May 18, 2020 — The Croatian government hopes travel-hungry Croats and foreigners within driving distance will salvage what’s left of its summer tourism. But where does that leave Dubrovnik, a destination dependent on flights and cruise ships?
Over 14,000 travelers entered Croatia since its borders opened on May 9. Locals flocked to destinations like Plitvice Lakes National Park, exploiting a lack of tourists to monopolize the bucolic waterfalls.
Dubrovnik, meanwhile, sat empty.
Not because of the coronavirus. It’s been 11 days since the city’s most recent infection.
One can’t blame a lack of investment either, which keeps rolling in. The Tourism Ministry announced about HRK 400 million investment in six hospitality training centers, including HRK 72 million injection for the Dubrovnik School of Tourism and Catering.
It’s not for a lack of irony either. The city’s Lazarettos, the mythical birthplace of the “quarantine”, reopened for tourists.
Dubrovnik now finds itself imperiled by the one trait which has kept it whole all these centuries: geographic isolation. Too far to reach by car, and perhaps too familiar to the locals within driving distance, it hasn’t benefited from the Tourism Ministry’s efforts. A cut in budget airlines and higher-priced international flights, and the virtual lockdown on cruises, leaves the coastal magnet unreachable to the millions of guests planning to visit.
The Pearl of the Adriatic won’t relive its halcyon days as the poster child for “overtourism” (unless you count a Marin Čilić sighting as recompense).
But a dearth of tourists is more than just a budgetary hiccup. Dubrovnik, much like the rest of Croatia, depends solely on the travel industry. It funds about 70 percent of the city’s budget directly, and the remaining 30 percent indirectly. There is no “rainy day” economic branch shoring up Dubrovnik’s finances or employing a segment of the population. The Pearl of the Adriatic produces nothing and exports even less.
Dubrovnik Mayor Mato Franković sees the season as a total loss. Early forecasts of a 70 percent drop now seem optimistic. So he has a plan: survive.
Survive just enough to come back next year.
Nobody said it was an upbeat plan.
He outlined the city’s current state, its lack of hope for this year, and plans for next year in an extensive interview in Jutarnji List.
You announced that there are three scenarios in the city for this year's season, is it already clear which of them is the most likely?
I think that the most likely, unfortunately, is the one in which the tourist season won’t take place until April 2021, because crumbs await us in the current year. Our goal this year is to achieve up to 30 percent of last year's season, so even those crumbs will still be enough for us to survive until next summer. Not only for the city administration but the entire tourism sector.
However, according to our projections, that 30 percent is an optimistic scenario, which is why we are already working intensively on contacting airlines, offering them the possibility of subsidizing their flights to Dubrovnik, because I am convinced that all other air destinations will do the same.
The messages coming from the world's airlines are that they themselves will not activate more than 30 to 40 percent of capacity, so it is crucial for each destination to have a direct flight, and then especially for Dubrovnik, where air guests make up 90 percent of the total.
This does not include cruise guests and one-day guests, who are unlikely to be here this year, especially after the news that TUI's ship has an entire home port. According to everything we see, cruisers do not expect to start operating before January 2021.
Well, the people of Dubrovnik were already complaining about the cruise guests, so it could be good for some.
No, that's not good at all because we finally managed to establish a scenario in which there are no crowds in the city or more than two cruisers at the same time. Just when we achieved that, the whole story turned upside down. Dubrovnik needs both, but with moderation.
Speaking of air connections, Croatia Airlines has re-established domestic traffic to reduce it after only three days due to a lack of passengers. That doesn’t really sound encouraging to your city?
No, it doesn't sound optimistic. I have to admit that I expected the national carrier to make a little sacrifice, regardless of the situation the company is in, because as a carrier it must be the backbone of connecting tourist destinations, especially Dubrovnik, with the rest of the world. I think that the company should have made such decisions in agreement with the city and the competent ministry. This move is not right, especially considering that we expected a partnership from it.
