As Lea Balenovic/Iva Grubisa/Novac writes on the 17th of April, 2019, Croatian tourism's current business model is unsustainable and has some serious challenges, according to Emanuel Tutek, a partner at the Horwath HTL consulting house, who stated this at the very beginning of a conference on the challenges of the Croatian tourism sector at Edward Bernays High School, the co-organiser of which was Jutarnji list.

Since 19 percent of Croatian GDP comes either directly or indirectly from tourism, the unsustainability of the system is a more serious issue, he added.

''First of all, our tourism is an extremely seasonal sector and as much as 86 percent of all tourism activities in Croatia take place during the summer months. It's also problematic that 96 per cent of these activities are realised on the coast and in Zagreb. In translation, this means that we have plenty of room for progress and the development of our tourist offer across the rest of Croatia, as well as the extension of the season. We are well below the European average. For example, if we compare just the peak of the tourist season, ie July and August, there is 10 to 20 times more of a burden on the area and the residents in Croatia than there is in other European countries. Just remember how some of the destinations and beaches look in July or August,'' warned Tutek.

He also added that Croatia has plenty of room for progress and development in the quality of the accommodation it provides. The Croatian hotels that, as Tutek says, are the pearl of Croatia's hospitality, are very much losing the battle with the hotel industry in the rest of Europe, and the alarm that should be enough to wake the country up is also the fact that the revenue made from tourists' overnight stays in Croatia is less every year.

In addition to this, Croatian tourism is feeling the country's ongoing demographic crisis bite hard, and has a human resource problem as a consequence. This is, as was explained by Tutek, actually a global problem. However, since the international labour market is far more competitive than the Croatian one is, foreign countries are filling their gaps with Croatian workers. Croatia is, unfortunately, at an unimpressive 100 of 138 countries in the world according to the labour market competitiveness index. An even more concerning piece of information shared by the Horwath HTL consultant was that Croatia is the last and second to last in the world on the ladder of attracting and retaining workers.

''We have no solution. The answers to this can't just be some lump sums and other initiatives, we need something more fundamental,'' he warned. One of the negative factors in each case is the uncompetitive average salary. In nearby Austria, for example, in the hotel sector, wages are about 122 percent higher. Still, the hotel industry here in Croatia has experienced a great discrepancy in numbers, and they have therefore begun to increase employee salaries for the last two summer seasons, which has been a fruitful decision. With the rise in salaries and expenses, revenue also grew.

In addition to the inadequate management of human resources, huge problems are also created by the Croatian tax policy. Property tax, Tutek said, practically doesn't exist in Croatia. ''We're the champions of how good private landlords have it. Croatia is a tax oasis,'' he claims.

''We want to be competitive, but there are a number of things that we're not even close to, not even in the wider environment. VAT reduction is certainly important, and there is also the question of consistent policies. It is important for us to have a perception of what will happen in the future at some point, but if the policies constantly change then we can't have a stable business,'' said Sanjin Šolić of the Lošinj hotel group Jadranka.

Davor Lukšić, President of the Lukšić Croatia Group, agreed with him, pointing out that Croatia's 25 percent VAT rate is very high, and even with a rate of 13 percent there would still be room for progress. "We have to remain competitive, especially now when other destinations in the Mediterranean are making a come back," Lukšić added.

But if one was to as Croatian Tourism Minister Gari Cappelli, the problem of the high VAT rate is one of the easiest problems to solve in the Croatian tourism industry. The minister claims that the Croatian Government could lower the VAT rate with one decree, bringing it down to 10 or 13 percent, and such a decision is in the government's plans for the beginning of next year.

''We have a problem with having five-star hotels in two star destinations. First of all, we have to start improving the quality of the destination and spend the whole year measuring what's happening and only after a few years will we see whether both residents and tourists are happy, as well as service providers and the environment. If everyone is more or less happy, then it makes sense to invest in a four or five-star hotel,'' stated Minister Cappelli, adding that in Croatia, it often happens that investments are made in luxurious hotels first, but not in the development of the destination in which it is located.

