ZAGREB, March 31, 2020 - Esplanade Zagreb Hotel, one of the oldest hotels in Zagreb, is closed due to extensive damage caused by the March 22 earthquake, exacerbating the difficult situation concerning the coronavirus, which has been adversely affecting business since January, the hotel's managing director has told Hina.

"In the earthquake, the hotel suffered extensive damage, on the facade, on the floors, in public spaces, and in many rooms. Therefore, it's with a heavy heart that I decided to close Esplanade for the foreseeable future, as a precaution," revealed Ivica Max Krizmanić. He added that the last few guests had been evacuated and put up in other hotels in Zagreb, and that the staff, apart from a few who are taking care of the hotel, had been sent home.

Krizmanić added that a detailed inspection conducted by structural engineers established that the building was structurally sound due to the fact that the hotel was built as an exceptionally stabled, high-quality, and massive luxury building back in 1925.

However, Krizmanić noted that it would take a lot of time and money to repair the damage. The managing director remarked that the last large renovation took place 16 years ago, and that the biggest challenge in the renovation after the earthquake would be finding wallpaper, tiles, lamps, and decorations identical to the unique ones that were damaged in the earthquake.

When asked about the way they were coping with the coronavirus crisis, Krizmanić stated that they had closely followed developments since the epidemic broke out in China, the rest of the world, and in the region. Since the epidemic reached Croatia, they kept implementing stricter measures, from cleaning and disinfecting the hotel's public spaces and areas and implementing obligatory hand disinfection for guests and staff, to procuring masks, thermometers, disinfectants, and increasing caution in preparing and serving food, complying with mandatory distance, allowing work from home, etc.

"Esplanade is famous for its high standards and first-rate service in every segment of its business, which is confirmed by numerous certificates and strict standards for staff, and our guests felt safe the whole time. However, due to the earthquake, we had to close," Krizmanić said.

He emphasised that the hotel registered business disruptions as early as January, when the epidemic broke out in China, and that it was obvious even then that 2020 would be a very hard year for tourism.

More news about hotels can be found in the Travel section.

March 16, 2020 - A look at how Croatian hotels are handling the coronavirus crisis in the country.

HRTurizam writes that there is no doubt that the coronavirus pandemic is affecting the tourism sector most. The borders are closed, all events are canceled, there is a ban on gatherings over 100 people, schools, colleges and kindergartens are closed, and the recommendation is not to travel, or to keep people in self-isolation. 

Everyone in the tourist chain is under attack, from travel agencies and renters to hotels, many of which have had to close their facilities temporarily. As we can see from the reports on the Zagreb Stock Exchange, hotels are registering cancellations of bookings and various gatherings in March, April and May, and a fall in stock prices. Still, so far, there are no significant cancellations from June onwards, which is good news.

Although the current annual reservation status is better than last year, Valamar Riviera reports that the number of new bookings has slowed significantly since the coronavirus escalated. The current cancellations of bookings recorded primarily relate to the period from March to May this year and only to a lesser extent to the rest of the main season, which accounts for over 85% of annual operating revenues, says the Zagreb Stock Exchange.

Hotel Medora Auri 4* started operating on February 4, 2020, but will be closed from March 14 to March 30, 2020, respectively, subject to harsh travel conditions from the major markets, until the above circumstances change. Other facilities at Medora hotels and resorts do not anticipate a change in the schedule of operational work.

According to Maistra and Adris Group, business operations were in line with expectations by early March, but after adopting emergency measures and recommendations in the Republic of Croatia and other neighboring countries, cancellations of bookings for accommodation and meetings for March, April and May 2020 began, mainly in the MICE segment. There are currently no significant cancellations for reservations from June onwards.

Liburnia Riviera Hotels say the coronavirus has a negative impact in terms of reservation cancellations and reduced capacity occupancy. According to current data, 19% of total confirmed bookings were canceled in February, 64% in March and 62% in April. Cancellations in May and June are slightly lower at 31% and 21% respectively. Liburnia Riviera hotels say that the continued duration of the disease will continue to affect their business adversely, and its effects will depend on the length of its exposure in Croatia and the countries of origin of its clients.

