As Poslovni Dnevnik writes on the 10th of April, 2019, Croatia's ACI has published its revised annual financial statements for 2018. The company's revenue growth trend thankfully continued in 2018, its total revenue grew by seven percent when compared to 2017, amounting to 216 million kuna, while the company's operating income increased by eleven percent to 211 million kuna.

Revenues have been growing in almost all of ACI's marinas, and the company's profit also grew by 54 percent to a massive 38.4 million kuna, while its EBITDA increased by 22 percent to 93.9 million kuna.

The largest single investment project in ACI's history was also completed. In March, a new license was issued for the new ACI marina in Rovinj. This is a project that in which over 150 million kuna has been invested and can be briefly described in just four words: beauty, luxury, innovative solutions and security. The new marina's categorisation is now underway.

The new ACI marina has 1,400 m2 of commercial space available, and special attention has been paid to providing high level services on the premises, including catering facilities, restaurants and café-lounge bars, grocery stores, wellness centres, world-renowned brands, reputable sales offices for luxury yachts, charter agencies, a service centre for boats, etc.

The Rovinj ACI marina is equipped with the latest generation of WiFi systems, and luxury boats are provided with the most advanced video surveillance and access control system available. Particular care was taken to protect the surrounding environment and maintain the purity of the marine environment, construction materials and energy systems that provide maximum energy efficiency were used during construction, and all the benefits of LED lighting technology and lighting management were properly and readily applied. The official opening of the marina will be at the end of April this year.

The modernisation of the business that ACI has been intensively pursuing over the last few years is primarily focused on raising the quality of its services, attracting new clients and exploring the market potential of the Adriatic region as a whole.

Back in 2018, the company first published its own ACI No1 magazine, both in print and in digital format. It is a magazine which combines an ACI marina catalog, information for boaters, exclusive reportages and lifestyle themes, and a 2019 issue is just been made available.

ACI also achieves excellent results in the area of ​​digital business with its own reservation system. From last season, boaters have also had ACI's mobile application that provides easy and quick access to information and booking links available to them. For the third year in a row, ACI has also been using a digital sailing system with the help of special applications and devices used by sailors.

Given ACI's steady growth, 2018 was also marked by market research and a look into the development potential of the company, following which, a decision was made to embark on the development of new products and services, which will contribute to the diversification of the company's business.

Business cooperation includes the purchase of six ClubSwan36 sailing boats, and a range of marketing activities aimed at creating a recognisable image, regatta organisation, promotion and the creation of a tourism product aimed at raising the quality of ACI's services and the overall image of the Republic of Croatia as the world's leading nautical destination.

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Croatia's employment issues are somewhat perplexing to many, and although there has apparently been a massive drop in unemployment, there's only been a very slight jump in those registering as newly employed. The maths doesn't always really add up, but unfortunately the demographic picture of the country explains it all.

As Jadranka Dozan/Poslovni Dnevnik writes on the 10th of April, 2019, at this time of year, official data on employment levels tends to heavily reflect the huge levels of seasonality Croatia's labour market is affected by with every passing year, of course, this is primarily owing to the increased employment levels of seasonal workers before the start of the main tourist season in summer. The latest figures from HZMO (Croatian Pension Insurance Fund) from March show some growth in the number of insured persons, both on a monthly and an annual basis, with positive annual rates having continued to some degree or another since March 2015, while monthly growth began in only in February, according to analysts from Raiffeisen Bank (RBA).

Last month, the number of insured persons increased by 14,000, to a total of 1.52 million people, and it is realistic to expect that the number of insured persons will increase even more owing to the opening up of seasonal positions in preparation for the tourist season, an economic trend which could easily continue until September. When compared to March last year, the number of insured persons more than 32,000 or 2.2 percent higher.

Along with the pretty positive indicators from HZMO's labour market information, the Croatian Bureau of Statistic's labour force surveys are more in line with the process of the huge problem of the mass emigration of Croatia's fit, healthy, working-age population and the demographic of an aging general population. The latest survey, in which the last quarter of 2018 was included, indicates an annual drop in Croatia's working-age population from 3.54 to 3.52 million.

Those who are economically active in Croatia, whether they're already working or actively looking for a job, numbered just 1.8 million at the end of 2018, which is 42,000 people or 2.3 percent less than the year before. Despite the positive economic data, the activity rate dropped from 52 to 51 percent. Activity and employment rates have, at least for some time now, been indicative of much more than just the general rate of unemployment. This applies in particular to activities that are needed in more economically developed EU countries, and jobs that tend to be given to (highly) skilled staff.

