Wednesday, 18 September 2019

Minister Says Tourism Season, Year Excellent

ZAGREB, September 18, 2019 - Tourism Minister Gari Cappelli said in parliament on Wednesday that the results of this year's tourism season and the year overall were excellent.

Financially, we will reach last year's 12 billion euro and will have a 3-5% increase, he said during question time, adding that arrivals would be almost 5% higher than last year and nights by about 2%.

In the first six months of the year, there was an increase of 6%, between 3 and 4% in the peak season and, judging by announcements, we expect a 3-4% increase for the remainder of the year, Cappelli said.

He dismissed Social Democratic Party leader Davor Bernardić's earlier statements that the tourism season had "crashed", saying the government had taken a serious approach to the industry.

Justice Minister Dražen Bošnjaković spoke of Kristian Vukasović, an 18-year-old who died while serving a prison sentence. We are waiting for the autopsy report, which will reveal the cause of death, he said.

Speaking of judges' declarations of assets, Bošnjaković said his ministry had created an app for their publication and that talks were under way with the Croatian Personal Data Protection Agency to align protection rules.

Željko Reiner of the ruling HDZ asked Economy Minister Darko Horvat to explain the impression in the public sphere that everything was bad, that the economy was unsuccessful and that people were increasingly poor, despite "data showing salary and pension growth and the creation of more than 100,000 jobs."

"This year, and especially next year, will be a struggle for better living standards for the little man, and I as minister of the economy have no right to be despondent," Horvat said.

More news about Croatian tourism can be found in the Travel section.

Friday, 9 August 2019

VIDEO: Fire Breaks Out at Famous Kockica Building in Zagreb

August 9, 2019 - On Friday afternoon, the popular Kockica, a ten-story building on Prisavlje, caught fire in Zagreb, the Zagreb fire officials confirmed to Jutarnji List

Photos published on social networks show a thick black cloud of smoke over the building. Firefighters arrived at the site very quickly and went to work extinguishing the fire.

The building, which is protected as a cultural property of the Republic of Croatia, was built in 1968, where it was the seat of the central committees of the Union of Communists of Croatia and the Union of Youth of Croatia and the Main Board of the Socialist Union of the Working People of Croatia.

Today, the building houses the Ministry of Maritime Affairs, Transport and Infrastructure and the Ministry of Tourism of the Republic of Croatia.

However, the State Secretary at the Ministry of Tourism confirmed their part of the building saw no damage. 

“Do not worry. There is no fear or damage to the Ministry of Tourism! It is on the facade of the building where the safety netting was ignited. Although it looked ugly, the damage was minimal and the fire did not even enter the building thanks to our firefighters, who naturally extinguished the fire in just a few minutes,” said Tonči Glavina on Facebook. 

More soon. 

To read more about news in Croatia, follow TCN’s dedicated page

Wednesday, 24 July 2019

Cappelli: It's Time for Tax Changes in Tourism Industry

ZAGREB, July 24, 2019 - Tourism Minister Gari Cappelli on Wednesday said that it was time for tax changes in tourism and recommended a VAT rate of 13% on food and beverage services to be part of the fourth round of the tax reform.

"I've been asking for that from day one," Cappelli told reporters ahead of a government meeting.

He informed that he is calling for a VAT rate of 13% on all food and beverage services and added that it was time for that to occur in the fourth round of the tax reform.

Asked whether that would lead to lower prices, Cappelli said that VAT is not the only problem and that the entire tax reform needs to be observed. He said it was time for "tourism to feel an additional step in the fourth round" of the reform and that it was necessary to improve quality and increase wages to make tourism more competitive.

He recalled the recent reduction of VAT on food and accommodation for personnel who work outside their usual place of residence.

"I think that it is time for an extra step, either through personal income or VAT, which would create the opportunity to increase wages and for tourism to start breathing in that segment," he said.

Asked to comment on some cases of "rudely high prices," Cappelli said that the state would not intervene in that but that these cases were not good.

