Why are Luxury Hotel Brands Opening in Montenegro and Rwanda but Not Croatia?

By 13 March 2018

As the Australian Financial Review writes about new hotels for the luxury One&Only brand in Montenegro, Greece, Mexico and Rwanda on March 12, 2018, why are the big luxury hotel names so absent in the tourist hotspot of Croatia?

I will confess that the TCN inbox is quite extraordinary at the moment, and I have a feeling that moving our focus from tourism in Croatia to the realities of daily life in this beautiful but complex country is going to take us on an arguably more rewarding journey, both for us and our readers. 

As I widen my focus more regionally after 15 years of living in Croatia, some things begin to fit into place, while others are making me stop in wonder. I had, naively of course, assumed that the basic truisms of life in Croatia were not that different to those of the immediate neighbours, who were all part of the same federal republic until less than 30 years ago. 

2018 has been quite an education so far... 

And the more we spread our wings and write about real topics beyond the tourism fluff, the more I realise how much people read us in the region, and how perhaps - just perhaps - there is a chance to make that small difference. I smiled today as a friend told me about his Croatia Airlines flight from London to Zagreb, of how he got talking to the Croatian student sitting next to him. Complete strangers until they met on the plane, within 15 minutes, they were discussing Voices from the Asylum and the new TCN direction. 

Even more encouragingly, the level of communication from readers to our articles has increased significantly in recent weeks, and this seems to increase the less we write about tourism and the more we write about real issues. One case in point was the recent Lessons from Montenegro: Why Lustica Bay Will Never Happen in Croatia, a story which made the inbox especially fruity when published. 

It also led to several meeting requests from investors, fund managers and a host of other people.

Which is how I found myself in the pub in Zagreb last week with a very nice fund manager who I will call Ivan. I liked him immensely, and not just because he bought the beers. He was candid, open and had a lot of knowledge about the Croatian and Montenegro property markets over the last 15 years. 

His fund decided to invest in The Beautiful Croatia, and to cut a very long story short, they acquired two prime sites back in 2006, of about 20,000 and 70,000m2. Both excellent plots, both well-researched . Ownership was obtained.

(Fast forward what has (not) happened in the intervening years). 

"Anyway, we are very close - a couple of months I think - on getting the construction permit on one of the projects, so we can finally start to build."

"Cool," I replied, and I meant it, reaching for my cold one. "Exciting times for the project." Conditioned by 15 years in Croatia, this story was actually proceeding quicker than most. 

But then, as the refreshing Pramen hit the back of my throat, I coughed quite violently internally. 

Wait! WHAT?

For after 15 years of living and writing about the asylum, I had recently been to Montenegro on day release and seen how things work in other countries. 

TWELVE years and the first construction permit is ALMOST ready. 

And, after living here for so long, it actually felt like progress. I am beginning to realise that my reactions to things have been (understandably) conditioned by my surroundings over the last decade or so, and I (and, I suspect, the majority of others who inhabit this great land with me) have come to consider this as normal. Twelve years for a construction permit? The Norwegians, with their 80,000m2 and 270 million euro project on eastern Hvar, are green with envy - they don't even own the land yet, but they are only eleven years in. 

As often happens with writing online, once you start writing about a topic, it comes at you from all sides. A recent article in the Australian Financial Review focused on the new luxury hotels from One&Only being opened in Montenegro, Mexico, Greece and Rwanda. But not Croatia. The latest luxury brand which is launching elsewhere. But not in Croatia. 

Montenegro and Rwanda - two buzzwords for me and my relationship with Croatia, but for very different reasons. The ongoing investment in Montenegro I have covered in the article above (as well as a comparison between Croatia and Montenegro, regarding major tourism investments).

Rwanda is more personal to me, as I lived there in 1994, arriving just two weeks after the genocide which killed 11% of the population, some 800,000 people, in just 100 days, a genocide which followed another just over thirty years before. Of those who survived, when I left in March, 1995, some 115,000 people were crammed into the inadequate prison space on genocide charges. And with just two judges spared the slaughter of the intelligentsia, it would have taken perhaps 100 years to process them all. If ever there was a case of a country beyond repair and filled with irreparable ethnic hatred, surely this was it? One of the poorest countries in the world before things kicked off, and landlocked in central Africa, the future was not so bright at all. 

