Plenković: Reasonable Prices Key to Tourist Season

Prime Minister Andrej Plenković once again called on the tourism sector on Tuesday to adopt reasonable pricing, stating that this is a key issue that will affect this tourist season.

Plenković made this statement at the opening of the 5th session of the Council for the Management of Tourism Development, which he chaired, and which gathered numerous representatives from tourism associations, companies, and guild associations at the National and University Library (NSK), with the presence of several ministers, including the governor of the Croatian National Bank, Boris Vujčić.

The Prime Minister reminded that according to DZS data, inflation in April was 5.8 percent year-on-year, which is also a result of rising energy prices, while he pointed out that care must be taken that the increase in service prices does not contribute to rising inflation.

To make today’s meeting effective, he said, it would be good to have a more concrete follow-up in terms of pricing, “in a slightly smarter and better way than it was last year.” “This would be the greatest benefit for us, and of course for the sector and for the growth of the Croatian economy in general,” emphasized Plenković, highlighting pricing policy and service quality as the most important.

“The desire is for all of you to do well in business, but for us to benefit from it as a state, as an economy, and as a society, and to know that we have sent important messages in a timely manner,” he said.

He stated that tourist traffic this year is very good, despite global circumstances that do not favor tourism and energy security. Since the beginning of the year, there have been 2.3 million arrivals and 6.5 million overnight stays by tourists – with a growth of three percent in arrivals and 1.4 percent in overnight stays.

Investments in Continental Tourism and Growth Boundaries

Most of the traffic has been generated in the Adriatic part of Croatia, but Plenković also highlighted increases in continental Croatia – with a five percent increase in arrivals and three percent in overnight stays. “This means that we have intelligently invested in the development of continental tourism, which is in line with all the documents we have adopted in recent years,” asserted the Prime Minister.

He also pointed out that last year’s revenues from foreign tourists reached 15.3 billion euros, with a two percent increase.

According to him, revenues slightly above 15 billion euros, with about 22 million arrivals and 110 million overnight stays, are the “growth boundaries” of Croatian tourism in the past 2-3 years.

A Major Match in Times of Turbulence

“The very fact that we have reached this phase requires us to jointly consider in this format what we can do to continue the growth of Croatian tourism and to keep our tourist traffic dynamic and expanding as it has been in the past 10 years,” Plenković stated.

In the context of the crisis in the Middle East, he mentioned the global rise in airfare prices, presenting data from the European Travel Commission that more than 60 percent of tourism companies are experiencing a 20 percent drop in demand.

There is a certain redirection of demand – from destinations closer to conflict towards Europe, and this is an opportunity to attract some tourists to Croatia, he said.

However, he emphasized that price and quality competitiveness is important, and it should be kept in mind that other Mediterranean countries do not become “quicker” and redirect traffic to their markets. “A major match has arisen in times of turbulence in the market,” Plenković stated.

He asserted that state measures in the recent period have been “very beneficial” to the tourism sector, emphasizing the desire for as many Croatian citizens as possible to be able to “experience the benefits of Croatian tourism.” Among other things, he stated that Croatia is largely a self-destination, in this context mentioning government interventions in fuel prices.

Glavina: Margins are Decreasing in Competitive Markets

Minister of Tourism and Sports Tonči Glavina stated that in the context of geopolitical instability, it is important for Croatia to remain perceived as a safe tourist destination. Amid all the changes in the market, Glavina also emphasized strong investments in the promotion of Croatian destinations, as well as investments in a more even development of tourism.

He also stated that this tourist year, price competitiveness will play a crucial role. “Croatian tourism has grown strongly, but we are entering a phase where the market clearly sets certain boundaries and where such growth is no longer sustainable and realistic,” he stated.

He said that all research shows that guests today choose holiday destinations primarily based on the ratio of price and quality.

He asserted that actors in Croatia’s competitive markets are reacting in this situation by “reducing margins throughout the entire value chain.” “This is a practice we must start applying ourselves if we want to remain competitive,” Glavina stated.