"I'm reading about what is going on. Gone are the times when you could make easy money in a month or two. Tourism has become real business," he said.

Asked whether it was time to discourage apartment-style accommodation, he said 70% of apartments had 3 stars and that he would insist on a reclassification and for quality to be improved.

"They won't be ruined but they will get the message: improve your quality or you will have to shut down," he said.

The Croatian Tourism Association said it welcomed the possible reduction of VAT on tourism products, adding that it would enable the necessary investment in better quality as well as higher salaries.

More news on the Croatian tourism can be found in the Travel section.

Tuesday, 23 July 2019

Tourism Minister: SDP Has Confirmed That I Am Right

ZAGREB, July 23, 2019 - Tourism Minister Gari Cappelli commented on the press conference by the opposition Social Democratic Party (SDP) on Monday, saying that they confirmed what he himself had been saying, that a VAT cut would help the Croatian tourism industry.

The SDP said earlier in the day that increased wages and investment in quality tourism facilities and services, along with a reduced VAT on hospitality and accommodation, were strategic objectives for the tourism sector.

"The SDP said at the press conference what I have been saying about the need to increase the quality and about too many facilities that are not good. They did me a great favour by confirming everything what I have been saying and that I am right," Cappelli told reporters before a meeting at government headquarters.

Asked to comment on the SDP's demand for a lower VAT on hospitality and accommodation, he said that a fourth round of tax cuts was being prepared and that this matter would be given consideration.

Cappelli said that a VAT reduction would help Croatia in relation to its competitors, recalling that he had said last year that this year Croatia would be "on the edge" of last year's tourism results, which he considered "a huge success".

Reporters also asked Finance Minister Zdravko Marić about the SDP's demand, and he said that a fourth round of tax changes was in the pipeline and that specific measures would be announced in the coming days.

More news about Croatian tourism can be found in the Travel section.

Monday, 22 July 2019

SDP Calls for Increasing Quality in Tourism Sector

ZAGREB, July 22, 2019 - The Social Democratic Party (SDP) said on Monday that increased wages and investments into quality tourism facilities and services, along with a reduced Value Added Tax (VAT) on hospitality and accommodation, were strategic objectives for the tourism sector because value for money was important to tourists.

"Our efforts in the tourism sector have to be directed at improving quality because people working in tourism are warning that all those who have invested in quality over the years are not experiencing any problems with occupancy," SDP MP Branko Grčić, the author of the party's proposals relating to the tourism sector, told a press conference.

Improving the quality of tourism facilities and services has to be the number one priority, he added.

He is concerned about attempts to compensate the shortage in demand by raising the price of services, saying that this is wrong because it could later cause additional problems in the tourism sector.

It is essential to see if data on the number of tourists indicate negative trends and what estimates of the real financial effect of the tourism season will be like, Grčić underlined. He added that emphasis however should be on the number and quality of services provided and consequently on the revenue generated.

"The most important thing for our guests is 'value for money', and whether they are getting the services they deserve for the money they are spending in Croatia," he said.

Grčić reiterated that the SDP wanted the government to reduce the 25% VAT on hospitality, which is the highest in the EU, to 13% and see if there was any room in fiscal policy to cut VAT on accommodation next year or the year after that from the current 13% to 5%. He added that this does not mean that prices should be reduced but for wages and investments in tourism to be increased.

He noted that a similar thing had occurred in 2013 when VAT was reduced to 13% and that in two years' time the number of those employed in tourism had increased and that revenue and investments doubled.

Grčić called on Prime Minister Andrej Plenković to refrain from reducing the general VAT rate from 25% to 24% because that would be throwing money away if the effect is not felt in one's pocket while that money could be more effectively used.

"Once again we reiterate, let's help the tourism sector to be more competitive, so that it can increase wages for its workers and be in a position to further invest in quality," he said.

The head of the SDP's Pula branch, Sanja Radolović, recalled that when France and Germany reduced their VAT rate that had a positive effect, directly contributing to new jobs being opened and increased investments in hotels. She said that it was necessary to discuss reducing VAT with large hotel groups so that they increase net wages by at least HRK 2,000.