I think we will very soon see how important it is to have a domestic carrier, because we cannot depend on Lufthansa, British Airways and others. If we have our own operator, then we need to invest more money, maybe even consciously enter into a loss, especially in a situation where the state would benefit from it in the long run.
Namely, we currently have a line from Frankfurt and that is now the only way for foreigners to come to the country. I guess it was not profitable for Croatia, but I hope that at the moment when the EU opens, the national operator will introduce regular lines and that there will be interest in them. Namely, I know from conversations with hoteliers that no one has canceled our reservations for July and August yet.
This, of course, does not mean that they will not be canceled later, but for now it still gives us hope. Our key markets are the United Kingdom and the United States; these are guests who come to Dubrovnik. Both are severely affected by the coronavirus, so this is an additional problem in the organization of the season.
Last year, the first direct line between Croatia and the USA was introduced on the route Dubrovnik - Philadelphia, but I guess it should not be counted on in the near future?
Yes, it was also well-filled. For this year, 70 percent of the capacity was sold out in advance, which means that we should have recorded great results from that market. Unfortunately, all this has now been canceled and it is unclear what the future holds for us on this issue.
As a city, we will co-finance airlines to come to our city, and the plan is for the city to borrow for that purpose. We are in intensive negotiations with British Airways, Jet2com, and Croatia Airlines.
We have already offered this possibility and we are currently working out the financial parameters on how to sort it all out. We received information that the Croatian National Tourism Board is ready to help us because everyone is aware that no destination will be damaged like Dubrovnik. My thinking is that between 10 and 14 million kuna should be invested by the end of this year in order for the flights and guests to come. We are ready to take out a loan to achieve at least one season, but that will, of course, mean that we will have to ‘shorten’ the funds somewhere in order to sort it all out. Tourism funds 70 percent of our budget, the rest is also income from tourism, but indirect, and when that money suddenly stops coming, it is clear to everyone what is happening next.
Where you will have to cut the costs?
In the new drafting of the supplementary budget, we stopped everything that was possible. All projects except those current and those financed by the European Union.
We had more than 40 projects in the pipeline, but we will not be able to get into them. We must be aware that by the end of this, and perhaps 2021, there will hardly be any serious major project funded by the city.
We continue with infrastructure projects related to agglomeration, such as water supply and drainage. We are building as many as 30 kilometers of sewerage network, and the project of the Lapad coast, which is financed by the European Union, continues. The project of building a road from the Franjo Tuđman Bridge to Pobrežje, worth 30 million kuna, is also planned, and we are also building the first primary school since 1975.
The messages from the Ministry of Tourism are that this year's season will depend on domestic guests. Do you agree with that?
It is difficult for me to say that. We are too small a country to be able to rely on our own capacities. I think that this is an impossible mission and that nothing will happen there. These are empty wishes.
Nevertheless, I am convinced that, at the moment when international lines are re-established, there will be interest in Dubrovnik.
What is the City's plan for establishing tourism? Apart from subsidies to air operators, how else can it participate?
We have prepared a whole package of discounts. We will go with lower prices in museums and reservations, then with special free programs for guests. In addition, we are working on a cultural program in which we will organize free concerts and classical concerts of our symphony orchestra once a week. On our “Dubrovnik card”, we will offer guests a 50 percent discount on bus transportation.
So there will be events, there will be summer games, but we would like to organize international programs that could also be a reason to come to Dubrovnik. I can’t tell you specifically, but we’re arranging to host one of the world’s biggest music stars for this year, but we need to sort out the financial construction first. Of course, the plan is to lower the price of visits to the walls, as well as Lokrum.
So you, like Minister Cappelli, think that ticket prices for the walls must fall?
Of course. I clearly told the leadership of the Society of Friends of Dubrovnik Antiquities that they will not decide, but the City will decide on the price policy because the City is above the Society, and it must listen to what it commands instead of implementing its own policy.
Well, there are conflicting opinions. Some say that a lower ticket price for the walls won’t attract guests anyway, so then why lower it?
