Croatia’s travel and tourism revival promises to recapture the income level enjoyed prior to the outbreak of war in 1991. Croatia must now realise its long-term strategy of tourism development for the period 2004-2010 to ensure that it attracts the right type of tourist and that the sector grows in a sustainable way.
Travel and tourism last year accounted for 10.6% of Croatia’s GDP generating 139,000 jobs, representing 13% of total employment, according to estimates by the World Travel and Tourism Council (WTTC). However, since the tourism industry influences practically all sectors of the economy, its real impact is considered even greater, with a share of 22.4% of GDP and 27.4% of total employment.
If managed effectively, travel and tourism can be an important catalyst for the development of other economic sectors within Croatia, not least its agriculture sector, which could supply more products to the coast during the tourist season to the nearly eight million visitors staying there every year.
Clean sheet
With record arrivals and a strong season in 2003, Croatia is on track to regain its status as a great tourism centre after nearly a decade lost due to the war. Slow development has helped it to avoid some of the mistakes made by its competitors – excessive construction and over-exploitation of natural resources. The relatively low level of “industrial” tourism and the country’s untouched environment are a major attraction for foreign tourists.
However, if Croatia wants to avoid becoming Europe’s new cheap mass travel destination, more money should be invested in the tourism sector’s infrastructure. This view is supported by the foreign advisers, including McKinsey and Germany’s DEG, which participated in the preparation of the country’s long-term strategic plan on tourism development.
Managing director of the Croatian Institute for Tourism Sanda Weber says: “One of the main tasks in the coming years will be to upgrade and expand Croatia’s hotel infrastructure and carry out the second phase of privatisation with the involvement of professional investors directly related to tourism. We need more five-star hotels in the country, and some recent developments are really promising. The opening of a Radisson hotel in Split, the reconstruction of Hotel Esplanade in Zagreb and investment in top grade hotels in Dubrovnik by Croatian millionaire Garam Strok show the way our quality tourism should move.”
In 2002, Croatia had only 419 hotels with 49,380 rooms, of which four and five-star facilities represented less than 15% – insufficient to meet the growing need for first-class tourist facilities.
Head of the managing board office at the Croatian Bank for Reconstruction and Development (Hrvatska Bankaza Obnovu i Razvitak – HBOR) Maja Juric says: “Croatia should look for higher added value in tourism and support special branches like venture tourism, sailing, offering its unspoiled natural and cultural values to the outside world”.
HBOR has been financing the tourism industry since its establishment, by granting loans for seasonal preparations and supporting family-run tourism businesses. By the end of 2003, it had granted 604 loans for tourism-related programmes totalling e375.4m.
Coastal delights
Croatia’s major tourist attraction remains its 5835km long Adriatic coastline, which includes the Istria, the Kvarner, as well as the regions of Zadar, Sibenik, Split-Makarska and Dubrovnik, offering sun and beach tourism, marine/nautical holidays and a rich cultural heritage.
Croatia has more than 1000 islands set in pristine waters, many of them forming part of natural parks, boasting picturesque small towns and villages that could be better exploited by the tourism industry. Development plans also foresee the more active growth of tourism in Zagreb (cultural and conference tourism), central Croatia and Slavonia, regions with rich cultural heritages, including dozens of medieval fortresses, castles and mansions.
Despite development in recent years, Croatia still has major tasks ahead if it wants to realise its rich tourist resources fully. According to WTTC data, in 2003 in terms of the share of tourism in total capital investments, Croatia, with 11.1%, ranked only 89 in the world and was well behind its direct competitors Greece (22.5%) and Bulgaria (14.1%).
More investment can be financed through joint ventures between foreign and domestic private investors, the central and local governments and the banking industry.
