"We need 15 000 more berths, better infrastructure and lower berth prices."
In part two of TCN's interview with Tourism Minister Darko Lorencin, Danni Matijaca asks about nautical tourism.
(Photo credit: Ministry of Tourism)
Everybody’s talking about family tourism, adventure tourism, cultural tourism and now medical tourism. But one segment never seems to get the spotlight even though we have 1244 islands and a coastline ideal for – nautical tourism. And who better to ask about this than our Minister of Tourism, Darko Lorencin.
It seems that nautical tourism has always been pushed aside, there’s no clear development strategy, and it seems every government has treated it like a side-effect of all other forms of tourism. What is its share in tourism results, how important is this segment and what can we do to make it better?
When we talk about nautical tourism, in physical generated traffic it makes up 3-4% of our tourism results, however, when we talk about revenues then that percentage goes up significantly, to 10-11%. Nautical tourism is not only important because of the material results it achieves, in a nautical country such as ours, with such a long standing tradition, it is an integral part of our image. According to all our recent studies, we are lacking about 15 000 new berths, but they would have to be very wisely set up offering high class products. Out of those 15 000 berths, 10 000 are in the sea and 5 000 on dry land. Development of nautical tourism has its logical development stages and if we analyse the basic data, then we can see that the average size of vessels in Croatia is increasing so existing marinas that were built 20 odd years ago really do have to be transformed, they have to offer larger berths.
When we talk about our marinas, one more thing is clearly visible - they mostly offer berths as their basic service while all other auxiliary services are outsourced. This doesn’t seem feasible or reasonable for that matter, and as a result, we have berth prices that are in some instances higher than in Monaco! Are there any signs that this pattern will soon change?
You are right. The results of our analyses show that the revenue structure in our marinas is the exact opposite of what you see in highly developed nautical destinations around the globe. Almost 70% of revenue in marinas in Croatia comes from berths while only 30 % comes from other services, whether we are talking about repairs, F&B outlets or anything similar. Every successful nautical country in the world shows the opposite – 70% of revenue comes from auxiliary services and 30% from berths. What I can notice and what we have started talking about is the fact that our prices have hit the ceiling without actually justifying the price with product quality. Furthermore, our marinas, in most cases, are not following the trends in nautical tourism. There is a lot of room for improvement, especially when it comes to repairs and services in marinas. New marinas are opening, and as of this year we have the very first marina with 5 anchors / equivalent of 5 stars (Turkish investors Dogus Group) and I think marinas like this one will help us turn a new page in our nautical tourism.
You said that our marinas are simply not following the trends and they rely too much on berth revenues. Given that the State owns our largest chain of marinas – ACI, can you tell us what is the situation within that particular company, will it be restructured and most importantly, will the currently outsourced services be returned to ACI?
An enormous job was done within ACI. The company needed complete restructuring and first of all we had to clean it up from the inside starting from concessions that did not exist for some marinas that have been operational for decades, assets that were never recorded anywhere… We also had a burning problem of services being outsourced even though they used to generate significant revenues while they were managed by the company which significantly weakened the company. Now, after 22 years, ACI is finalizing its first new marina in Slano and I think this indicates the seriousness of the new management team. As the President of the Supervisory Board of ACI I am very pleased with the way this company is now functioning, I am just very sorry it took this long to steer it in the right direction. This is now a company that has recorded significantly higher revenues in the first 6 months of this year than in the same period in 2014 and that has finally consolidated all the results from the last 7 years that were incorrectly reported. ACI is now clearly basing its future on the improvement of existing auxiliary services and introduction of new ones and it is catching up with the global trends in terms of new infrastructure. It is crucial that services are returned under marina management because if all you are offering is high berth prices, you are turning away clients and they won’t use any of the services you provide. If we keep the berth prices at an acceptable level they become the tool with which you are able to control your own competitiveness and all auxiliary services can be used to successfully round up the product.
