ZAGREB, 19 Sept, 2021 - The Croatian Tourism Association (HUT) continues implementing its project of offering free seaside holidays for primary and secondary school students from the earthquake-affected areas in Sisak-Moslavina County.

All the 12 hotel companies within HUT, in cooperation with four ministries, decided to provide free holidays on the coast for over 1,000 students and teachers from 13 schools in the quake-hit Sisak-Moslavina County's areas.

At the launch of the scheme in June, 180 pupils from three elementary schools spent the summer holidays in Valamar hotels in Istria.

The implementation of the programme resumed in mid-September for students from the remaining 10 schools covered by the scheme and will last until mid-October.

The free-of-charge stay is provided in the following hotels: Aminess hoteli Novigrad, Plava laguna Poreč, Maistra Rovinj, Arena Hospitality Group Pula, Jadranka Mali Lošinj, Jadran Crikvenica, Hoteli Omišalj, Falkensteiner Zadar, Turisthotel Zadar, Bluesun Hoteli Zagreb, Imperial Riviera Rab and Radisson Blu Resort & Spa Split.

HUT director Veljko Ostojić was quoted as saying that he was glad to see that the successful tourist season could be wrapped up with this charitable action.

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March 4, 2021 – Veljko Ostojic, director of the Croatian Tourism Association, was a guest on the Dobro Jutro, Hrvatska show, where he discussed COVID passports and vaccinations of tourist workers.

"First, we need to define what a COVID passport is. In my opinion, if it is a precondition for crossing the border, then it is discrimination. If it is a document that will allow those who have been vaccinated to cross the border faster and easier – I'm for it," Ostojic told HRT's Dobro Jutro, Hrvatska show.

Although it is not yet fully defined, the COVID passport should be given to those who have been vaccinated, those who have recovered, and those tested by PCR just before the trip, said Ostojic.

Asked whether entering Croatia will be similar to last year's, given that the vaccination will not be as expected, Ostojic said he hoped so. However, the priority goal for Croatia should be to "get green" as soon as possible. In that way, we could say that we are managing the epidemiological situation and that we are a safe country.

"Common European criteria for crossing the border should be defined, the epidemiological situation in our most important emitting markets should be monitored, from Germany, Austria onwards," says the Croatian Tourism Association director. He adds that it is still too early to talk about this topic because we still have a month, a month and a half.

Regarding the vaccination of tourist workers as a condition for the safe destination status, about which a promotional campaign was also launched, Veljko Ostojic says that tourist workers' vaccination will never be 100 percent. The Croatian Tourism Association conducted a survey with the Association of Hoteliers and the Croatian Camping Association. About 70 percent of employees expressed interest in vaccinations a month ago, Ostojic said.

There will likely be an organized vaccination of tourism workers after the first and second priority groups are vaccinated. We hope that it will be during April so that we can readily and vaccinated enter the primary tourist season, concluded Ostojić.

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November 20, 2020 - The Croatian Tourism Association is optimistic about the 2021 tourist season, thanks to the recent announcements of a COVID-19 vaccine.

HRTurizam reports that the recently published optimistic results of the third phase of testing two vaccines against COVID-19 and Germany's announcement that it could vaccinate 70 percent of the population by the summer of next year have brought optimism among tourism workers around the world, including Croatia.

This news is especially important for our country, where the arrival of guests from Germany in large numbers is crucial for a successful season.

Announcements about the vaccine inspire optimism that tourism could begin to recover in the second quarter and then approach the numbers before the pandemic in the second half of next year, said Veljko Ostojic, director of the Croatian Tourism Association, adding: "We must be careful and continuously monitor the situation to be able to make appropriate decisions, both in terms of the market and in terms of the organization of work in accommodation facilities and destinations."

As a review of expectations for next year, Ostojic points out that it will be marked by last-minute reservations as well as an increase in online reservations.

"In any case, it is to be expected that next season will have the characteristics of last-minute reservations, an increase in online reservations, increased interest in higher category facilities that guarantee greater isolation of guests and that the key criterion for choosing a destination will be security in the broadest sense. Croatia's advantage is that it is an auto-destination and has a significantly smaller population compared to other countries," commented Ostojić.