She also recommended reinstating the dual education system in tourism and hospitality schools where students attend classes for half the year and then do practical work in the second half of the year and during the tourism season through student contracts with future employers.

"At that time, we did not have a problem with a shortage of workers and that is a demand that we will address to the Ministry of Science and Education," she added.

More news about Croatian tourism can be found in the Travel section.

Tuesday, 9 July 2019

Tourists Visiting Croatia Generate 3% More Bed Nights in First 6 Months

ZAGREB, July 9, 2019 - In the first six months of 2019, almost 6.9 million tourists visited Croatia and generated 26.2 million bed nights, which were increases of 6% and 3% respectively, compared to the same period in 2018 and all indications in tourism are good, Tourism Minister Gari Cappelli said on Tuesday.

"The first six months were positive in tourism and it is important that in the first three months foreign tourists alone generated 25 million euro more in revenue than for the same period in 2018 and that is in the pre-season when prices are lower," said Cappelli, who along with the director of the Croatian National Tourist Board (HTZ) Kristjan Staničić, held a press conference to present the January - June results in tourism.

Noting that official indicators still foresee that the year will conclude with an increase of 2 or 3 percent on the year, Cappelli underscored that he is not worried about the summer season either and particularly not with the post-season considering that that autumn already has good bookings. He said in those places where there were more investments in improving quality, the results and fullness are improving.

He considers that physical numbers (arrivals and bed nights) are important even though revenue is more important.

"Based on the Tourism Strategy to 2020, we have come close to physical numbers but we still haven't achieved the foreseen 14 billion in revenue for 2020, however we are somewhere in the vicinity of 12 billion euro. We will see how the entire year will end and in 2020, I believe that along with quality we can come close to that," he said.

Staničić said that the top 10 markets in the past six months were led by Germany, Austria, Slovenia, UK and Poland, which along with the Czech Republic and Slovenia, were the only three countries to record a decrease in Croatian tourism in H1 this year.

More tourism news can be found in the Travel section.

Tuesday, 28 May 2019

Meeting of UN World Tourism Organisation (UNWTO) Taking Place in Zagreb

ZAGREB, May 28, 2019 - A meeting of the UNWTO Commission for Europe (CEU), which is taking place in Zagreb on 27-30 May, was formally opened on Tuesday morning by Prime Minister Andrej Plenković who described the event as a compliment to Croatia and its tourist trade.

The meeting, which is taking place in Zagreb for the second time, has brought together representatives of more than 40 countries and Zurab Pololikashvili, the Secretary-General of the World Tourism Organization (UNWTO), who praised Croatia as a good example of the development of the tourist sector and of the whole country.

Plenković said that Croatia's National Tourist Board would open its office in Madrid where the UNWTO main offices are located.

As for the Croatian tourism sector, the premier spoke about a shift to sustainable tourism, and added that more and more efforts were being made to develop the tourist trade in the interior of the country, notably in the eastern region of Slavonia.

He said that during Croatia's chairmanship of the European Union in the first half of 2020, Croatia would organise a meeting of EU tourism ministers in the country.

Addressing the event, Mayor Milan Bandić spoke about Zagreb's tourist results in recent years.

Bandić and Tourism Minister Gari Cappelli, who are the hosts of the 64th meeting of the CEU, underscored the importance of Croatia's cooperation with the UNWTO. Cappelli said the UNWTO was an important partner to Croatia in many international projects.

More news about Croatian tourism can be found in the Travel section.

Thursday, 18 April 2019

''Business Model of Croatian Tourism is Unsustainable''

As Lea Balenovic/Iva Grubisa/Novac writes on the 17th of April, 2019, Croatian tourism's current business model is unsustainable and has some serious challenges, according to Emanuel Tutek, a partner at the Horwath HTL consulting house, who stated this at the very beginning of a conference on the challenges of the Croatian tourism sector at Edward Bernays High School, the co-organiser of which was Jutarnji list.