Economists have been warning for a long time that recent developments in reduce the potential for growth in Croatia in the long term. The number of unemployed people in Croatia in the last quarter of the year, according to the results of the survey conducted in the last quarter of 2018, dropped when compared to the previous year by 46,000 people, or 23 percent, to 154,000 people. At the same time, however, the number of employees increased only very slightly, by 0.3 percent, meaning just 5,000 people more, to 1.64 million. In the fourth quarter, the activity rate and the employment rate recorded lower values ​​(51 percent and 46.6 percent), according to RBA.

In the last quarter of 2018, the numbers of economically inactive people older than fifteen increased by just one percent. Finally, the year ended with the fall of Croatia's unemployment rate to 8.3 percent, which is also the first drop below 10 percent since 2009, the year which followed the 2008 recession, but unfortunately this is partly a consequence of Croatia's negative demographic trend.

Although Croatia's growth in employment is of course very encouraging, analysts warn that it should be noted that the number of employees has been growing at a mild rate for the last five years, and that the average number of employees is still 6.5 percent lower than in before the crisis back in 2008. Overall, they conclude, Croatia's labour market remains very fragile and is burdened with some extremely serious structural problems, especially in terms of the total mismatch of supply and demand, long-term unemployment, and the falling number of working-age people for the ninth year in a row.

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

Click here for the original article by Jadranka Dozan for Poslovni Dnevnik

What do Croatian and international travellers think of their hosts when staying in private accommodation? How do they rate them, how much interaction is too much and are privacy and inside information the key?

As Lea Balenovic/Novac writes on the 9th of April, 2019, almost two thirds of Croats believe that the host is a key factor when staying in an accommodation facility, and those who are the best rated in the Republic of Croatia, both from domestic and foreign guests, can be found in in Rakovica, Osijek, Bibinje, Korenica, Kaštela, Makarska, Brela, Senj, Trogir and Podstrana.

They are the results of research conducted by the world's leading rental company, Booking.com, on a sample of 21,500 travellers worldwide. As the survey showed, 63 percent of international travellers and 62 percent of Croatian travellers think that their stay was better because of their engagement of the host who did everything they could to make it a better stay for them.

Most travellers want to feel "at home," as they have indicated in such surveys. For 62 percent of international travellers, the main advantage of non-hotel accommodation is the ability to take advantage of the knowledge and information available from the host and decide to stay in a property owned by someone who actually comes from the region in which the property is located. The same goes for 48 percent of Croatian travellers.

Nearly half of the international travellers who partook in the survey, or more specifically 45 percent of them, and 59 percent of Croatian travellers consider the local knowledge and information at their disposal from their host important for their overall budget because they hope to be given insider advice that will help them save some cash and avoid potential tourist traps.

However, while it seems that all travellers who took part in this survey generally consider the same things to be significant, each traveller is looking for a different type of engagement from their host. Therefore, some travellers are satisfied with a simple warm welcome, while others have slightly higher expectations from their hosts.

For example, 52 percent of international passengers and 40 percent of Croatian travellers believe that their host should only be seen once during their stay in order to make them feel welcome, and more than a third of international travellers and almost the same number of Croatian travellers expect their hosts to contact them only during their arrival, registration, and then again when they eventually check out and leave the premises.

What is often even more challenging to hosts is the fact that many travellers also expect them to have some sort of sixth sense and know just how much of a personal touch is needed for each traveller. 69 percent believe that hosts should intuitively know the right amount of time they should be spending with their guests, and that is also what 73 percent of Croatian travellers think. For four out of five international travellers and the same number of travellers from Croatia that means respecting their need for personal space, which means that the feeling of privacy is key.

The hosts also agree. Namely, nearly 80 percent of Croatian hosts think that the most important thing for guests is to be able to properly ensure their privacy.

"Our research reveals that it's very important for the owners and managers of accommodation facilities to find a balance which ensures the best experience, regardless of whether guests are staying in a vacation home, an apartment, in accommodation with their hosts or any other type of facility," explained Olivier Grémillon, the vice president of Booking.com, adding the fact thatt "what is crystal clear is that there is nothing like the ability of ordinary people to turn something into an unforgettable experience."