Tourism in the National Development Strategy 2030 is recognized as a strategic branch that stimulates the economy

The draft text of the National Development Strategy, which was adopted by the Government of the Republic of Croatia and sent for broad public discussion, defines tourism as a strategic activity in Croatia, which is why it is necessary to work on its sustainability and recovery from the current crisis.

The goal of the umbrella strategic national document, which must be followed by all other sectoral strategies and implementation plans, is to keep Croatia among the leading European tourist destinations in terms of safety, quality, added value, sustainability, and innovation.

"This year, tourism is finally recognized as one of the key economic sectors in which we have the knowledge and experience to make an extraordinary result even in times of crisis. This year, tourism has proven to be a shock absorber of the economy, rather than a vulnerable part of the economy as it is often perceived. The key to further development of tourism is to raise its international competitiveness, both by reducing the VAT rate to the level of the competition and by defining a comprehensive approach on how to encourage increased investment and reduce barriers to investment in the hotel industry that brings the greatest added value to the economy and the local community," said Ostojic and concluded that they are satisfied that the mentioned key determinants are recognized in the draft text of the National Development Strategy of the Republic of Croatia until 2030.

In Croatia, there are still on average between 15 and 20 thousand tourists every day

An average of between 15,000 and 20,000 tourists still stay in Croatia every day, and official statistics show that 236 hotels and 31 campsites have been opened. Most tourists stay for the weekend, but there is a significant number of those who stay during the week.

Tourists are attracted by special offers, including heated houses in camps, the new offer of "home offices" in hotels, and better prices for accommodation in luxury villas. Most guests are in family accommodation, about 4000 of them, while hotels have about 3000 guests, followed by camps.

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November the 6th, 2020 - The Croatian Tourism Association's main man, Veljko Ostojic, outlined what Croatia's next steps should be in order to rescue tourism next year, with safety being the most important factor of all.

This year has been incredibly challenging in an entirely unprecedented and unexpected way. When one usually thinks of a global pandemic, at least up until 2020, they think of the Spanish flu which ravaged a delicate post-WWI world. This time last year, it would have been impossible to imagine that 2020 would be dominated in each and every sense by another global pandemic involving an entirely new virus. The Croatian Tourism Association has stated that from now on, safety and security are paramount in people's minds, and that Croatia must be positioned as a destination that can offer that to its visitors in future.

As Poslovni Dnevnik writes, the main motive for tourists planning on taking a trip next year will be safety and security in the broadest possible sense of the word, so we must try to be a safe tourist destination and do our homework as we did this year, because that we haven't had any cases of people becoming infected with the new coronavirus in commercial accommodation tourist facilities.

The leader of the Croatian Tourism Association (HUT), Veljko Ostojic, explained the above in the new bulletin of the Croatian Tourism Association "Croatia Tourism & Travel News", in which he analyses the direction in which the ongoing global coronavirus pandemic will force tourism to head in.

He believes that Croatia, when seen from today's perspective, can once again achieve better tourist results next year and claims that in 2021 the profit will be made from those who can drive to Croatia.

In addition, he predicts that last minute demand will be very much present once again, and that accommodation facilities of higher categories will be sought after, as well as those that are physically separated and more isolated, which guarantee safety. He also believes that online reservations for stays in Croatia will additionally increase significantly.

Veljko Ostojic noted that this year, most of the tourists who came to Croatia had visited it before, and that some new people also chose the country, who, up until recently, chose other Mediterranean destinations. They are expected to pay Croatia a visit next year as well.

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September the 12th, 2020 - The Croatian tourism industry has taken blow after blow ever since the coronavirus pandemic broke through into the country back in spring this year. Croatian camps and hotels have had an extremely difficult time in drying to decide when to open, how to adapt to the epidemiological measures, or whether to bother opening their doors at all.