"Well, we have cases where five-star hotels don't have sewage systems but septic tanks," he said. The minister also referred to the initial lecture by Emanuel Tutek about the key challenges facing Croatian tourism. He agreed that there was always room for progress, but he also pointed out that he was tracking the figures daily and that he couldn't bring himself to agree with all the alarming warnings about the unsustainability of Croatian tourism.

''We're a strange people, two years ago there were no tourists and they wanted to get rid of me, now there are a lot of tourists, and they want to get rid of me again, the projections of what's to come in two years keep coming in, and they're already that I'm shaking in my chair,'' said Cappelli, adding that Croatia is spending what it earns and has therefore finally got an investment rating.

''Now the pressure on public finances is being relieved and the taxes on the economy can be reduced slowly,'' he said.

If the Croatian tourism association is asked for their opinion on the matter, this is last chance saloon for this tax relief to actually become a reality. Namely, it is anticipated that hotels could reduce the volume of their investments by as much as thirty percent over the next three to four years. ''We want to warn the government that it must not let that happen. We have to invest, but we expect that the government to create measures to encourage that and not just put us off,'' said Jadranka's Sanjin Šolić.

Dubrovnik has experienced not only growth in terms of tourism but also the improvement of infrastructure in recent years, Lukšić believes. However, despite the wild popularity of this particular southern Croatian city, it has multiple problems during the winter season.

''In the last two years, we have extended the [tourist] season and the so called ''congress season'' has helped a lot. But we all have to sit around the table and design a strategy for the winter season, which is actually the only problem,'' Lukšić said, arousing a grin from Šolić, who, having being on an island, has much bigger problems.

''It's easy for Dubrovnik. Imagine how it is for us to extend the season! You need to get to the island, the bridge is a problem, the bura is a problem, everything is a problem. We're less competitive than our colleagues on the mainland whichever way you turn. The Chinese, the Koreans, whoever comes to Croatia, lands in Zagreb, goes to Plitvice, Split and Dubrovnik, nobody comes to us,'' complained Sanjin Šolić.

That is why his team sat down together at the table and decided to turn to health tourism for which Lošinj has natural resources, a strategy and a future, said Šolić. Another solution for the development of island tourism is golf. Therefore, a location permit is currently being sought for the construction of a golf course with eighteen holes, with which will be a hotel and villa that will have a total of 800 beds.

''These are the two routes we have on Lošinj. People don't play golf in July and August because its too hot. During November, December, January, February and March, the weather is wonderful and we'll fill our capacities that way,'' he noted.

Emanuel Tutek welcomed this discrepancy in Croatia's tourism development strategies at various locations.

''Not all destinations are suffering the same issues. In Dubrovnik, there is a problem with excessive demand, and the quality of the offer needs to be worked on to reduce the number of tourists. In Istria, the offer should be increased. This has, for example, been done in Maistra. Nobody thought it would pay off to build a five-star hotel in Rovinj, but after the construction of the hotel, the rest of the sector was accompanied by the arrival of tourists and the development of the destination.

However, in addition to the respective issues destinations face in Croatia, the eternal problem facing the entire Croatian tourism sector is labour and wages.

''Salaries are a problem, they're still a base for attracting workers,'' said Tutek, agreeing with the CEO of Jadranka, but as he said, it's difficult to increase salaries because there isn't enough revenue.

"When the minister sorts us out with less taxes, I'll give the rest of it in salaries," he stated.

Make sure to follow our dedicated lifestyle and business pages for much more.

Click here for the original article by Lea Balenovic and Iva Grubisa for Novac/Jutarnji

ZAGREB, March 19, 2019 - The Ministry of Tourism will once again co-finance additional medical teams in tourist destinations in the peak season and has earmarked 1.5 million kuna for that purpose, it was said on Tuesday at a ceremony when agreements on co-financing were signed with county representatives of the most prominent tourism destinations.