Since 19 percent of Croatian GDP comes either directly or indirectly from tourism, the unsustainability of the system is a more serious issue, he added.

''First of all, our tourism is an extremely seasonal sector and as much as 86 percent of all tourism activities in Croatia take place during the summer months. It's also problematic that 96 per cent of these activities are realised on the coast and in Zagreb. In translation, this means that we have plenty of room for progress and the development of our tourist offer across the rest of Croatia, as well as the extension of the season. We are well below the European average. For example, if we compare just the peak of the tourist season, ie July and August, there is 10 to 20 times more of a burden on the area and the residents in Croatia than there is in other European countries. Just remember how some of the destinations and beaches look in July or August,'' warned Tutek.

He also added that Croatia has plenty of room for progress and development in the quality of the accommodation it provides. The Croatian hotels that, as Tutek says, are the pearl of Croatia's hospitality, are very much losing the battle with the hotel industry in the rest of Europe, and the alarm that should be enough to wake the country up is also the fact that the revenue made from tourists' overnight stays in Croatia is less every year.

In addition to this, Croatian tourism is feeling the country's ongoing demographic crisis bite hard, and has a human resource problem as a consequence. This is, as was explained by Tutek, actually a global problem. However, since the international labour market is far more competitive than the Croatian one is, foreign countries are filling their gaps with Croatian workers. Croatia is, unfortunately, at an unimpressive 100 of 138 countries in the world according to the labour market competitiveness index. An even more concerning piece of information shared by the Horwath HTL consultant was that Croatia is the last and second to last in the world on the ladder of attracting and retaining workers.

''We have no solution. The answers to this can't just be some lump sums and other initiatives, we need something more fundamental,'' he warned. One of the negative factors in each case is the uncompetitive average salary. In nearby Austria, for example, in the hotel sector, wages are about 122 percent higher. Still, the hotel industry here in Croatia has experienced a great discrepancy in numbers, and they have therefore begun to increase employee salaries for the last two summer seasons, which has been a fruitful decision. With the rise in salaries and expenses, revenue also grew.

In addition to the inadequate management of human resources, huge problems are also created by the Croatian tax policy. Property tax, Tutek said, practically doesn't exist in Croatia. ''We're the champions of how good private landlords have it. Croatia is a tax oasis,'' he claims.

''We want to be competitive, but there are a number of things that we're not even close to, not even in the wider environment. VAT reduction is certainly important, and there is also the question of consistent policies. It is important for us to have a perception of what will happen in the future at some point, but if the policies constantly change then we can't have a stable business,'' said Sanjin Šolić of the Lošinj hotel group Jadranka.

Davor Lukšić, President of the Lukšić Croatia Group, agreed with him, pointing out that Croatia's 25 percent VAT rate is very high, and even with a rate of 13 percent there would still be room for progress. "We have to remain competitive, especially now when other destinations in the Mediterranean are making a come back," Lukšić added.

But if one was to as Croatian Tourism Minister Gari Cappelli, the problem of the high VAT rate is one of the easiest problems to solve in the Croatian tourism industry. The minister claims that the Croatian Government could lower the VAT rate with one decree, bringing it down to 10 or 13 percent, and such a decision is in the government's plans for the beginning of next year.

''We have a problem with having five-star hotels in two star destinations. First of all, we have to start improving the quality of the destination and spend the whole year measuring what's happening and only after a few years will we see whether both residents and tourists are happy, as well as service providers and the environment. If everyone is more or less happy, then it makes sense to invest in a four or five-star hotel,'' stated Minister Cappelli, adding that in Croatia, it often happens that investments are made in luxurious hotels first, but not in the development of the destination in which it is located.

"Well, we have cases where five-star hotels don't have sewage systems but septic tanks," he said. The minister also referred to the initial lecture by Emanuel Tutek about the key challenges facing Croatian tourism. He agreed that there was always room for progress, but he also pointed out that he was tracking the figures daily and that he couldn't bring himself to agree with all the alarming warnings about the unsustainability of Croatian tourism.