The Imperial Riviera said that the current state of bookings is at the level of last year, but the entry of new bookings has slowed significantly. Cancellations are mainly for April and May.

Plava Laguna states that from the end of February, the Company recorded cancellations in the amount of 25% for March and April, while there are no cancellations in the high season periods.

Given the current situation at Maestral Hotels, it is estimated that the opening of the hotel for this tourist season will not be achieved at the planned pace, and only one hotel is currently open. Bookings from focal states for group arrangements for March and April were canceled, and new bookings for the rest of the year slowed down by 50% compared to last year.

A large number of canceled reservations in the preseason and early summer season are also recorded in Vodice Hotels, which is why the official opening has moved towards the middle of April.

According to the first indicators, Jadran Hotels expected a successful tourist year, but in the last two weeks, numerous reservations for April and May were canceled, and sales for the rest of the season were stopped. Furthermore, the inflow of funds was halted by agencies seeking price reductions and more flexible cancellation and deposit terms.

Palace Hotel Zagreb reports that after adopting extraordinary measures and recommendations, cancellations of reservations and meetings for March, April and May 2020 began.

FTB Tourism plans to open their hotels in Cavtat on April 1 and 19, however, they cannot say for sure given the slow entry of new bookings and the cancellation of existing bookings. The high risk to the business, they say, is undoubtedly the legal restrictions on the movement of citizens of certain countries, especially the main markets, Great Britain and France.

At a meeting of the Presidents of the Board of Directors of the members of the Croatian Tourism Association, the leading hotel companies decided to suspend the operation of most hotels for two weeks. HUT points out that in each coastal destination, one hotel accommodation will be provided, while several hotels will be provided in Zagreb.

As the main tourist season brings more than 85 percent of the annual operating income to hotels, as well as to everyone, we hope that the whole situation will settle down as soon as possible and that the tourism sector can still count on turnover in the main tourist season. It is difficult to predict how much this situation will affect travel in general, i.e., how long it will take to activate the tourism market. 

Follow the latest coronavirus updates on the dedicated TCN section. 

“Hot price! Discounts up to 35 per cent! Last minute - 10 per cent discount.” These are the main messages on websites of Croatian hotels in recent days. Many of them offer discounts and last-minute deals with the reduction of prices between 10 and 35 per cent not just for the preseason period, but for the main season as well, reports Jutarnji List on May 20, 2019.

The largest hotel providers – Valamar Riviera, Plava Laguna, Liburnia Riviera, Bluesun – have all offered special prices as early as May, while last year they did it only at the start of the main season in late June, when it became clear that the years of double-digit tourism growth are behind us.

The hotel companies did not want to comment on the situation with this year’s booking, but sources from the tourism industry say there is no reason to panic since hotels are actually demonstrating that they know how to manage their revenues.

“It is wrong to compare this year’s price policy with last year’s because the situation is significantly different. I believe that most hotel owners constantly follow booking trends because that is the only way to define the right price at the right time. They are helped by the technology that enables day-to-day tracking of competitors’ prices. Depending on booking trends, they can manage prices through sales channels,” said consultant Sanja Čižmar.

However, lowering prices is contrary to the messages sent by tourism minister Gari Cappelli from the largest tourism fair in Berlin in March. At the time, he said that hotel companies should not listen to tour operators which demanded significantly lower prices, with the excuse that this is the only way to compete against aggressive Turkish hoteliers, whose accommodation prices are far below the average European rates.

One well-informed source from the tourism sector says that the average price per person on the Adriatic is 61 euro per day, while in Turkey it is 51 euro. The lowest average price can be found in Tunisia (38 euro).