Of the total of 1.5 million kuna, nearly 456,000 kuna will go to Istria County and 316,000 kuna will help finance additional medical teams in Split-Dalmatia County. Primorje-Gorski Kotar County will receive 270,000 kuna, followed by Zadar County (180,000 kuna), Dubrovnik-Neretva County (125,500 kuna), Šibenik-Knin County (103,000 kuna) and Lika-Senj county (50,300).

"The security aspect is a very important part of tourism as are medical teams...all this is to help make Croatia a safe destination," Tourism Minister Gari Cappelli said, adding that he has insisted for some time now for a solution for a helicopter medical service, particularly for the islands and hopes that a solution will be found by the summer.

He explained that since 2008 to date the ministry had set aside almost 19 million kuna to co-finance medical teams.

"This year we will have 20 teams on the road that will be dispatched at more than 20 locations in the seven counties," the director of Croatia's Institute for Emergency Medicine, Maja Grba-Bujević said.

She said that last year between 1 June and 30 September, medical teams in these counties attended to 168,000 cases which was 58% more than in the first four months of that year.

The most frequent interventions during the summer are related to heart attacks, migraines and dizziness. She added that 564 people were attended to by medical air assistance during the tourism season, 70% of those patients suffered heart attacks.

More news about tourism in Croatia can be found in the Politics section.

Last week’s ITB Berlin tourism fair did not give the Croatian tourist industry what it wanted after a months-long pause in sales to the German tourists. Instead, in the first week of March, they received a worrying number: in four months, from early November 2018 to late February, nine per cent fewer travel packages were sold in Germany for all destinations than in the same period a year ago, reports Večernji List on March 11, 2019.

We can only try to guess what is happening with the significant travelling nation, which each year registers some fifty million travels. Turkey is popular this year, but surely not everyone is going there. Did the slowdown of the German economy make them think twice? Are they planning to stay in Germany, after the perfect summer weather last year?

There are many questions, and there was no optimism after the results of the annual major study Reiseanalyse were published. Researchers have corrected their earlier, more optimistic forecasts about 55 million travels by German citizens in 2019. They have concluded that the number of German tourists this year will be similar to last year's 54.1 million.

They will also spend less on travel than in 2018 when the amount reached 72.7 billion euro. This year, they forecast 71.2 billion euro in tourist spending. On average, Germans will spend 1,017 euro on travels longer than five days, as opposed to last year's 1,045 euro. All this is equally relevant to Mediterranean countries, which are all facing drops, with the exception to Turkey. The state currently has 25 to 30 per cent more bookings than last year.

“Yes, the slowdown in bookings is not just our problem. It is unusual that at this time so many German citizens, who are usually among the first to decide on their holidays, have not yet made that decision. The tension is growing. Spain has already reacted by lowering prices, and I would say that a price war could be expected in the Mediterranean this season. It is a battle which we cannot win, and for us, the key is the ratio between quality and price. Those who have not offered the right value for money will have to consider making price corrections. Although it should not be done overnight, we have another month to see how the situation will develop,” said Boris Žgomba, president of the Association of Travel Agencies at the Croatian Chamber of Commerce, saying that the booking for Croatia is currently weaker by three to ten per cent.

Most Mediterranean tourist countries have also increased their promotion budgets. This was recently done by Croatia as well, which allocated an additional 2.5 million kuna for the German market. Is it enough or should the amount be increased will be monitored during the next ten days.

Tourism Minister Gari Cappelli is convinced that Croatian tourism will welcome 2.9 million guests from Germany in 2019, the same number as last year. He also advised the tourist industry not to lower the prices.

“Croatia has become a competitive destination in the world's tourist market primarily because of the quality it offers to its visitors. This is supported by the fact that so far this year there are 14 per cent more tourist overnights from Germany. That is why we need to work on improving the quality of the tourist offer, whose value will surely be recognised by our guests. Based on the news coming from the largest tourist fairs, I believe that in the current year we will continue to achieve positive results while retaining the image of a quality tourist destination” said Cappelli.