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

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

As Novac/Veljko Ostojic writes on the 8th of April, 2019, after almost a decade of high growth rates in Croatia's domestic tourism indicators, the dominant feature of this season, at least from the market's point of view, is uncertainty. The only thing we can be sure of, however, is the rapid growth period behind us. Facing Croatia is a period of struggle for each tourist owing to extremely turbulent broadcasting markets.

Such a destiny is shared by all Mediterranean markets with the exception of Turkey, and tourism in the Mediterranean as a whole is influenced by two dominant trends.

The first concerns the general insecurity in the European Union's economy, driven by the slowdown in individual national economies, primarily in big players such as Germany and Italy. An additional element that generates general uncertainty is the potential of Brexit (should it ever happen at all), the real effects of which at this stage can't really be estimated. These movements deter people from spending too much money, which is felt by the lack of bookings and reservations. In the first two months of 2019, the annual cumulative booking from Germany to Croatia was a little less when compared to 2018, while the decline in British tourist reservations throughout the Mediterranean was much more apparent, with Brits booking their holidays in the sun in advance being 10 percent lower on average than last year.

The second trend is the return of an old tourism king, Turkey, which has been a source of discomfort and nerves for Western Mediterranean countries, especially Spain, especially with its policy of subsidised travel arrangements last season, this season, Turkey is set to continue to record high growth rates of reservations from key European emission markets.

Such is an environment that defines the prospects of Croatian tourism not only this year, but over the next few years. The Croatian Tourism Association decided to quantify the effects of these trends on the expectations of Croatian tourist companies and the results of that survey were published in the first issue of Tourism Impulse, which will be published continuously every quarter. They surveyed the fifteen of Croatia's largest tourism companies, which account for 81 percent of the country's hotel sector.

The survey has shown that Croatian travel companies are experiencing revenue declines on one hand, and rising costs, primarily regarding labour, on the other. Croatian tourist companies are expecting slower annual revenue growth by 11.4 percent when compared to last year. Without changing the business environment in which Croatian tourism operates, this will result in a reduction in profitability and of course, a reduction in investment potential. With Croatia's damning reputation among foreign investors on the world stage, this really is the last thing it needs to seek to encourage.

The rather damp expectations of some of Croatia's largest tourist companies also show a drop in profitability this year by almost five percent and, as a consequence, the reduction of investments this year by a concerning twenty percent. Over the next two years, a further decline in investment is expected at a rate of 33 percent when compared to the periods in 2018 and 2019.

Reducing investment potential in tourism has a significant impact on the long-term prospects of Croatia's tourism. It is clear to all that in the long-term, Croatia must compete exclusively with quality rather than price. Reducing prices as much as possible to compete with Turkey on a surface level will only destroy the Croatian coast and Croatia's tourism sector as a whole. This isn't an option.

To be able to really compete with quality, apart from having determination to do so, it is crucial to attract and stimulate investments, something Croatia lacks in, and rather severely.

For that, Croatia will have to make numerous significant changes to its business framework. Today, Croatia is one of the least competitive in investing in tourism in the entire Mediterranean and has the highest tax burden of them all, especially if we look at the VAT rate. Spain, France and Italy have a reduced their VAT rates to help boost tourism. Croatias VAT rate, however, is 13 percent for hotel accommodation and 25 percent for hospitality services. Only Denmark is operating anywhere close to that in the whole of Europe, and one can hardly compare Croatia to Denmark.

Tourism directly and indirectly generates nearly twenty percent of Croatia's GDP, the sector generated eleven percent of all investments in Croatia. There is a lot of discussion about the optimal structure of the economy in which tourism makes up such a big part of it, and this, like many such discussions in Croatia, is often a waste of time. In a situation where tourism is experiencing significant growth rates and becoming an increasingly important factor in the receptive Mediterranean market, such discussions are quite unnecessary.

Of course, the priority requirement for Croatia's tourism growth is to boost investment, which will continually increase the country's overall quality.

If VAT on the entire tourist service is reduced to the level of Croatia's competitive countries, tourism can attract an additional three billion euros of investment, it can increase employee salaries by twenty percent and continue to rise over the next few years, which will further stabilise budget revenues and raise the standard life in Croatia in general.

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Nautical tourism is yet another tourism sector that Croatia would do very well to get stuck into, much like the country's already blossoming medical tourism industry. As more and more people arrive by sea to explore the beauty of the Croatian coast and more than 1000 islands, it seems revenues are gradually on their way up, too.

