Over the next five years, some €1.2 billion euros will be invested in Croatia's hotel industry, 90 percent of which will go to upscale projects along the Adriatic coast, a report released by the Ernst & Young (EY) consultancy firm said.

A report compiled by EY’s Croatian branch, which researched hotel industry investments for the 2018-22 period identified 83 hotel developments which are now in various stages of planning or construction and which will be put on the market in the 2018-22 time-frame.

Some 90 percent of all projects that are currently under way is in or near the country’s coastal area, and in terms of the value and number of projects the two leading counties are the Split-Dalmatia county which includes Croatia’s second city of Split, and the Istria peninsula in the north-west.

The report indicated a major shift in the origin of investors building hotels in Croatia. While European investors once dominated the sector, some 42 percent of investments until 2022 will come from Asia-based hotel chains and investors. This means that their share will be on par with domestic investors, with European companies’ share dropping to 13 percent.

The investors polled by EY said they expected their projects to break even in about ten years on average.

Marija Norsic of EY’s department for consulting in the tourist and hotel industries said that 60 percent of all investments refer to completely new projects ans hotels, with the remaining 40 percent going to renovations of existing hotels.

“In the period 2018-22, investments will be spent to on a total of 9,700 hotel rooms, including some 6,000 which will be newly built at high-end four-star or five-star hotels,” Norsic said.

She added that the biggest global hotel chains will enter the Croatian market, and that hotels with up to 200 rooms will account for half of all investments, with the average investment value per room €140,000 in four-star hotels, and €370,000 for five-star establishments.

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