Despite the temendous amount of woes which plagued (and quite literally) tourism in Croatia, which is an economic branch of vital importance, accounting for around 20 percent of the country's GDP, the Croatian tourist season actually recorded far better results than were ever initially expected back during those dark lockdown-dominated days and weeks. With travel restricted and everything up in the air as the virus spread, many Croatian camps and hotels thought that there would be no season to speak of whatsoever, and the predictions from those in the industry were dire.

As summer arrived, flights began operating again and more and more Croatian camps and hotels began opening their doors. This was aided by Croatia's previously excellent epidemiological picture when compared to other countries in Europe, especially the terrible situations in both the United Kingdom and nearby Italy, and for the most part, the calculated risk of opening Croatia up to tourists paid off, resulting in a far better season than anticipated and a decent income level.

Now that the season is all but over and the cases of infection have begun to climb rather dramatically, just how well did Croatian camps and hotels actually perform when we look at the real figures?

As Poslovni Dnevnik/Marija Crnjak writes on the 11th of September, 2020, this year, Croatian hotels accounted for about 44 percent of last year's turnover during the summer season, with revenues that are 5 to 15 percent lower than physical indicators, according to a survey by the Croatian Tourism Association, which was revealed recently at a press conference at the Ministry of Tourism by Veljko Ostojic.

This shows that there was price pressure, to which some hotels responded. Croatian camps had better demand, they realised 57 percent of last year's overnight stays.

Minister of Tourism Nikolina Brnjac revealed that in the season, Croatia realised 5.2 million tourist arrivals, which is 54 percent of the level of traffic from 2019, from 39.8 million overnight stays, or 62 percent of last year's traffic.

This is significantly better than expected from the rest of the Mediterranean. The director of the Croatian Tourist Board, Kristjan Stanicic, revealed that the CNTB's revenue this year will be around 200 million kuna, which is 150 million less than last year, but he pointed out that this will be enough for the campaigns that are being prepared for 2021.

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August 24, 2020 - The main tourist season in Croatia is over. Still, since tourists want to come despite tightened measures in some countries, the post-season could last, says the director of the Croatian Tourism Association (HUT), Veljko Ostojic.

Glas Istrereports that commenting in an interview on achievements in Croatian tourism this year, especially in hotels and camps of member companies of the Croatian Tourism Association (HUT), which are among the largest and leading in Croatia, Ostojic emphasizes that the foundation of success this season is safety and that Croatia is the winner of the Mediterranean this summer.

"We can all be proud of that, we had a quality epidemiological situation at the beginning of the main tourist season, thanks to the great efforts of epidemiologists, staff systems and the government, and we recorded great interest from tourists. But now, with the worsening of the epidemiological situation, we find ourselves in trouble over the continuation of the season," says Ostojic, adding that everyone in tourism warned that due to several clubs and weddings, the whole season should not be questioned, but that is exactly what happened in the end.

However, even now, after some countries put Croatia on the red list, Ostojic says that we should not give up the rest of the season, because tourism accounts for about 20 percent of domestic GDP and "giving up tourism revenues in September and October would not be responsible neither from us in tourism, nor from anyone in Croatia".

With epidemiological improvements, the postseason may take some time

On the other hand, he points out that "most countries that have tightened travel rules for their citizens in Croatia have clearly communicated the numbers we need to return to in order to go back to the category of safe countries, without restrictions. This should also be seen as a result of the continuous work of our institution, because when things are clear and transparent, then you know what needs to be done".

All this means that by the end of August, September and the future period, as well as the current tourist season, will determine the epidemiological situation in the country and individual counties and regions.

"If in the next ten days we manage to improve the epidemiological situation significantly and as a result change the travel rules from certain countries, we can expect that some hotels and camps will work until the end of October, possibly one in the destination will be open all year," he says. Ostojic, noting that hoteliers have no expectations from the congress post-season, for which they will have to wait for better times.

He also believes that the CNIPH, national and local headquarters have invested a lot of effort since the beginning of the epidemic, and the HUT has cooperated well with everyone, as well as that more can always be done, especially in communication. But instead of criticizing, he keeps looking for solutions more correctly.

Due to increased transparency and showing that the epidemiological situation is not the same in all parts of the country, HUT launched the COVID-19 regional tracker website this summer, updating data from headquarters, which was viewed by about 350,000 people.