As Morski writes on the 6th of April, 2019, in a total of 142 Croatian ports designed for nautical tourism in six different Adriatic counties last year, a total of 857 million kuna in revenue, which is nearly three percent more than in 2017, was recorded, and the highest of this revenue, 618.1 million kuna (seven percent more), came from the renting of berths, as has been deemed from the data taken from the Central Bureau of Statistics (CBS).

In Croatia's numerous nautical tourism ports, on the 31st of December 2018 there were 13,617 vessels moored on a permanent basis, which is 1.4 percent more than the number recorded one year earlier on the 31st of December 2017, according to a report from SEEbiz.

According to the type of vessel permanently moored in the sea, the most numerous of all were yachts (50.1 percent), followed by motor yachts (46.1 percent) followed then by various other types of vessels (3.8 percent).

The largest number of vessels permanently moored were operating under the flag of the Republic of Croatia, equalling 44.0 percent in total. Following came vessels all sailing under various European flags - Austria (15.8 percent), Germany (15.2 percent), Slovenia (5.1 percent), Italy (4.2 percent) and the United Kingdom (2.2 percent).

In 2018 there were 194,164 vessels in transit, which is 3.8 less than there were back in 2017.

According to the type of vessel in transit for which a berth was used, the highest number once again were sailing yachts (67.3 percent), followed by motor yachts (28.3 percent), and then came other vessels (4.4 percent).

In the year 2018, the highest number of vessels in transit were from the Republic of Croatia (47.7 percent), Italy (13.9 percent), Germany (12.8 percent), Austria (6.6 percent) and Slovenia (3.8 percent) which makes up 84.8 percent of the total number of vessels in transit.

Make sure to follow our dedicated lifestyle page for much more. If it's just sailing in Croatia you're interested in, give Total Croatia Sailing a follow.

Click here for the original article by SEEbiz

As Novac writes on the 27th of March, 2019, tourists staying in both hotels and private accommodation in Dubrovnik are on average 42 years of age, of a higher level of education and possess decent paying power. They typically spend 170 euros per day on average, which is 90 euros more than the average stands in seven other coastal Croatian counties, according to a survey taken by TOMAS Dubrovnik 2018.

This research was conducted by Zrinka Marušić from the Institute for Tourism, for the needs of the City of Dubrovnik, only for Dubrovnik, conducted on a sample of 1,600 respondents.

"Dubrovnik attracts a specific sort of guest, due to broadcasting markets that aren't specific to the rest of Croatia. According to the motives of the visits, we can no longer speak of a [typical] holiday destination," Marušić said.

Namely, while visiting Croatia's southernmost city, guests are mostly attracted to new experiences, gastronomy and cultural sights, as well as swimming, local portal Dubrovački vjesnik writes.

According to the survey's data, the average daily spending of stationary guests staying in Dubrovnik is 170 euros, of which about half or 87 euros refers to accommodation, food and drink outside the accommodation facility accounts for 43 euros, culture and entertainment accounts for 14 euros, purchases account for 11 euros, etc.

The biggest spenders are from non European, more distant countries, topped quite unsurprisingly by the Americans, followed by tourists from Australia and from various Asian countries. Two thirds of Dubrovnik's stationary guests arrive in Dubrovnik with their partner, and 86 percent of them who visit the city are doing so for the very first time.

Research has shown that Croatia's long-standing tourism Mecca is a distinct airport destination as more than 85 percent of the respondents arrived by air. As many as 70 percent of the southern Dalmatian city's guests stay from four to seven days.

The city's visitors are most pleased with the beauty of the city, the levels of safety and security, the hospitality, and the typically high quality of the provided accommodation. They are least satisfied, however, with local transportation, shopping opportunities and the intolerable crowding and traffic in public places and on the city's numerous beaches.

The survey also included visitors who arrived in Dubrovnik on a cruise ship and shows that they are on average 49 years old and spend on average 51 euros per day. The most extravagant among them are once again Americans, and the most frugal are our neighbours from across the Adriatic, the Italians.

As many as 92 percent of the tourists asked were visiting Dubrovnik for the very first time, discouragingly, they are mostly ''one-day visitors'' and remain in Dubrovnik for a mere five and a half hours. Most often, they visit sights and eat at restaurants, and these guests are by far the least satisfied with the shopping opportunities and the total lack of organisation of the traffic and the huge crowds.