“It can be said that this price reduction has come too late, especially since our competition reduced the prices a lot earlier,” said the source. “Early booking failed this year because a large number of travellers who booked their holidays early last year felt cheated. They paid for their rooms at the beginning of the year, but then hoteliers abruptly lowered their prices in June due to poor booking. They are therefore more cautious with early bookings this year, aware that waiting can save them money.”

Sanja Čižmar agrees that the main battle will be fought for the main season, the two summer months when prices are highest. Still, hotels which have invested and modernized their offer should not have any problems. “Experience shows that the best hotels are the ones which fill their capacity first, and they generally have the highest occupancy rates,” said Čižmar.

Translated from Jutarnji List (reported by Dora Koretić).

More tourism news can be found in the Travel section.

ZAGREB, January 24, 2019 - The government on Wednesday decided to choose the Marea Alta company as the most favourable buyer for the Hotel Hrvatska (Hotel Croatia) in the southern coastal town of Baška Voda, which offered 46.13 million kuna for the hotel which after the sale will be remodelled and recategorised into a four-star hotel, according to State Assets Minister Goran Marić.

Marić recalled that on May 12, 2018, his ministry published a tender for the sale of Hotel Hrvatska with a starting price of 42.3 million kuna and that not a single offer had been submitted. The government then reduced the price to 35.9 million kuna and published a new tender on 26 September.

Three offers were submitted following the new tender and Marea Alta submitted the most favourable offer.

Hotel Hrvatska is currently a two-star hotel and was not in use last year. It is a beachfront facility formerly used as a military barracks. The 136-unit hotel is located in downtown Baška Voda. "Following the sale, the hotel will be remodelled and recategorised as a four-star facility," Marić said.

Prime Minister Andrej Plenković and Tourism Minister said this would help raise the quality of tourism in Baška Voda.

The State Assets Ministry and the buyer will sign a contract under which the buyer will be obliged to pay the said price within 30 days, minus 1.79 million kuna that was paid into the state budget during the public tender procedure.

More news on the hotels in Croatia can be found in the Travel section.

ZAGREB, November 30, 2018 - The government on Friday decided to sell its share in a former army singles dormitory – Hotel Iž – in Zadar, for 11.47 million kuna, and issued a government guarantee for the Split-based Jadroplov shipping company for a loan in its restructuring process

The call for bids for the state's share in the 4,399-square-metre-large Hotel Iž, at a starting price of 6.6 million kuna was advertised early August.

Four bids were submitted and a recommendation has been made for the government to accept the most favourable bid submitted by the Zadar-based "Hostel For You" company of 11.47 million kuna, state-secretary in the State Assets Ministry, Tomislav Boban, said.

The government endorsed amended conditions for a loan of 720.9 million kuna taken from the Croatian Bank for Development and Reconstruction (HBOR) by the Hrvatske Ceste road authority and that was guaranteed by the government.

According to Minister of the Sea, Transport and Infrastructure Oleg Butković, the amended conditions mean reducing the interest rate of 4% to a fixed annual rate of 2.5% and the extension of the grace period from 31 March 2019 to 31 March 2022.

The government further endorsed a state guarantee to the Jadroplov company for a loan from the Hannover-based Norddeutsche Landesbank Girozentrale, as foreseen in its Restructuring Plan for 2015 - 2019.

State-Secretary in the Finance Minister Zdravko Zrinušić explained that the financial collateral provided by the state was a constituent part of the restructuring plan that was approved by the European Commission.

For more on the hotels in Croatia, click here.

The state has decided to discontinue talks with the Pula hotel group Arena Hospitality Group, the former Arenaturist, about the sale of Riviera Hotel in Pula city center, reports Jutarnji List on November 26, 2018.

The Riviera Hotel in Pula is located in a beautiful old Austro-Hungarian building from early 20th century and was run for years by the largest Pula hotel company. The hotel, as it does every year, closed in mid-October, but the question is whether it will open its doors ahead of the next tourist season. For a very long time, nothing has been invested in the hotel precisely because of unresolved ownership issues, so the luxury facility is officially categorized as just a guest house.