They also published 12 weekly newsletters with the most important tourist information, which they sent to more than a thousand addresses and communicated daily, although this is not the main purpose of HUT, with domestic and foreign media, tour operators, individuals with the sole aim of making the season in Croatia better.

High occupancy of camps and hotels, but lower revenues

For the occupancy of facilities in the peak season, it reveals that it was the best in campsites, more than 80 percent, while hotels utilized more than 70 percent, in these categories of accommodation, the best occupancy was recorded by large facilities, both camps and hotels with more than 50 beds, with the fact that, as he points out, it is clearly shown that occupancy increases with the number of stars or quality.

Hotel houses in the northern Adriatic worked best, which was expected considering that this is the year of car guests, because everyone wanted to avoid the risks of joint transport, distant destinations, possible sudden repatriation and the like.

State assistance and ‘quick’ measures needed by the end of August 

However, the financial results, says Ostojic, will be lower than the physical ones, which is also expected, and the realized revenues will definitely not be enough to cover winter. Help from the state will be needed, as it was from March to August.

"We expect the measures to be defined quickly. HUT has given its proposals to the relevant ministry and we expect answers by the end of August at the latest. Otherwise, the process of taking care of extra workers will begin," Ostojic said, noting that they are satisfied with the first messages by the new Minister of Tourism and Sports Nikolina Brnjac, but also with the overall commitment to tourism of the Prime Minister and the Government.

It seems, he says, that there is an understanding in the government that tourism needs a set of short-term measures to maintain liquidity and jobs, and then a set of long-term measures to strengthen the competitiveness and resilience of the entire sector, for which they also expect concrete measures soon.

"It is certain that the EU Recovery Fund and the new financial envelope will help us all, for which we must prepare for concrete programs and projects. Talks about it have been launched and it seems to me that we are on the right track. We have a new tourism development strategy ahead of us, and we expect the active involvement of the sector and the adoption of ambitious, but also pragmatic and feasible results, because no one needs another strategy that will remain a dead letter on paper," Ostojic believes.

Recognition, quality and sustainability are still key to success, but there is still a lot of work to be done

Although tourism is at a turning point globally in these circumstances, and it seems that the coronavirus will forever change some of the established ways of working in tourism and even the expectations of tourists, Ostojic still considers recognition, quality, and sustainability the keys to success.

"We have to focus here because we have to strengthen the overall competitiveness of Croatian tourism on these 'pillars' and there is a lot of work ahead of us," he said. He believes that, in addition to the new tourism strategy, a number of fiscal issues need to be addressed - VAT brought to the level of Mediterranean competition, which is important for investment, increase the number of hotels with incentives, but also improve spatial planning, reduce bureaucracy, finalize the law on foreigners and the issue of the permanent season and to regulate the system of tourist boards with stronger control over the spending of funds.

He adds that the implementation of the Law on Tourist Land should be continued and a decree should be passed that will regulate the issue of the rental price.

"In the sector, we also expect an exemption from the payment of the fee for tourist land for this and next year due to a significant reduction in income," concludes Ostojic.

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As Novac/Dora Koretic writes on the 6th of July, 2020, although in much smaller volumes than in previous years, tourists have been arriving in Croatia for weeks, unfortunately, just at the moment when the epidemiological picture began to go downhill again. How can we find the balance between the tourism we need to live on and the safety of Croatia's residents? These are just a couple of the topics Novac discussed with the director of the Croatian Tourism Association, Veljko Ostojic.

Have we started to promote Croatia aggressively enough as an ideal destination during the pandemic? In recent days, criticism has been heard that Greece and its competitors have a much better campaign and promotion than we have. Have we lagged behind too much?

''The campaign is well timed because it didn't make sense for us to start earlier until tourism or people going on holiday were in focus. Every campaign is largely determined by financial capabilities and here we are, to be honest, with limited compared to those bigger/stronger than us. Of course, we can always discuss the effectiveness of the promotional messages we do send, as well as how we can create a synergy of funds invested by the public sector with funds invested in promotion by private companies in our key markets. Maybe we could have done better there. But with the classic promotion this year, we have an extraordinary opportunity to send messages that directly affect the decision of tourists to come to our country and, due to the great interest of the media, practically for free, too.