It is necessary to do it in terms of marketing. People all over the world have not given up on travel, so I think it is a good opportunity to tell guests that Dubrovnik will now be more beautiful, a city without crowds and with measure, and if the price correction is another reason to visit, why not?
In addition, the policy of raising ticket prices for the walls and Lokrum was conducted as an attempt to reduce the pressure of visitors to these locations. As there will be no such pressure now, the prices should be corrected as well. I believe that the association will do so.
Speaking of prices, Dubrovnik is already criticized for too high prices. Do you expect reductions from caterers and hoteliers?
It is clear that in entrepreneurship the price is generated by supply and demand. I believe that there will be corrections here as well, because everyone will try to grab at least something from this season, so they will also give discounts in order to attract guests. I repeat, no one expects a good season. We are working for crumbs and preparing for 2021.
What do hoteliers say, how much capacity will be open this year?
Valamar will probably open only two, Lukšić also two at most. The Hilton is currently open, but I estimate that a total of five to six facilities will be open this season, so it will be like in our classic winter mode.
In its guidelines, the European Commission recommends that destinations that plan tourism this year must have sufficient hospital capacity, rapid tests, etc ... Is the City preparing in this regard as well?
We are 100 percent ready. Two weeks ago, we bought a new serological device with which we can finally test people in the city. The hospital is ready. We will soon have five new respirators, and by the end of June five more, which will have the most respirators per capita nationwide.
When it comes to hospital beds, we are fully equipped, we also have an additional hospital in the Student Dormitory, which we dismantled, but, God forbid, we can re-establish it within a week. However, at last week's meeting, I suggested to the Prime Minister that it would be good to condition the entry of guests into Croatia with a negative test for COVID-19, which is in line with what Greece announced last week. This gives us a little more security and the ability to reduce the potential threat. The Prime Minister was positive about that idea, so we'll see.
You mentioned Greece. It is interesting because it is also an air destination, and considering that the whole country has as many patients as Croatia, we can say that the Greeks have managed to preserve the ‘corona-free’ image even more successfully. Will they be a threat to Dubrovnik?
I wouldn't say a threat, but the competition for sure. We will continue with the advertising measures. I think we have a hit advertising model, so we are preparing a short animated film that will be shown on CNN and the BBC, and which will tell the story of Dubrovnik as a city that was the first in the world to have quarantine and already in the time of the Dubrovnik Republic learned to deal with difficult situations.
Everyone will, of course, in this situation try to make the most of their advantages, although I must say that our competitors like Italy and Spain are still in much bigger trouble than us.
Should the state, if it wants to help tourism and domestic guests, lower toll prices?
That would certainly be good and I hope it will happen. Everyone expects a lot, but we need to follow some pace and solve problems one by one. Now it's finally time for reactivation. I believe that it is on the table and that it will certainly be discussed, although for Dubrovnik, which does not have a kilometer of highway in its county, it does not matter. However, that would be good for domestic tourism, and even for [the state road authority] “Hrvatske Ceste”, if necessary, to borrow.
You commented in an interview that you do not understand how Dubrovnik caterers, who have been boasting record seasons in recent years, managed to spend all the money and as soon as the crisis arrived, be in trouble?
I will say clearly: when you have successful seasons 2019, 2018, 2017 and so on and when after each you say it is a record, you buy boats, cars, planes and apartments, we are happy because a man is able to afford it. But when these same people, as soon as the crisis knocked lightly on the door, immediately ask for forgiveness of debts and dismiss me, it is extremely rude and hypocritical to me and it completely threw me off balance.
But well, the situation has calmed down, we have agreed to lower the rent by 50 percent for April, May and June, and we have forgiven 70 percent of the public space fees for those months.
In addition, for the following months, until October, we have agreed to see how the season develops and, depending on that, continue to charge. I didn’t want to sit on the backs of the caterers, but I felt that in times of health threats they had to bear part of the burden because they, unlike the City, could save, put aside and prepare for the dark days. I think that people should still be more socially sensitive, that they should think about health first, and then about money. It is easiest for us politicians to forgive everything, then everyone loves you and you are the best in the world. I'm not that kind of man.