More news about Croatian tourism can be found in the Travel section.

Translated from Večernji List (reported by Radmila Kovačević).

ZAGREB, March 7, 2019 - A slow-down in bookings in early March registered abroad for Croatian destinations does not necessarily mean a weaker tourist season overall but it is a great challenge for the tourism sector that expects some partners to offer discounts for certain periods in the year in order to fill capacities particularly in May and September, according to first assessments coming from the ITB travel trade show in Berlin.

The 53rd ITB opened on Wednesday attracting more than 10,000 exhibitors from over 180 countries including Croatia, which is being promoted by the Croatian National Tourist Board (HTZ) and 20 more exhibitors - tourism companies and tourism boards at one stand.

There are also an additional ten Croatian exhibitors with their own stands including the Atlas and Adriatica.net Group, the City of Zadar and Zadar County, City of Split and Split-Dalmatia County and others. This year the City of Rijeka has its own stand promoting the European Capital of Culture 2020 project.

Southern Europe, where Croatia is located, has been experiencing changing trends in demand due to Turkey's return (on the market), which has recorded a current increase in bookings from Germany by more than 50% compared to the same period last year. However, Croatia, Montenegro and Slovenia are on a good route and due to group tours by Chinese and other tourists from distant markets. It is unclear still what Italy intends to do this year with bookings also decelerating. Due to a dropin bookings for Spain, that country has already announced actions and I believe that because of its uniqueness in the Mediterranean, Croatia will be able to fare well even without any discounts, the head of the European Travel Agents' and Tour Operators' Associations-ECTAA Michel de Blust said, after talks with Croatian exhibitors.

Croatian Tourism Minister Gari Cappelli and HTZ director Kristjan Staničić met with Sven Gorrissen, TUI Germany's manager for Croatia and Austria who told reporters that TUI was not concerned for this season in Croatia adding that he had noticed that this year guests were paying more attention to price.

In the situation when Turkey, Egypt, Tunisia and Greece are strongly approaching the German and other markets with strong marketing and popular prices, it is difficult not to expect Croatia to lower its prices or to offer discounts for certain periods in the year when interest is a little weaker.

We see that for May and September Croatian hotels and other providers need to consider discounts of 10% to 15% if they want to be competitive and be fully occupied, Gorrissen said.

HTZ's director for Germany, Romeo Dragicchio said that bookings for Croatia were better than for other countries and that partners in Germany had not complained about prices and in fact the most expensive accommodations were recording the highest bookings.

He added that tourists from northern Germany were showing an increased interest in Croatia with the introduction of new air routes and that at least ten new routes from Germany would be introduced this year.

More news about Croatian tourism can be found in the Travel section.

ZAGREB, March 4, 2019 - Tourism Minister Gari Cappelli and the director of the Croatian Tourism Board (HTZ) Kristjan Staničić have said before departing to Berlin for the ITB travel trade show that they expect a similar number of German tourists this year, that is about three million, as in 2018.

The ITB Berlin, which takes place in the German capital from 6 to 10 March, brings together over 10,000 exhibitors from 190 countries, including Croatia.

The HTZ stand comprises 23 exhibitors – companies and local HTZ offices – and Staničić has said that the tourist statistical data in the first two months give rise to optimism.

Thus, in January and February, the e-visitor system registered 485,000 tourist arrivals in Croatia, which was 9% more compared to the corresponding period in 2018. The overnight stays rose 4% to 1.3 million.

Although at the global level a rise in the tourist industry is expected, some of the regions have more cautious forecasts ahead of the ITB Berlin show than in the past few years.

Such caution has been prompted by deceleration in bookings for the summer season, notably in Mediterranean destinations.

For instance, Spain and Portugal have experienced a decline in bookings, whereas in Croatia a slowed down rate of bookings has been noticed.

In this context, Minister Cappelli has called for patience. "I know that there is some nervousness due to deceleration in bookings on foreign markets. However, we should be patient and be recognisable on markets by quality without lowering prices," he said.

