Croatia`s travel and tourism industry started to develop in the early 1960s and, for the next 25 years or so, the country became an…
Croatia`s travel and tourism industry started to develop in the early 1960s and, for the next 25 years or so, the country became an increasingly important player in the Mediterranean sun & beach market. By the 1980s, Croatia was an established holiday destination, representing serious competition for the Mediterranean leaders such as Spain, Italy, France and Greece. The primary reasons for its success were its natural geographic attractions – notably its beautiful coastline and unspoilt, natural environment – the warmth and friendliness of the local people, and the fact that it offered excellent value for money.
In the mid-1980s, the growth in demand for Croatia`s tourism product nonetheless started to slow as a result of the country`s inability to adapt to changing shifts in the marketplace. While competing destinations began to adjust their products and services to meet the increasingly sophisticated and quality-conscious European tourists, the ability of the Croatian tourism industry to keep up with the rapid changes in demand was severely hampered by the Socialist system governing the country at that time.
During the 1990s, Croatia suffered the devastating impact of political instability and war on travel and tourism demand, as well as on the destination`s tourism infrastructure and supply. Rebuilding Croatia`s tourism industry since the end of the war has not been easy – and the country is still a long way from realising its tourism potential. Most importantly, perhaps, as a result of its inadequate infrastructure, it has rapidly regained the image of a destination primarily targeting the lower end of the holiday market. Yet for independent travellers – especially those staying in hotels – it is actually quite expensive in comparison with some other Mediterranean destinations.
Nevertheless, there are a number of positive signs auguring well for the future of Croatia`s tourism industry. The Croatian government recognizes the potential of travel and tourism to contribute to the country`s economic revival, as well as encouraging social and cultural cohesion within the country, and it has taken steps to implement measures to facilitate growth.
There is still a lot to be done, but recovery is now well on track – at least in terms of numbers` growth.
Preliminary estimates point to a 6 per cent increase in total tourist arrivals in 2002, to 8.3 million, following a 19 per cent growth the previous year. International business was reportedly stronger in terms of growth than the domestic market with several markets, including the UK, recording a second year of double-digit growth. This means that arrivals ended 2002 at 86 per cent of Croatia`s 1989 peak.
Overnight volume has not risen as sharply, but growth has been well above the world and Mediterranean averages for the last few years. Total overnights rose by an estimated 3 per cent in 2002 and by 13 per cent in 2001, but are still at only 72 per cent of their peak.
The slower growth in overnight volume is the result of a declining average length of stay, itself due to a trend towards shorter summer holidays – one week instead of two – but also to an increase in short breaks.
With Turkey and Bulgaria, Croatia was one of the best performing destinations, in terms of percentage growth, in the European summer holiday market last year. And its current level of growth is expected to be sustained during 2003. The events of 11 September 2001, uncertainty in the Middle East, and a slow economic recovery have led to increased price sensitivity among many of Europe`s key source markets, notably Germany. This has boosted demand for the eastern Mediterranean.
The challenge now is to create ands promote new competitive advantages – in addition to its price attraction for package tourists – so that it further diversifies its markets and improves visitor expenditure and yield. One major project is to overhaul and sell up to 14 Adriatic hotels by the end of this year. The aim is to restructure and sell the hotels to strategic investors, leading tour operators and hoteliers, according to Hrvoje Vojkovic, Head of the State Privatisation Fund. A memorandum of understanding on the project has been signed with the European Bank for Reconstruction and Development (EBRD) and German investment agency DEG. Under the plan, EBRD and DEG are to become shareholders in the hotels and provide loans for their overhaul, including a non-core asset strip before they are offered for sale.
In addition, Pave Ruskovic, Croatia`s Minister of Tourism, has just launched Croatia`s first Tourism Satellite Account (TSA), which was developed by the World Travel & Tourism Council and its research partner, Oxford Economic Forecasting (OEF). Croatia`s recent travel and tourism growth confirms that it is well on track to recapture the demand levels it enjoyed prior to the outbreak of war in 1990, the report says, although yield will take more time to recover. Major political and economic reforms, which have promoted stability and open markets, have contributed to stimulating growth in the short term, says WTTC/OEF. Croatia now needs to adopt a cohesive, longterm strategy for sustainable development, to ensure it attracts the right kind of tourism in future with benefits for all stakeholders.
In 2003, travel and tourism is expected to contribute 22.4 per cent of Croatia`s GDP and account for 294,000 jobs, representing 27.4 per cent of total employment. These impressive shares show clearly that the Croatian economy is already highly travel & Tourism intensive. Current forecasts suggest that, if certain key factors are assured, Croatia will continue to record above average growth levels over the next ten years. However, this depends on the Croatian Government recognising and supporting travel and tourism as one of Croatia`s highest-priority industries and employers, factoring it in to all policies and decision-making.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