These are messages about the epidemiological situation, the openness of our borders and the level of security within the country, which is something that is of great interest to every tourist this season. In Croatia, we have the best epidemiological situation among our competition in Europe and across the Mediterranean, we were the first to open our borders and we're the only ones with serious tourist traffic, and all that without any tourists infected during their stay in Croatian commercial tourist facilities. No one can dispute that and in that way one must communicate clearly and constantly, from all positions of power. Although Austria is currently investing 40 million euros in its promotion on the German market, Croatia can compensate for this to a good extent only by sending clear messages that we're the closest and safest Mediterranean country for our most important emitting markets.

Are you saying that our messages on this issue were a little confusing?

There's a lot of cacophony about the epidemiological situation and about the possibility of travelling, crossing borders and so on. You have new information practically every half an hour, which is accompanied by different interpretations, and that's confusing to people. Therefore, all those who present data or communicate in any other way should be clear and precise when thinking about the consequences of making their statements. Additionally, due to the crisis this year, all EU countries are trying to keep their people and encourage them to holiday in their own countries and attract additional tourists from other countries, and they're waiting for us to make mistakes so they can use those mistakes to their own advantage.

TUI announced in late June that it would try to reach half of last year's turnover in Greece. And we’re on the map of countries where this operator is doing business, but it seems like they're still sticking to the idea that it’s more cost-effective to step up their efforts elsewhere?

Given the business logic of large global tour operators, their greater focus on large markets in which airline tickets and a package holiday come together, that's understandable. Croatia has always been predominantly a destination that is reached by car, and this year that will be even more pronounced. That's the reality and we must use it.

In addition, large tour operators are the owners or partners in a number of hotels in the destination you mention, so this is certainly a reason for increased interest.

How much will Slovenia's decision to put Croatia on the list of "yellow" countries harm us?

The largest number of Slovenes come to Croatia for tourism in coastal areas where the epidemiological picture, viewed by the daily number of newly infected people, is in the single digits, that's equal or even better than in Slovenia itself. So, as far as tourism is concerned, this problem is easily solved in the case of a real desire to solve it on both sides. Let's not forget that a large number of Croats spend the winter in Slovenia, so the interest in cooperation is mutual.

From your statements so far, it's been easy to get the impression that you're on guard when it comes to British tourists, primarily because of the rather bad epidemiological picture in the UK. Does that mean we’re going to calculate with the British this year?

The decision on border regimes is made by the Government in cooperation with the competent services. Given that they've managed the situation well so far, we have no reason to doubt their assessment. But in some cases one should be careful. As for us in tourism, we're fighting for every guest without any calculation. We're ready to provide a safe environment for everyone, our security standards in all facilities are high and all protocols are implemented. Everyone must be aware that safety is the foundation of success this tourist season and none of the tourism workers can afford to take risks with it.

Should the arrival of tourists be conditioned by a negative coronavirus test?

That's a question for the epidemiologists. We should all always remind ourselves that the result of their excellent work is the fact that we're now in a situation where, among the few in Europe, we have foreign tourist traffic at all. I'd also like to stress that, despite fears that the number of infected people will increase with the opening of the country to tourists, this hasn't actually happened. The increased number of infected people we have at the moment is not due to tourists but exclusively due to irresponsible behaviour and non-compliance with the measures of some of our own residents, and the foci of infection are on the continent, not on the coast, where we have more than 300 thousand tourists every single day.

There was a lot of criticism at the expense of Croatian hoteliers because some of them took money from the state to pay salaries, and then decided not to open their facilities. What's your comment on that?

Any criticism in that direction is unfounded. We currently have 677 hotels and 358 campsites open, and more facilities are opening daily. With the arrival of more guests in July, this trend will intensify and I believe that at the end of the month, almost all of our facilities will be open. After all, as far as the measure you mention is concerned, the aim was to retain jobs and economic operators. All of the criteria, at least as far as HUT members are concerned, has been met.