''We're a strange people, two years ago there were no tourists and they wanted to get rid of me, now there are a lot of tourists, and they want to get rid of me again, the projections of what's to come in two years keep coming in, and they're already that I'm shaking in my chair,'' said Cappelli, adding that Croatia is spending what it earns and has therefore finally got an investment rating.

''Now the pressure on public finances is being relieved and the taxes on the economy can be reduced slowly,'' he said.

If the Croatian tourism association is asked for their opinion on the matter, this is last chance saloon for this tax relief to actually become a reality. Namely, it is anticipated that hotels could reduce the volume of their investments by as much as thirty percent over the next three to four years. ''We want to warn the government that it must not let that happen. We have to invest, but we expect that the government to create measures to encourage that and not just put us off,'' said Jadranka's Sanjin Šolić.

Dubrovnik has experienced not only growth in terms of tourism but also the improvement of infrastructure in recent years, Lukšić believes. However, despite the wild popularity of this particular southern Croatian city, it has multiple problems during the winter season.

''In the last two years, we have extended the [tourist] season and the so called ''congress season'' has helped a lot. But we all have to sit around the table and design a strategy for the winter season, which is actually the only problem,'' Lukšić said, arousing a grin from Šolić, who, having being on an island, has much bigger problems.

''It's easy for Dubrovnik. Imagine how it is for us to extend the season! You need to get to the island, the bridge is a problem, the bura is a problem, everything is a problem. We're less competitive than our colleagues on the mainland whichever way you turn. The Chinese, the Koreans, whoever comes to Croatia, lands in Zagreb, goes to Plitvice, Split and Dubrovnik, nobody comes to us,'' complained Sanjin Šolić.

That is why his team sat down together at the table and decided to turn to health tourism for which Lošinj has natural resources, a strategy and a future, said Šolić. Another solution for the development of island tourism is golf. Therefore, a location permit is currently being sought for the construction of a golf course with eighteen holes, with which will be a hotel and villa that will have a total of 800 beds.

''These are the two routes we have on Lošinj. People don't play golf in July and August because its too hot. During November, December, January, February and March, the weather is wonderful and we'll fill our capacities that way,'' he noted.

Emanuel Tutek welcomed this discrepancy in Croatia's tourism development strategies at various locations.

''Not all destinations are suffering the same issues. In Dubrovnik, there is a problem with excessive demand, and the quality of the offer needs to be worked on to reduce the number of tourists. In Istria, the offer should be increased. This has, for example, been done in Maistra. Nobody thought it would pay off to build a five-star hotel in Rovinj, but after the construction of the hotel, the rest of the sector was accompanied by the arrival of tourists and the development of the destination.

However, in addition to the respective issues destinations face in Croatia, the eternal problem facing the entire Croatian tourism sector is labour and wages.

''Salaries are a problem, they're still a base for attracting workers,'' said Tutek, agreeing with the CEO of Jadranka, but as he said, it's difficult to increase salaries because there isn't enough revenue.

"When the minister sorts us out with less taxes, I'll give the rest of it in salaries," he stated.

Make sure to follow our dedicated lifestyle and business pages for much more.


Click here for the original article by Lea Balenovic and Iva Grubisa for Novac/Jutarnji

Tuesday, 19 March 2019

1.5 Million Kuna Earmarked for Medical Teams on Adriatic Coast

ZAGREB, March 19, 2019 - The Ministry of Tourism will once again co-finance additional medical teams in tourist destinations in the peak season and has earmarked 1.5 million kuna for that purpose, it was said on Tuesday at a ceremony when agreements on co-financing were signed with county representatives of the most prominent tourism destinations.

Of the total of 1.5 million kuna, nearly 456,000 kuna will go to Istria County and 316,000 kuna will help finance additional medical teams in Split-Dalmatia County. Primorje-Gorski Kotar County will receive 270,000 kuna, followed by Zadar County (180,000 kuna), Dubrovnik-Neretva County (125,500 kuna), Šibenik-Knin County (103,000 kuna) and Lika-Senj county (50,300).

