February the 27th, 2021 - What awaits Croatian hotels and how are they preparing for the upcoming tourist season this summer as investments were forced to a halt by the coronavirus crisis in 2020?
As Marija Crnjak/Poslovni Dnevnik writes, although the fourth quarter has been a period of cost generation for tourism companies across Croatia in normal, pre-pandemic years, in addition to revenue, in 2020, as expected, all records were broken, in the sense of them all being in the red.
However, thanks to state measures, moratoriums placed on loans and the like, Croatia's leading large tourism companies have managed to maintain the stability they need to realise the season ahead. Annual results for 2020 show that, although everyone has shelved most large investments and postponed them for better times, some investments have been completed or will be on the eve of the 2021 summer season. Croatian camps had the highest turnover last year, which affected the average price and profitability, and the best turnover was achieved by the premium segment, with Rovinj standing out in that regard.
When it comes to Croatian hotels and those which dominate, throughout 2020, the Valamar Riviera Group generated total revenues in the amount of 697 million kuna, a mere 31 percent of the total revenues the company generated in the record year of 2019. Despite unfavourable business circumstances, the group generated 2.3 million overnight stays and positively adjusted the EBITDA in the amount of 126 million kuna in 2020, but ended the pandemic-dominated year with a total loss of 359 million kuna, unlike the year before in which they had profit of 306 million kuna. Valamar's net debt increased by 29.9 percent in 2020, from 2.19 billion kuna to 2.85 billion kuna.
For 2021, the Supervisory Board of Valamar Riviera approved investments in the amount of 132 million kuna intended for the finalisation of previously planned/started investments (more precisely in the Istra Premium Camping Resort and accommodation for employees down in Dubrovnik), the completion of the first phase of investments in Valamar Pinea Collection Resort and the digitisation projects, investments in the maintenance and preparation of future projects. Reduced investments planned for 2021 are focused on the completion of started projects and the preparation of projects for new growth and development when the conditions are right.
The Supervisory Board of Imperial Riviera, which includes Croatian hotels in Makarska, Rab and Porec, approved investments in the amount of 41 million kuna and are primarily focused on the completion of investments in their hotels in Makarska and in Porec. This company had 90 million kuna in sales revenue last year, which is almost 65 percent less, operating profit amounted to 23.2 million kuna, which is a decrease of almost 75 percent, but excluding the effect of state aid received in order to preserve jobs, as well as various concessions, the EBITDA remained positive. The group's net loss amounts to -39.7 million kuna.
Maistra, including Dubrovnik's Hilton Imperial, recorded 45 percent of sales throughout 2020, with 41 percent of sales of goods and services. Segment analysis shows that in 2020, camps performed 9 percent better in terms of the number of units sold than the Maistra average stood at. In the period from June to September, when business able to be done without significant restrictions due to the country's epidemiological measures, the best sales compared to last year were achieved by the luxury hotel segment in Rovinj.
The management of the Arena Hospitality Group, known for its Croatian hotels and hotels abroad, has especially pointed out in their report on the matter that they are financially ready for another challenging year.
''Our financial position is still strong, amounting to 425.6 million kuna as of the 31st of December 2020. The various analyses we have conducted can ensure that the group has sufficient funds to be able to withstand uncertain operations throughout 2021, while market conditions are not stabilising,'' they stated from the company, whose pandemic revenue was slashed by 69.4 percent last year to 238.3 million kuna with an EBITDA loss of 18.3 million kuna, compared to a profit of 229.5 million kuna in pre-pandemic, record 2019.
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