And although it would be hard to argue that Rwanda was a true democracy in 2018, it can very much be argued that it is a clean, safe and vibrant place, the IT hub of central Africa, a destination which - unlike Croatia - is attracting luxury hotel brands such as One&Only. In fact, international media is even explaining things such as Why Rwanda is the Next Luxury Hotspot.

Rwanda, not Croatia. 

I want to be clear that I am not comparing Rwanda to Croatia, for I know that would not be welcome, and the Lustracija Brigade in Melbourne would start sending their death threats again, I mention Rwanda more as an example of a country with genocide in its genes, and what it has achieved in just 24 years. Montenegro, with less coast and attractions than Croatia, and what it has achieved in the last decade (let's put the start of Porto Montenegro - a project which would have come to Croatia had certain people not been too greedy - as Year Zero) compared to what has happened in Croatia. Heck, my generous fund manager who bought me those beers acquired his projects before Peter Munk bought the Porto Montenegro site. Could the difference between Croatia and Montenegro be any starker?

Or Croatia and Greece

Or Rwanda?

Of course, with full public government support in Croatia, things should move along quickly, no? I have been fascinated to watch progress of the Four Seasons Brizenica Bay project in Stari Grad on Hvar, the biggest name yet to come to Croatia. I think the project is fantastic and it will do much to bring the luxury tourism to central Hvar, at a time when Hvar Town has sold itself to party dollars. And the official public words are very promising indeed, as we have enthusiastically reported.

An official press release from Four Seasons in March 2016, two years ago, officially announced the project (the land was purchased in 2008), with an opening date of luxury hotel and villas set at 2019. In April 2017, Croatia's Minister of Tourism, Gari Cappelli, who is fond of big announcements, endorsed the project, said some nice words about what it all meant, and the 2019 date was mentioned again. In June 2017, I was part of an entourage which took a specially chartered train from Zagreb train station to Sesvete, a little to the east, and then transfer to a warehouse facility where a rather impressive mock-up Four Seasons hotel room had been constructed. It was a wonderful evening and Minister Cappelli was there again, talking of the importance of this billion kuna project, full government support, etc etc. The wine was very nice. 

2019 is less than 9 months away. Not a single foundation has been laid, for the project still does not have a building permit. The summer building ban will come into force soon, and so even if the permit does come, the reality is that construction will not start until about October. 2019 opening for the hotel, let alone the villas? Zero. 2020? Are you a betting man?

This is a billion kuna project with the biggest hotel name to come to Croatia, with the full public support of the government and STILL there is no construction permit. Perhaps now I should be cheering with my beer-drinking fund manager above, with the imminent arrival of a construction permit after 12 years with no public government endorsement. Impressive stuff!

Things ARE moving forward with the Four Seasons, and I still think it should happen. In my interview with the Stari Grad Tourist Board director last week, she confirmed that a location permit had been obtained. I hope it moves forward, and I wish them well. 

But why IS Croatia so fucked? And being so fucked, is it time to admit it and look at ways to move forward before it really is too late? EU accountability, the arrival of technology - from Uber to blockchain - will play their part in eradicating some corruption, but the system needs to be addressed to deal with this ridiculous situation where a 12-year wait for a permit is greeted with any kind of enthusiasm. 

Although I am sure my view of Montenegro will appear through rose-tinted glasses to some (it isn't, I am very aware of the issues there, but it truly does feel like Switzerland after Croatia), one conversation last week got me thinking. A major foreign investment was approved there and the government promised to help with the permits. And they did so in style, rounding up officials from the various authorities involved in the permit - planning, water, electricity etc - and put them together in a complex until they had hammered out all the issues and produced a permit. I am not sure how long it took, but I am pretty sure it was less than the 12 years needed by my drinking partner in Zagreb last week.