According to Minister of State Property Goran Marić, his ministry has not managed to come to an agreement with the hotel group. “Unfortunately, we have failed to agree. The State Property Act explicitly defines how to deal with such property. Unfortunately, the Arenaturist administration has approached the process as negotiations, and the State Property Ministry is unable to negotiate. They do not understand that there can be no agreement based on business negotiations. We do not have the possibility to negotiate, and they do not understand it or do not want to understand it,” Marić said.

Therefore, his ministry has filed a request with the State Attorney's Office for the collection of all receivables that did not pass the statute of limitations for the use of the hotel and for its return to the state.

“When the State Attorney's Office solves this on behalf of the state, we will announce a public tender for sale, and they can apply,” Marić explained. He could not say when that would happen.

“I can estimate something that is not within the competence of the State Property Ministry. When the actions of the State Attorney's Office and courts will be done, the answer to this is never known in Croatia,” Marić pointed out honestly.

Apparently, the Riviera Hotel in Pula was being sold for about 30 million kuna, and the Arena Hospitality Group had big plans for it and wanted to resolve the ownership issues for a long time. The company did not want to comment on the latest turn of events.

For more on the Croatian hotels, click here.

Translated from Jutarnji List (repoted by Barbara Ban).

The hotel investment conference Adria Hotel Forum (AHF) is leaving Zagreb, and its seventh edition will be held at Hotel Crown Plaza in Belgrade in late February next year. The reason for the move is the investment climate in Croatia, reports Poslovni.hr on November 23, 2018.

Although organizer Marina Franolić tried to explain that the move actually fits in with the regional character of the conference, sources say that the major factor in the decision to leave Zagreb was the inactive investment climate in Croatia, with low interest for foreign investors and hotel brands. The atmosphere in Belgrade is very different, said the entrepreneur who launched the AHF to revive the market and bring leading global tourism investors to Zagreb.

“The relocation news was positively accepted by forum partners, such as global hotel companies, consultants and investors, who have confirmed their arrival, as well as local hotels who have been fully supporting us. Croatia has not been able to capitalize on the fact that the AHF was held for six consecutive years in Zagreb. We can still see that investment activities, especially those related to foreign direct investments, are very low. That is not the main reason for the relocation of the conference, but it certainly influenced our decision. People are asking us daily about investment opportunities in Croatia, and we have nothing or little to offer,” explained Franolić.

The AHF is the only hotel-investment conference of international character in the region and one of the five largest in Europe. Franolić added that the conference gathered more than 1,800 participants, 250 panelists and 150 partners in six years, and its importance was demonstrated by the arrival of some of the most important players in the global hotel industry who came to the conference. Last year, they brought to Zagreb investment funds which manage assets worth over 500 billion dollars, as well as high-ranking representatives of AccorHotels, Hilton and other companies.

Belgrade was not selected by accident as the new conference seat. Although Croatian tourism is considered more developed than the one in Serbia, in the corporate and public sector, apart from the fact that Serbia has significant growth in the number of foreign tourists, Belgrade has been attracting foreign investors and global brands more successfully than Croatia. In addition to the Holiday Inn, the Hyatt Regency, the IHG Crown Plaza and the Falkensteiner Hotel, Hilton and Accor's Mama Shelter were opened this spring, while in 2020 it is expected that Hilton’s DoubleTree and Marriott' St. Regis brands will also open their hotels.

For more on investments in Croatia, click here.

Translated from Poslovni.hr (reported by Marija Crnjak).

Croatia’s State Property Ministry has announced a tender for the lease of 15 tourist resorts on the Adriatic coast which were used by companies from Bosnia and Herzegovina and Serbia during the former Yugoslavia. Now, 27 years after the collapse of Yugoslavia, the ownership issues have not yet been resolved and they are still registered as “people’s assets,” reports Jutarnji List on November 11, 2018.