"The security aspect is a very important part of tourism as are medical teams...all this is to help make Croatia a safe destination," Tourism Minister Gari Cappelli said, adding that he has insisted for some time now for a solution for a helicopter medical service, particularly for the islands and hopes that a solution will be found by the summer.

He explained that since 2008 to date the ministry had set aside almost 19 million kuna to co-finance medical teams.

"This year we will have 20 teams on the road that will be dispatched at more than 20 locations in the seven counties," the director of Croatia's Institute for Emergency Medicine, Maja Grba-Bujević said.

She said that last year between 1 June and 30 September, medical teams in these counties attended to 168,000 cases which was 58% more than in the first four months of that year.

The most frequent interventions during the summer are related to heart attacks, migraines and dizziness. She added that 564 people were attended to by medical air assistance during the tourism season, 70% of those patients suffered heart attacks.

More news about tourism in Croatia can be found in the Politics section.

Monday, 11 March 2019

Substantial Decrease in Bookings by German Tourists for 2019

Last week’s ITB Berlin tourism fair did not give the Croatian tourist industry what it wanted after a months-long pause in sales to the German tourists. Instead, in the first week of March, they received a worrying number: in four months, from early November 2018 to late February, nine per cent fewer travel packages were sold in Germany for all destinations than in the same period a year ago, reports Večernji List on March 11, 2019.

We can only try to guess what is happening with the significant travelling nation, which each year registers some fifty million travels. Turkey is popular this year, but surely not everyone is going there. Did the slowdown of the German economy make them think twice? Are they planning to stay in Germany, after the perfect summer weather last year?

There are many questions, and there was no optimism after the results of the annual major study Reiseanalyse were published. Researchers have corrected their earlier, more optimistic forecasts about 55 million travels by German citizens in 2019. They have concluded that the number of German tourists this year will be similar to last year's 54.1 million.

They will also spend less on travel than in 2018 when the amount reached 72.7 billion euro. This year, they forecast 71.2 billion euro in tourist spending. On average, Germans will spend 1,017 euro on travels longer than five days, as opposed to last year's 1,045 euro. All this is equally relevant to Mediterranean countries, which are all facing drops, with the exception to Turkey. The state currently has 25 to 30 per cent more bookings than last year.

“Yes, the slowdown in bookings is not just our problem. It is unusual that at this time so many German citizens, who are usually among the first to decide on their holidays, have not yet made that decision. The tension is growing. Spain has already reacted by lowering prices, and I would say that a price war could be expected in the Mediterranean this season. It is a battle which we cannot win, and for us, the key is the ratio between quality and price. Those who have not offered the right value for money will have to consider making price corrections. Although it should not be done overnight, we have another month to see how the situation will develop,” said Boris Žgomba, president of the Association of Travel Agencies at the Croatian Chamber of Commerce, saying that the booking for Croatia is currently weaker by three to ten per cent.

Most Mediterranean tourist countries have also increased their promotion budgets. This was recently done by Croatia as well, which allocated an additional 2.5 million kuna for the German market. Is it enough or should the amount be increased will be monitored during the next ten days.

Tourism Minister Gari Cappelli is convinced that Croatian tourism will welcome 2.9 million guests from Germany in 2019, the same number as last year. He also advised the tourist industry not to lower the prices.

“Croatia has become a competitive destination in the world's tourist market primarily because of the quality it offers to its visitors. This is supported by the fact that so far this year there are 14 per cent more tourist overnights from Germany. That is why we need to work on improving the quality of the tourist offer, whose value will surely be recognised by our guests. Based on the news coming from the largest tourist fairs, I believe that in the current year we will continue to achieve positive results while retaining the image of a quality tourist destination” said Cappelli.

More news about Croatian tourism can be found in the Travel section.

Translated from Večernji List (reported by Radmila Kovačević).

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