autumn. Financial reports from the largest hotel companies show that their growth in the number of guests and overnight stays was higher than the overall market.

For example, the largest tourist company in the country, Valamar Riviera, recorded 6.2 million overnight stays in the first nine months at the group level, which is almost four percent more. However, due to the effect of higher prices, the company reported ten percent higher revenues – a record 433.4 million euros.

Maistra’s revenue increased by five percent to 240 million euros, while the Pula-based Arena Hospitality Group also had record revenues of 129 million euros in the first nine months of this year, which is three percent more. In addition to large hoteliers, smaller tourist companies also had a successful summer.

For instance, the Baljan Mon Perin reported revenue of 15.4 million euros, which is six percent more than last year. If we apply the metric of net profit share in total revenues used for apartments to tourist companies, then Mon Perin’s 6.3 million euros is 41 percent of revenue, while Maistra’s 72.5 million euros is almost 30 percent. Valamar’s 93 million euros in profit constitutes just over 21 percent, and Arena’s net profit of 21 million euros is 16 percent of revenue.

It should be noted that hoteliers pay much higher taxes than apartment landlords. For example, Arena allocated one-fifth of its gross profit for taxes, while Valamar allocated just over eight percent.

However, based on the movement of hotel stock prices, one could not conclude that we are a country dependent on tourism and that every summer we fear whether the queues on the highways are long enough. If you bought any of the more liquid tourist stocks (Valamar, Arena, Maistra, Plava Laguna, Jadran, Imperial Riviera, and Mon Perin) before 2019, today you are nowhere near the growth of the entire domestic stock market.

Namely, while during that period Crobex jumped by 116 percent, the highest price increase among ‘tourists’ was achieved by Plava Laguna, at 52 percent, which is half as weak as the index. Maistra’s and Valamar’s stocks increased by 39 percent and 30 percent, respectively, while Mon Perin, listed since spring 2022, has strengthened by 25 percent so far. Shareholders of other companies are at a loss, with the biggest drop coming from Jadran’s shares, at 38 percent.

Where the Problem Lies

A slightly shorter interval since the beginning of 2023, since the Crobex’s continuous rise began, shows that the stock measure has jumped by 89 percent. Valamar came closest to this result with a 58 percent increase in stock price, while others achieved noticeably worse results. Thus, Maistra’s stock strengthened by 36 percent, Plava Laguna’s by 30.5 percent, and Mon Perin’s by 20.45 percent. If they are quite solidly profitable, why does the market not recognize tourist companies?

The answer to this question lies in the structure of the domestic stock market, financial analysts explain. Namely, the growth of the market, viewed through the lens of the Crobex index, is significantly contributed to by a few companies whose operations are exceptionally growing due to historical megatrends, which is followed by the growth of their stocks, says Erste Bank analyst Davor Špoljar.

– In this context, the growth of tourist company stocks may seem modest, but Valamar’s nearly 70 percent growth or Plava Laguna’s nearly 55 percent in the last three years is extremely attractive, especially when you add the dividends these companies have paid. Tourist companies are facing challenges such as geopolitics, the macroeconomic situation in major emitting markets, and significant cost increases. However, since the outbreak of the pandemic, every year has been uncertain for the tourism sector, but the results have improved every year after the initial shock. This certainly includes the results in the first nine months of this year – claims Špoljar.

Those considering investing in tourist stocks should also know that they are buying not only the core business but also real estate. Domestic tourist companies, unlike global hotel chains like Marriott or InterContinental, have capital-intensive business models, which de facto means that the business is not separate from real estate, emphasizes Špoljar.

– Therefore, tourist companies in Croatia often own significant assets, from hotels, camps, and apartment complexes to land. It is certainly worth noting that the actual value of these assets is mostly not visible from financial statements because companies generally account for them at historical cost. We believe that long-term investors certainly take this into account – emphasizes the Erste analyst.

Desirable Tax Model

For landlords, the amount of tax has been almost symbolic for years, which was somewhat changed by last year’s tax amendments. The new tax burdens have mostly affected landlords who live exclusively from a few weeks of the high season, says Marković.

– In the association, we believe that in the future, a model of taxation based on actual profits would be highly desirable in family accommodation. This way, everyone would pay tax according to what they actually earn. Such a system would be sustainable, fair, and encouraging as it would give people a reason to continue investing and developing tourism on healthy foundations – believes Marković.

For years, there have been debates in the domestic public about whether tourism is a blessing or a curse for the Croatian economy and society as a whole. However, for all those who earn from it, directly or indirectly, this dilemma is probably not that important.