Most of the tourist properties offered for lease are located in Gradac, a town near Makarska, where the former Bosnian-Herzegovinian resorts have been falling apart for decades, becoming a health hazard for both locals and tourists.

The State Property Ministry has now finally decided to solve this problem based on the new State Property Management Act. According to Article 71, “until the conclusion of an international agreement or the adoption of a special decision, the Ministry shall be authorized to offer for a multi-year lease, up to a maximum of 30 years, properties entered into land registers as owned by the Republic of Croatia or as people’s assets.”

The tender was announced according to the provisions of this law. The lease agreements with the best bidders will be concluded for the period of 30 years, and facilities must become operational and used for tourist purposes within three years. In the event that the real owner of the property is legally established during the period of 30 years, the new owner will start receiving the lease payments.

In Gradac, the list includes the former Trgovci facility (1,540 square metres, starting price 30,800 kuna a year), the Bosanka Villa (1,431 square meters, 28,620 kuna), and the Saobraćajci facility (3,500 square metres, 71,340 kuna). All these facilities are located right next to the sea and the resorts were used by the workers of the Railways of Bosnia and Herzegovina.

Just 30 metres from the sea is a former tourist resort of the Union of Construction Workers of Bosnia and Herzegovina, with an area of 3,793 square metres and starting price of 75,840 kuna a year, as well as two other facilities, H2O and Mostar.

Workers of the Bosnian Electric Company used to holiday in Valter Perić. Just 20 metres from the sea is the Đuro Salaj hotel on five floors. The hotel covers 6,351 square metres and the starting rent is 127,020 kuna a year. HIT Podaca is a 1,140 square-metre building just six metres from the sea. The starting annual price is 22,800 kuna.

The Bosnian Privatisation Agency has been trying to sell the Đuro Salaj and Valter Perić facilities for years, although the legal ownership issues have not been resolved. The value of Đuro Salaj is estimated at 4.2 million euro.

In Gradac, there is also a former resort of the Robna Kuća Beograd from Serbia, with an area of 3,292 square meters and the starting price of 65,840 kuna a year.

Serbian companies and towns also owned tourist resorts for their workers in Slano, Rab and Biograd. The highest lease is expected for the former Partizan holiday resort in downtown Biograd, which covers 9,314 square meters. The starting price is 186,280 kuna a year. For the former 6,859 square-metre children's resort of the Belgrade’s Vračar municipality, the bidders will have to offer at least 137,180 kuna a year.

Although the tender is certain to draw protests from the neighbouring countries, the State Property Ministry says that Croatia is a sovereign state and that the State Property Management Act was coordinated with the State Attorney's Office.

“We are solving the problem that nobody wanted to face all these years. These are facilities whose owners have not been established, and the users were from Bosnia and Herzegovina and Serbia. On the other hand, our neighbours have sold our property, and we are just putting it into operation because the properties as they are now are threatening the health and safety of locals and tourists,” says the State Property Ministry.

"I am exceptionally happy because I think this is the only possible solution at the moment. Although we constantly hear allegations from Bosnia and Herzegovina that their assets are being stolen, the facilities have been falling apart all these years and they are now dangerous for citizens,” said Gradac Mayor Matko Burić (SDP).

For more on Makarska and surrounding areas, click here.

Translated from Jutarnji List (reported by Goran Penić).

ZAGREB, November 8, 2018 - The Restructuring and Sale Centre (CERP) steering board has accepted the binding offer of the Zagreb-based PND Strategija company for the purchase of a 68.94% stake in the Dubrovnik-based Hotels Maestral company at the price of 153.5 million kuna, which is 26.7 million more than the asking price, according to a press release issued on the Zagreb Stock Exchange (ZSE) on Thursday.

The short press release reads that the CERP steering board made this decision two days ago, on 6 November.

The CERP received three binding offers, and apart from PND Strategija, also bidding for Hoteli Maestral were the Czech companies J&T IB Capital Markets and Eco Investment, which offered 145.9 million kuna and 141.07 million kuna respectively.