Make sure to follow our dedicated lifestyle and travel pages for much more. If it's just Dubrovnik you're interested in, give Total Dubrovnik a follow.

As Morski writes on the 27th of March, 2019, as the beginning of 2019's tourist season draws ever closer, Croatian nautical tourism is in great demand. When it comes to chartering however, the Republic of Croatia appears to have lost its grip on its former leading position.

Most of the interest, after a great many years, has been attracted by one of Europe long-standing tourism kings - Greece, which has made it to the top in terms of nautical tourism owing to various state incentives. Croatian marinas, on the other hand, are expecting this summer season to remain more or less at last year's level.

Just about a month separates us from now and the traditionally accepted ''start of the season'', which is typically around Easter, but the first signs of nautical tourism have already started to blossom. 17,000 berths in Croatian marinas have so far been highly sought after commodities, and there is no subsiding in the search for free spaces in Betina, according to a report from HRT. However, alongside a healthy dose of optimism, there are also warnings to be listened to.

The announcement of the tourist season says: the most desirable destination is no longer Croatia but Greece. The secret of turning that back around lies in... you guessed it... state incentives. They might not be so easy to come by, however. With the knowledge that Greece managed to take first place thanks to incentives from the Greek state, a long list of wishes addressed to the Croatian Government should now begin.

Legislative acrobatics tend to cause great damage, and Croatia certainly has a knack for that, but in spite of that, Croatia's numerous comparative advantages continue to compensate for its usually bad politics.

Croatian marina's expect results at the level of last year's, which were indeed record-breaking. In order to restore the leading position when it comes to charters, the experts say - it is necessary to activate the so far totally unused markets - North and South America, as well as up north in Scandinavia.

Make sure to follow our dedicated lifestyle and travel pages for much more. If it's just nautical tourism and sailing in Croatia you're interested in, give Total Croatia Sailing a follow.

Click here for the original article by Hrvoje Gunjaca/HRT

The Zagorje castle, with a welcome 126 million kuna in investment, is becoming a tourist attraction.

As Bernard Ivezic/Poslovni Dnevnik writes on the 26th of March, 2019, in beautiful Zagorje, the very first scientific destination in Croatia is being built. Krapina-Zagorje County has launched a public tender for the architectural solution for the reconstruction of the castle and gardens of Stubički Golubovec.

This old Zagorje gem is otherwise one of the best preserved Croatian castles and the place in which this year's Seljačka buna will be held will be transformed into a "scientific centre". This is a new type of institution for Croatia, one that unites the functions of the museum, an entertainment park, and the innovation centre for the popularisation of science.

The county is planning to move the Science Educational and Entertainment Centre (ZEZ) to the castle's grounds. This is the same project that was supported by the City of Zagreb six years ago, it was ready to invest 200 million kuna into the project, transforming the castle into an Italian pavilion at the Zagreb Fair, but after much talk, nothing happened. A likely story.

Krapina-Zagorje County announced the plans for the creation of the centre last year, in addition, it has also announced the first tender for the beginning of its eventual realisation. The tender is a somewhat modest one, worth 1.5 million kuna, but is an introduction to an eventual investment which is currently estimated at a massive 126 million kuna.

A similar centre exists in Finland, Heureka near Helsinki, attracting an average of 280,000 visitors per year, it has become the most popular recreational destination in the country. In 2012, the AHHAA Science Centre in Estonia (with more than 500,000 visitors) was the strongest tourist attraction in that country, too. This new addition to Croatia could bring fruit, and a lot of it.

The are more and more similar institutions popping up in Europe. If this move in Croatia manages to see the numbers Finland saw, it would mean that ZEZ would exceed the number of visitors to Dubrovnik and its museums, which according to MDC's data on visits to Croatian museums in 2017, came in fourth place. With half a million visitors to the science centre in Estonia, ZEZ would become the most visited cultural destination in Croatia, overtaking the incredible Pula Arena (486,966 visitors), Diocletian's Cellars in Split (357,745) and Klović's Palace in Zagreb (314,767 visitors).

Željko Kolar, Krapina-Zagorje County's prefect, says that when taking into account examples from other countries and cities across Europe, the opening of the ZEZ Zagorje Centre represents a great development potential.

