Croatia can count on Government policies to increase its tourism competitiveness

The tourism sector in Croatia during the last years has registered notable growth margins. Its interesting price competitiveness and its “Sea & Sun” oriented offer managed to attract international tourism flows, in particular during the summer season.

The World Economic Forum, in its “Travel & Tourism Competitiveness Report 2017”, ranks Croatia 32nd out of 136 analysed Countries for tourism competitiveness. The strong points of the destination are the tourism infrastructure (5th), natural resources (20th), environmental sustainability (21st) and the international openness (26th). On the other hand, weaker points are the quality of air transport infrastructure (78th), the present destination branding strategies (105th) and the budget that the Government dedicates to the Travel & Tourism policies (116th).

As reported to Twissen by the Croatian National Tourist Board, the tourism sector in Croatia in 2016 registered a total of 15.596.967 arrivals (13.809.250 international arrivals) which represents a growth of 8,7% and total of 78.061.087 overnight stays (72.196.821 international overnight stays) representing a growth of 9% compared to the year 2015. The main origin market is Europe, followed by the United States, China, Japan, South Korea, Canada and Australia. 

The World Travel & Tourism Council in the “Travel & Tourism Economic Impact 2017” reports that, in 2016, the direct contribution of tourism o the Country’s GDP was about 5,002mn euros (HRK 37,017.7), namely 10,7% of total GDP. The WTTC expects this to grow up to represent its 14% by 2027. The total contribution, which includes the indirect and induced ones, was about 11,500mn euros (HRK 85,173.4mn), namely 24,7% of GDP. The same reports highlights the important impact that the leisure segment and international arrivals have on the Country’s tourism sector. Last year the tourism expense in the leisure segment represented 92,1% of direct Travel & Tourism contribution, while the international tourists’ expense represented its 83,7%.

Tourism development in Croatia is regulated under the Croatian Tourism Development Strategy till 2020, released by the Ministry of Tourism in 2013. This Plan, beyond the development of the sector, aims to delegate some responsibilities to local bodies, to encourage investors and build a basis to access European funds. The same Plan underlines the necessity of differentiating the tourism offer through the creation of innovative tourism products, addressing to the strong seasonality of the tourism sector. Even if there is a will of strengthen every level of the tourism value chain and to extend the summer season, among the new strategic products there is the development of nautical tourism through the building of 15,000 new berths, the promotion of the Country as medical tourism destination and the organisation of events in the MICE segment. Finally, the Plan shows the Government intent to position Croatia, by 2020, among the 20 most performing Countries for tourism competitiveness. In figures, the Government projected investments worth 7bn euros to allocate in the sector, the enhancement of hotel share from 13% to 18%, the creation of 30,000 new job positions and the increase of domestic and international tourism expense up to 14bn euros. The Croatian National Tourist Board expects a total of 800 million euros investments in the tourism sector this year, 300 million euros is expected as investments in the public sector and 500 million euros in the private sector, and Croatian institutions are working hard on lowering barriers presented to investors as well as increased activation of state owned land.

International cooperation is also one of the key factors to the tourism development of the Country. “The Croatian National Tourist Board has cooperated with the Slovenian Tourist Board since 2010. This cooperation includes joint presentations on distant markets such as China, Japan, South Korea, Brasil, etc. Croatia and Slovenia work together on fairs and workshops, which is one of the main promotional tools for long distance markets of these two countries”.

Source: Ministry of Tourism of Croatia, Croatian Tourism Development Strategy till 2020

Among the most interesting private investments, Valamar Riviera, Croatian Hotel & Resort Management company, planned a 300mn euros investment by 2020 to build resorts along the coast. By 2019, an hotel branded Four Season Hotels and Resorts will open, and the project is worth about 135mn euros.

As reported to Twissen, Croatia is hosting many festivals this year: the Ultra Europe Music Festival, Fresh Island Festival and Seasplash Festival in June, MTV Summerblast and Membrain Festival in August, Dimensions and Outlook festivals in September. Croatia is also home of many other worldwide recognised events such as Red Bull Air Race, Tour of Croatia and Swatch Beach Volleyball Major Series.

Croatia is considered to be  safe destination. As reported by the UK Foreign Travel Advice, Croatia as the rest of the European continent is not totally safe from the international terrorism threat. In particular, it recommends to pay attention to the local petty crimes.

At Twissen we observed that Croatia is a tourist destination where industry’s players can invest on developing new products in different segments beyond the Sea & Sun. This can happen thanks to the favourable Government policies and to the strong attractions that Croatia has as a tourism destination.