Deceleration in bookings is also due to the fact that there are now more capacities on the market than two or three years ago when migrants and political crises were in Turkey, Greece, Egypt and other north African countries, which are now more stable and tourists have now more options to choose, the minister says. He also believes that last-minute booking will be more pronounced this year.

More news on the Croatian tourism can be found in the Travel section.

ZAGREB, February 19, 2019 - Tourism Minister Gari Cappelli on Tuesday underlined the importance of gastronomy and excellence in gastronomy professions in enhancing the quality of Croatian tourism.

Speaking at Open Day of Aspira college in Zagreb, Cappelli said that today it was perhaps even more honourable to be a chef because gastronomy increasingly motivated people to travel. He said Aspira and its gastronomy study programme in Zagreb and Split as well as the 100 students who enrol in it every year confirmed the validity of such studies.

Cappelli recalled that the Tourism Ministry had awarded 370 scholarships this year in cooperation with more than 20 tourism companies and chambers, saying jobs in tourism were increasingly in demand in Croatia and abroad.

The minister said he hoped more schools, both private and public, would offer gastronomy programmes in the future, especially in about two years when competency centres, teaching tourism and gastronomy, among other things, with more practical work, became operational.

The Aspira college operates in Split and in Zagreb, where a gastronomy study programme was introduced two years ago. The college also teaches tourism and other programmes. About 450 students enrol at the two schools every year, including 100 to study gastronomy.

The annual tuition fee at Aspira is 30,000 kuna for the tourism study programme and 40,000 kuna for the three-year gastronomy programme.

More news on the Croatian tourism can be found in the Travel section.

ZAGREB, February 13, 2019 - Without sufficient and qualified workers, there can be no successful tourism, which has seen a deficit in the labour force over the past few years and in order to attract and keep tourist workers, it is necessary to foremost increase their earnings so that they are more like those in neighbouring EU countries, which means that employers should be further unburdened, a conference on workers in tourism heard on Tuesday.

The conference, organised by the Ministry of Tourism, the Večernji List daily and Poslovni Dnevnik business daily, brought together representatives of the tourism industry, consultants, students, representatives of the Croatian Chamber of Commerce (HGK) and Croatian Employers' Association (HUP) as well as Tourism Minister Gari Cappelli, Labour Minister Marko Pavić and Agriculture Minister Tomislav Tolušić. They agreed that importing workers should be a back-up option to resolve the lack of workers in tourism and in other areas too, and that it was primarily necessary to activate the local labour force, particularly from the pool of 160,000 unemployed persons.

"Import quotas for workers should be an alternative but a possible option which is important for tourism. This year, 15,000 permits are 'on the cards' and we don't have to issue them all. It is good though that we have that as an option, because the problem of the lack of workers obviously exists and other countries in Europe are experiencing this too," Tourism Minister Gari Cappelli said.

The director of the Croatian Tourism Association (HUT), Veljko Ostojić, considers that not a lot would be achieved in the next two or three years unless wages in tourism go up by 30% to 40% or at least 10% each year.

More news on the Croatian tourism can be found in the Travel section.

 ZAGREB, December 16, 2018 - The European Parliament has proposed a separate, 300 million euro EU budget line for tourism, and the inclusion of tourism in the Council of the EU programme is a confirmation that Croatian lobbying and emphasising the importance of tourism for the economy, both of Croatia and the EU as a whole, was justified, the Tourism Ministry said in a press release on Sunday.

The initiative to better position the tourism industry in the EU institutions was initiated early this year by Croatian Tourism Minister Gari Cappelli. "I am pleased that our initiative has been recognised in the EU, and we also have strong support for it from Prime Minister Andrej Plenković and the Croatian government," Cappelli said in the press release.