"Krapina-Zagorje County, Donja Stubica and the ZEZ cooperative, as partners in the project, realised that there's a need to popularise science and education in Croatia, and that the establishment of a scientific educational and entertainment centre would provide a good basis for that very popularisation of science and education, scientific institutions, and the economy, supporting entrepreneurship and directing young people towards science,'' stated Kolar.

He added that they are entering the modernisation project slowly because they want to preserve the rich cultural heritage of the castle and the gardens.

Davor Komerički, ZEZ's initiator, says he is now finally satisfied with the pace at which things are moving. He pointed out that the gross value of the project stands at 126 million kuna, and 85 percent can be funded from EU funds.

"We've been developing this project for a long time, and we started it in 2010, and when the EU evaluated projects that Croatia could apply for EU funds for before the accession of Croatia [to the EU], our project was one of the 20 best rated ones. We were in the eighth place out of all of the projects from Croatia,'' Komerički noted.

He also stated that their aim is to prepare the necessary documentation by September in order to retrieve the aforementioned funds. "If everything goes to plan, in two years Zagorje's ZEZ centre will be open in the castle," Komerički said.

According to the currently available data, Zagorje's ZEZ centre will occupy 5,000 square metres, of which 3,200 will be in the castle area itself. An additional space of 1,800 square metres will be built next to it. There will also be a science park with exhibits in an arboretum of 5,000 square metres. The centre itself will have as many as 30 different facilities.

"The goal is to be self-sustainable, both energetically and financially. In addition to being a great tourist bait for Zagorje, it's located just 200 metres from the section of road that connects Zagreb with Stubičke Toplice,'' Komerički said.

"Krapina-Zagorje County is the best continental destination of 2018, and with this project we'll further develop our tourism offer, of the county and of the entire region,'' Željko Kolar added, stating that he expects a major impact of the centre on both tourism and the economy in Krapina-Zagorje.

Make sure to follow our dedicated lifestyle page for much more.

Click here for the original article by Bernard Ivezic for Poslovni Dnevnik

As Suzana Varosanec/Poslovni Dnevnik writes on the 25th of March, 2019, under its new administration and new owners, the popular Jadran hotel group from Crikvenica is expanding rapidly and after taking over Club Adriatic, it is continuing to introduce new facilities in Baško Polje, and is now expanding to the Kvarner region.

Based on the ten-year lease of the Hotel Delfin in Omišalj, business for Jadran is beginning on the island of Krk. The offer was favourable, as can unofficially be revealed. The Crikvenica-based hotel group also signed a long-term lease for three pavilions in Crikvenica. Owing to these business moves, Jadran's accommodation capacities will increase by a significant 139 accommodation units, in Baško Polje there are about 440 new units, and this season Jadran will be able to boast about having a 36 percent higher capacity compared to last year.

And while Hotel Delfin can't be renewed this season for various reasons, this is thankfully not the case for the three pavilions that were once owned by Jadran. Since they are situated at the location of a common entity whose renewal is already in full swing, a makeover awaits.

Namely, from the Adriatic highway to the coast, Jadran's property in Crikvenica is having works carried out at Hotel Ad Turres and on thirteen pavilions, each with 27 rooms as well as works at Hotel Omorika, which will be completed in ten days.

Last year, this hotel group grew by 10 percent more than it did back during 2017, and realised an impressive 416,000 overnight stays, in 2019 they're planning for 437,000 overnight stays, marking an increase of about 6.6 percent. Slovenian guests and Croatian guests have primarily been the main group to stay in Jadran's numerous accommodation facilities, followed by those from Austria and Germany, and a similar tourist structure is expected this season as well.

Congress tourism is still being developed, and after the completion of the welcome renovation of the Omorika and Katarina hotels, Jadran is expecting an increase in those niches, too. In the health sector, however, Jadran has some big plans in synergy with some local health institutions.

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Click here for the original artice by Suzana Varosanec for Poslovni Dnevnik

The City of Dubrovnik wants 30 million kuna and 30 percent of future revenue for the use of the popular Srđ cable car without a concession contract.

As Marija Crnjak/Poslovni Dnevnik writes on the 21st of March, 2019, the several year long ''argument'' over the concession of the Srđ cable car has escalated to the extent it has because the City of Dubrovnik filed a lawsuit against Excelsa nekretnine (real estate) owned by the Lukšić family, accusing them of the unlawful acquisition of money. The amount that City of Dubrovnik is seeking for the use of the popular cable car without a concession agreement is 30 million kuna, as Dubrovnik's mayor Mato Franković announced last week.