In August, CERP issued a public call for binding offers for the purchase of 355,520 shares (68.94 percent) in Hoteli Maestral at a starting price of 126.8 million kuna. It said then that the main factor in selecting the most favourable offer would be the value of the bid.

Hoteli Maestral is Croatia's last large hotel company majority-owned by the state. Last year, it operated at a profit for the fifth year in a row, generating a net profit of 4.1 million kuna, 7% up from 2016.

The company includes five hotels – Uvala, Splendid, Komodor, Vis and Adriatic – as well as the Adriatic Rooms pavilion, with 473 rooms and 933 beds on aggregate.

In the first nine months of this year, Hoteli Maestral's profit was 11.58 million kuna, 3% down from the corresponding period of last year.

Ministry says tender for sale of Maestral hotel company equal for all bidders

Responding to media reports that Czech Ambassador Vladimir Zavazal wrote to state institutions to warn that Croatian bidders were being favoured, the State Assets Ministry said recently that the tender for the state's stake in the Hoteli Maestral company was equal for all bidders.

A few weeks ago the ministry was asked by Hina if it had received Zavazal's letter in which he expressed suspicion that Czech investors would be short-changed in relation to Croatian companies and said that one Croatian bidder had submitted incomplete documentation.

According to the media, Zavazal says in the letter that when the offers were opened, one Czech bidder found that PND Strategija failed to submit financial statements for 2016 and 2017 but the State Assets Ministry declared its offer complete and valid.

For more articles about hotels in Croatia, click here.

According to unofficial information, the Maraska Hotel in Zadar will be the first new investment of the Dogus Group in Croatia after the company completes the restructuring process which has started in Turkey, but it is still uncertain whether their partner will be the famous Hyatt hotel brand as previously announced or will investors eventually have to look for an alternative, reports Jutarnji List on November 1, 2018.

The hotel operator decided to enter the Maraska hotel project due to the fact that the Turkish investor planned to complete it with the purchase of a marina. However, as the four-year bidding process for the marina is not coming to an end, it is likely that the Dogus Group will have to inform Hyatt about changes to the plans.

“There are few people in Dogus who believe that the marina will be sold to them, although the Turkish offer was the highest. However, even if there is no marina, the company will proceed with the construction of the hotel after the restructuring is over. It seems likely that the entire project will have to be changed somewhat, so it is now necessary to see whether Hyatt will agree to another version of the concept,” say sources close to the investors who still believe that the hotel operator will accept a slightly modified project.

All permits to start construction works on Maraska have been prepared, but the group has decided there would be no significant investments until the restructuring of the company in Turkey is completed. Dogus Group is negotiating with banks on repayment terms for loans that are mostly contracted in foreign currencies. If the negotiations are concluded by the end of the year as expected, the first official information on plans for Croatia will be announced at the time. Speculation which has emerged in the media over the past few weeks – that Dogus is selling property in Croatia – has been officially denied.

How will the restructuring of the group in Turkey affect its business in Croatia will also depend on the conditions which banks will impose on Dogus. The company has invested 250 million kuna in Croatia since 2009 and employs 350 workers. It owns D-Marin Mandalina in Šibenik, D-Marin Dalmacija in Sukošan, and D-Marin Borik in Zadar. The company's portfolio also includes the D-Resort hotel in Šibenik and the exclusive boutique hotel Villa Dubrovnik. The hotel operations were supposed to be expanded with the Maraska hotel in Zadar, which was initially expected to open its doors in summer 2019.

Contracts with constriction companies were ready to be signed, but since the decision about the marina was delayed, the works have not yet started. The most likely new deadline for the opening of the Maraska hotel is now summer 2021.

Additionally, Dogus Group started the reconstruction of the Borik marina in mid-January, an investment totalling two million euro.

For more news about investments of Dogus Group in Croatia, click here.