"In the EU economy, tourism provides 24 million jobs, in other words, one in eleven workers is employed in jobs directly related to tourism. Considering the fact that tourism is one of the fastest growing economic activities in the EU, with a major impact on growth, society, development and employment, and that tourism and travel account for about 10 percent of the EU's GDP, it is acknowledged that tourism deserves a better position in the EU institutions. This will eventually be of vital importance for tourism in all EU member states, including Croatia," he noted.

The future Council of the European Union presidency trio, comprising Romania, Finland and Croatia, have prepared, in cooperation with the Council's Secretariat General and the European External Action Service, the 18-month programme of the Council for the period from 1 January 2019 and 30 June 2020, which was endorsed in Brussels this month.

The programme for the first time explicitly mentions tourism, in a section entitled "A Union for Jobs, Growth and Competitiveness", noting the need for better positioning of tourism on the EU agenda in order to encourage growth and employment.

In addition, the European Parliament has called on the European Commission to prepare a legislative framework to establish a programme for sustainable tourism, which would be part of the Single Market Programme.

To date, 14 of the 28 member states have supported the Croatian initiative, the Tourism Ministry said.

More news on the activities of Croatia’s Ministry of Tourism can be found in our Travel section.

The City of Zadar has always been a popular destination in Dalmatia, boasting the stunning sea organ, and, as Alfred Hitchcock himself once said, the most beautiful sunsets in the entire world. Now Gari Cappelli, the Minister of Tourism, has congratulated this ancient city on its success, stating that the very people of Zadar are the ones who give it its life.

As tourists flock to Zadar from all corners of the world, with numerous airline companies having taken it upon themselves to either increase their flights to this Dalmatian gem or to introduce new lines connecting major European cities to its thriving airport, the city goes from strength to strength across the spectrum, from its entrepreneur success stories to its tourism figures. It seems that Zadar's success hasn't gone unnoticed, at least not by Gari Cappelli, who expressed his warm feelings for both the city and for the ''happy people'' who live there and make it what it is.

As eZadar/Radio Zadar writes on the 23rd of November, 2018, upon welcoming the participants of the session of the Zadar City Council on the occasion of Zadar's city day, Gari Cappelli, the long standing Croatian Minister of Tourism, stated at the beginning of his address, among other things, that Zadar is a city full of of happy people who give it life.

Gari Cappelli recalled the very welcome fact that the highly respected Lonely Planet, one of the most popular and trusted travel guides in the entire world, included Zadar in its announcement of the prestigious ''Best in Travel 2019'' guide, in its recommendations on destinations which should be visited by tourists next year.

Make sure to stay up to date with news from Zadar and far beyond by keeping up with our dedicated lifestyle and travel pages.

Click here for the original article by eZadar/Radio Zadar

ZAGREB, November 13, 2018 - Tourism Minister Gari Cappelli said on Tuesday that the three Croatian tourism-related bills which the government forwarded to the parliament in late October were prerequisites for creating a new competitive identity of Croatian tourism, and that it was the government's duty to develop a strategy for managing Croatia's positive perception.

"Croatia must create a new image and move towards this topic with full responsibility, professionalism and maturity. It is the duty of our government on behalf of all citizens, institutions and companies, to develop a strategy of managing a positive perception of Croatian tourism," Cappelli said at a conference organised by the Jutarnji List daily in Zagreb on Tuesday on the system of tourist boards in the 21st century.

He is sure that the set of three bills will facilitate efforts to create easily recognisable national, regional and local identities and emphasise their importance and uniqueness considering that "they represent an additional value of the people and the nation on the global market."

Cappelli said that the proposed legislation is meant to establish a system of tourism boards following the model of the Destination Management Organisation (DMO).

Cappelli recalled that the Croatian National Tourism Board (HTZ) had recently opened an office in China and would soon set up another office in Seoul in South Korea for the purpose of better promoting the national tourist trade.

When it comes to the country's sojourn tax, the government will no longer determine the amount of that tourist tax and the decision-making on that will be at the local and county level, with the aim of decentralising the system.

For more articles on the activities of the Tourism Ministry, click here.