Hoteliers are optimistic about the tourist season and expect higher revenue by 10% on the year, but the shortage of workers makes them cautious, with 67% expecting inflation and rising costs will grow more than revenue, hence lower profitability and investments.

This, among other things, was said on Wednesday by representatives of the Association of Employers in the Croatian Hotel Industry (UPUHH) and the Deloitte consulting firm at the presentation of a joint survey of tourism expectations in 2023, in which the Croatian Tourism Association (HUT) was also involved, and in March they conducted a survey of companies that manage 297 facilities or 31% of all hotels and campsites in Croatia."Costs exploded last year as well, and this year inflation is continuing and we expect further pressure, as well as a shortage of workers. Investments are strategically important for boosting competitiveness and development, however, 31% of respondents do not plan investments this year, and 49% plan less than before the pandemic, while 20% plan a little more," UPUHH director Bernard Zenzerović said.

Silvija Juričić from Deloitte's Financial Consulting Department, which conducted the survey said that most companies rely on the Croatian Bank for Reconstruction and Development (HBOR) and their own capital for investments, while Zenezerović added that a lot is also expected from funds from the National Recovery and Resilience Plan (NRRP).

He assessed that this was more beneficial to small and medium-sized entrepreneurs rather than large ones, especially for large investments because these funds are still limited and serve for co-financing, which is a good direction, but also for some only "one step."

"For stronger investments, further changes to the legal framework and regulations are needed, as well as the arrangement of issues related to tourist land, maritime assets, investment promotion and others", Juričić and Zenzerović agreed.

Most new workers from Asia, followed by Croatia, wages up 28% in two years

An estimated  60,000 workers are lacking in tourism for this season, said Zenzerović, which is about 10% more than last year and about 20,000 to 25,000 are expected to be hired from Croatia, and the rest from abroad, mostly from Asia, such as Nepal, India and the Philippines. It is expected that some of the workers will be from neighbouring countries, and about 60% of the foreign workers who worked last year in tourism would return again this year.
"Procedures for permits for re-hiring those returnees have been accelerated and that is good, but there is still too much administration that slows down the import of labour, and not only in tourism," Zenzerović said.

He also stated that this year,  98% of employers will increase wages, which have risen by 28% over the past two years in the tourist industry, with the share of wages in costs mostly around 30%, adding that anything above that is not desirable.

Prices are rising, but so are costs

When asked about prices in tourism this year and how much they have grown, Zenzerović said that they are increasing throughout Europe and globally and that hoteliers expect that in Croatia they will increase by up to 10% on average compared to last year.

They commended the government's support schemes to buffer electricity and gas price hikes however, for large hotel companies the measures apply to one facility while they are paying up to three or four times more for other facilities.

(Hina)

 

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