Do hoteliers have information on what will happen next regarding the Government measures? That is, will you be able to use the option of a 4,000 kuna salary subsidy or will you only have the option of a shortened working week?

There's no doubt that the Government's measures have helped to preserve jobs in the tourism sector. The measures were adopted for a period of 3 + 3 months and we believe that they will be implemented in this way. The main criterion for using the measures is that the income/revenue in the month for which you're applying is 50 percent or lower compared to the same month of the previous year. Who can survive without the help of the state with incomes that are at the level of 20-30 percent compared to last year and still keep all of their employees? In addition, the measure of part-time work isn't suitable for activities that have a distinct seasonality. Given the current announcements from companies in the northern and central Adriatic, there's now a need for new employment in the sector, so we're counting on this measure from September the 1st to April the 1st, 2021, which is necessary for survival until the beginning of the next tourist year.

What is your solution for the survival of the sector?

It's actually quite simple and we've communicated it many times to the media and the Government. Given that the disadvantages in tourism are of such intensity that they endanger the existence of a large number of companies, and thus jobs in the sector, we should focus on two types of measures. The first are measures that maintain the liquidity of companies, and the others are focused on preserving jobs. In terms of liquidity, we need stronger ''pressure'' on domestic sources of financing and lending and a ''fight'' at the EU level, and to preserve jobs we're counting on the aforementioned measure of part-time work, which will be supported by the EU. It is crucial, due to the pronounced seasonality of tourism in Croatia, to ensure these measures until April the 1st next year.

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Veljko Ostojic, the director of the Croatian Tourism Association, sat down to discuss the numbers in southern Croatia, the home of the country's tourist Mecca - Dubrovnik, as well as other popular Dalmatian locations that usually have no issues when it comes to pulling in tourists en masse.

The ongoing coronavirus pandemic has been wreaking havoc with global tourism and Croatia, which relies heavily on the tourism industry which makes up as much as 20 percent of its GDP is far from immune to the extremely negative trends the pandemic has and continues to cause. 

When looking at the numbers of foreign tourists who visited the country this time last year compared to now, there is a lot of reason to be concerned, especially as Croatia's cases of infection with the new coronavirus continue to rise. At the minute, this is among the only upward trends expected.

As Poslovni Dnevnik writes on the 4th of July, 2020, the director of the Croatian Tourism Association, Veljko Ostojic, as a guest on New Day/Novi Dan, said that given the expectations and fears that preceded the Croatian tourist season, he was not entirely dissatisfied. Most of Croatia's current guests are staying in the northern Adriatic, and the least of all are in the extreme south of Croatia, according to N1.

"The situation is different in different parts of the Adriatic. In the north, we're at about 40 percent, in the central Adriatic we're between 20-25, and in the south, we're at 10 or less percent when compared to the same day last year. Happy booking balances for July and August... If nothing radical happens, I hope that the numbers will grow by the end of the season,'' stated Veljko Ostojic.

Veljko Ostojic also noted that there have been 1,720,000 arrivals of foreign tourists to the Republic of Croatia to date, adding that no tourists have been infected with the new coronavirus when staying in commercial accommodation. "We have had several cases of foreigners being infected, but none of them have been infected in Croatia, as far as we know,'' he added.

He pointed out that the situation on the coast is much better than in all countries that have introduced difficult regimes for crossing borders, ie the return of their citizens.

Veljko Ostojic said that prices are defined by each service provider for themselves and are the result of supply and demand. "There are also cases in the north where prices have dropped. Prices to the south are still generally lower, but I can't say that it's something linear and general,''

Family/private accommodation is especially at risk...

Family accommodation is the most affected accommodation category.

''We have over 600,000 beds… A large number of beds will certainly result in reduced demand,” he said. Even in a crisis situation, quality is a priority, so there are more guests in higher category camps.

When asked how Slovenia's decision to make crossing the Slovenian-Croatian border makes it more difficult for Croatia, he said: "Slovenia's decision is reflected in the bookings,'' adding that the move was made primarily as a result of the recent situation in Zadar.

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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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