Just last year, over a thousand apartments entered the rental market.
She has rented her apartment to tourists for four years. But, this is the first time there she did not have a single reservation for the month of February. Therefore, Branka Jušinski is thinking about closing her apartment at the Sloboština neighbourhood, although until last year she did not experience any problems with attracting guests, reports Večernji List on February 19, 2018.
When she was starting, she thought that the proximity of the airport and the direct bus line to the main station would bring in a steady flow of guests. And she was not wrong. Until now.
Branka is one of 2,976 private accommodation rental owners registered with the Zagreb Tourist Board. But, just like many of her peers, she is affected by recent changes in the market. According to the Zagreb Tourist Board, 2017 was a record year in terms of the number of new private accommodation facilities being introduced to the market – the number of apartments has grown by as much as 38 percent compared to 2016.
In other words, out of almost 3,000 rental apartments, 1,090 came to the market last year. “That is about 91 apartments a month, or 4.32 accommodation units every day. The highest number of new rentals was recorded in November, July and June,” according to the Tourist Board. At the same time, 273 apartments left the market.
The increase in the number of accommodation units resulted in more arrivals and overnight stays, by as much as 40% according to the official figures – although rental owners say that they have actually witnessed a decrease in the number of guests, especially in winter months, with the exception of the Advent festival in December and early January.
“Competition has become too fierce. You either have to lower the prices or fight for guests in some other way. Zagreb has more rental apartments than London which, according to the information from Booking.com, has just 1,300 rental apartment, while Brussels has 900 of them,” says Jušinski.
Davor Mauser, who offers a rental apartment at the Vrbik neighbourhood, says that many owners have already started to lower their prices – he now charges 50 euro a night, while last year he asked for 70 euro. Many owners are therefore returning to long-term rentals, and prefer to rent their apartments to permanent tenants rather than tourists.
“Some people earn more than way. Working with tourists means cleaning the apartment and changing linen twice a week. Short-term rentals to tourists require a lot more effort than a long-term rental to tenants,” says Mauser, adding that the profit from tourists and tenants is currently about the same, while not long ago short-term rentals were two to three times more profitable.
Bruno Babić, the owner of an apartment at Gajeva Street, explains that the reason for such a sharp rise in the number of rental apartment is the fact that it is seen as a low-risk investment, since most apartments are opened by those who already own the flats and think they can easily enter the tourism business and increase their earnings.
“In a few years, after the prices fall below the level of profitability, just the most skilful owners will remain in the business. This sudden expansion will not last,” says Babić. He adds that, five years ago, when he started his rental business, there were less than 500 rentals in the city.
Translated from Večernji List (reported by Petra Balija).