He also explained that DORH had given the company a deadline which is the end of this month to comply with the law of the Republic of Croatia, to pay a concession fee to both the City of Dubrovnik and to the state, and by April the 1st, they are obliged to sign a concession agreement with the City of Dubrovnik.

If this doesn't happen, the cable car will be closed because its use would then be illegal, Mato Franković said, adding that a new report showed that the concession fee of 15 percent is too low and the belief is that it should be 30 percent. At the next session of Dubrovnik's City Council, a proposal to annul the old motion and to propose a new one will take place. In an interview with Poslovni Dnevnik, Anto Rusković, the director of Excelsa nekretnine explained why a concession contract has not yet been signed and that the company will not agree to an even higher fee than the one which was previously proposed.

Do you admit that there is a 30 million kuna debt to the City of Dubrovnik? Do you consider that the city's claim is justified?

The City of Dubrovnik filed a lawsuit against Excelsa nekretnine in the amount of 20.1 million kuna, and Excelsa nekretnine will pay as much as is determined by a final court judgment. Given that such verdicts still haven't come to pass, and in order to ensure that the City will be able to be paid if the court's verdict goes in its favour, we have offered the City of Dubrovnik the appropriate means of securing its eventual receivables in good will. It should be stressed that, if [any debt] exists at all, then it has arisen because the City of Dubrovnik hasn't offered a conclusion to the concession contract to date.

Why has a concession agreement between Excelsa nekretnine and the City of Dubrovnik not been signed yet?

Excelsa nekretnine has applied for a concession, with the concessionary terms agreed with the City of Dubrovnik, filed in August 2015, while the City of Dubrovnik hadn't issued a concession decision in accordance with the agreed terms until April 2018. In the meantime, the city brought in and then revoked several concession-related decisions, and the last one from April 2018 hasn't yet been implemented. It's necessary to clarify that we have been seeking concessions since 2010, but we had to wait for the applicable legislation by the state. The law granting concessions to cable cars entrusted to local self-government units was passed in 2014 and then we started negotiations with the city, finally agreeing on the concession conditions in July 2015. Since then, the process has only become more complex and has led us to the situation in which we find ourselves today. If the concession contract was signed in 2015 as was agreed, the City of Dubrovnik would have got its concession fee the entire time and there would be no dispute today.

Is the closure of the cable car expected?

In the potential situation of the closure of the cable car, all sides will suffer significant losses, especially Excelsa nekretnine and its partners, since the work of the cable car provides jobs for a significant number of people.

Furthermore, if the cable car closes, the state budget will lose part of the tax revenue, and the City of Dubrovnik will not receive any revenue from the concession. It's important to note that since the beginning [of the work of the cable car] Excelsa nekretnine has contributed more than 122 million kuna in taxes and contributions to the state budget, predominantly based on the cable car's business.

We believe that the scenario of its potential closure should be avoided, but we're not in a position to make such a decision. Not only are we disappointed in the way the authorities are acting, but we're also frustrated by the fact that, unsuccessfully, we've repeatedly tried to solve this problem with a reasonable and rational approach. Unfortunately, this negative attitude towards investors will not contribute to improving the investment climate in Croatia.

Do you have a license from the Ministry of Transport to work on the lift and on what basis does has it been provided?

Excelsa nekretnine received approval from the Ministry of Transport for the carriage of passengers by cable car before the cable car even started working back in 2010. At that time, such approval was granted instead of a concession due to the long duration of the concession-issuing procedure, as is written in the very approval. Had Excelsa nekretnine not received explicit permission to carry out activities of the carriage of passengers by cable car, we wouldn't have even begun doing so.

The mayor has announced that he will seek 30 percent of the revenue in the concession contract, which should be signed by April the 1st. Are you ready to agree to that?

We still haven't had any insight [into that] and we don't have access to the new expert testimony mentioned by the mayor which points to the need to increase the fee by 30 percent, so we can't comment on it either. On the basis of the previous expert testimony, we can see that such fees, twice the amount previously agreed, is unfounded. The City Council already approved the concession fee in April last year. We consider that the City of Dubrovnik should send a contract under the previously agreed terms and end this whole situation, which has already been going on for far too long.

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Click here for the original article/interview by Marija Crnjak for Poslovni Dnevnik