In the first eight months of 2018, leading Croatian hotel and tourism companies generated 5.4% higher operating revenues on the year and most expect 2-6% more bookings for the post-summer season, Croatian Tourism Association (HUT) director Veljko Ostojic said on Tuesday.
He was speaking at a press conference at which he presented the HUT's "Tourism Impulse Q3 2019" bulletin, which brings analyses, projections and trends in the sector.
Ostojic said the operating revenue increase was a result of additional promotion and investment in quality, which facilitated higher prices and a higher occupancy than last year.
This year through September 24, nights went up 2% on the year and the number of beds went up 6% (+67,000 beds), he added.
The number of beds in private accommodation increased by 35,700 and of those in non-commercial accommodation by 36,000 and together they make up the bulk of accommodation facilities, which structure is not optimal for overall tourism results, notably for consumption, as hotels bring more in terms of revenue, he added.
Between 2010 and 2019, the number of private beds for tourists increased by 444,600, the equivalent of 1,112 new hotels, Ostojic said. Imagine what Croatian tourism and its offer would look like if there were that many more hotels, he added.
This does not mean that hoteliers and the HUT are against private accommodation, but it is necessary to distinguish between renting properties to tourists as an additional activity and providing private accommodation in which one invests and markets, Ostojic said.
Consultant Sanja Cizmar said there should be tax equality and equal conditions for all accommodation providers on the market. Ostojic said private accommodation should exist but that it should be regulated better.
He said an analysis of short-term real estate renting to tourists in Croatia showed nearly 237,000 listings on the Airbnb and HomeAway websites at the end of July, a 12.4% rise in rentals and a 6% increase in the average price, €114 per accommodation unit. Seventy-one percent of the listings were for single or double rooms, mostly in Dalmatia and Istria, with a 60% occupancy rate, 2 percentage points more than last year.
Revenue from those rentals between August 2018 and July 2019 reached €2.03 billion, Ostojic said, adding that this type of accommodation was being increasingly regulated and equated with commercial rentals "and Croatia too will have to do something about it."
As for expectations of the VAT reduction in hospitality to 13% as of next year, he said Croatia lagged behind the competition where the rate was 10% or lower. "The problem is that the new rate applies only to food preparation and serving in restaurants and not to food as such, which means the rate is selective," he said, adding that "it won't bring more than HRK 1 billion into the state budget but 500-600 million."
Twenty-six of the EU's 28 member states have a special VAT rate in hospitality, which underscores the importance of this measure whereby states help the development of an industry which has a high employment rate and contributes to GDP and economic development, Ostojic said.
(€1 = HRK 7.4)
(Hina/FaH)
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