Hoteliers are satisfied with how the season has gone. The complexity of the sector requires daily management of business processes, said the director of the Croatian Tourism Association (HUT) Veljko Ostojic in an interview with the Croatian news agency Hina.

The course of the season so far can be described as very good, considering the two previous big seasons in which the closer destinations were in high demand after the Covid crisis, explains Ostojic.

This year is a reality for our tourism industry, to which the saying “as you sow, so shall you reap” can be applied, said Ostojic, commenting on the fact that hotels and campsites of higher categories also have a higher occupancy rate.

Hotels in the lower categories face greater challenges

For example, five-star hotels are currently at 96% occupancy, some of the five-star campsites at 100% and four-star hotels at 93%, he added.

On the other hand, the lower category hotels, especially the two-star hotels, are facing greater challenges as they are forced to increase prices due to inflationary pressures, while the market is not accepting these price increases, he added.

Ostojic reminds that two thirds of Croatian accommodation capacity in the tourism sector are short-term rentals, both in commercial and non-commercial properties such as holiday homes. Currently, the occupancy rate of these holiday homes is only 22%, while commercial properties for short-term rentals are 55% occupied.

Ostojic distinguishes between family-run properties for tourists, where the owners who run the business live in the property, and the proliferation of tourist flats for short-term rentals, which are occupied for 40 or 50 days in high season and put a strain on the destination’s infrastructure, ultimately making it less attractive.

Dangers of overtourism in places with many short-term rentals

He is therefore calling for a ban on the construction of new holiday flats for short-term rentals.

In this context, Ostojic, a former tourism minister, said that overtourism caused by short-term rentals is paving the way for “suicide in the tourism market”.

Ostojic pointed out that while Croatia has passed the Tourism Act, it must now adopt accompanying regulations and ordinances that allow local authorities to stop or restrict the construction boom if necessary to prevent an excessive rush of visitors to a particular destination during a short period in the season.

He calls for a policy at national level to speed up this process, considering that 110,000 additional beds in short-term rentals have come onto the market in the last two years.

On the subject of pricing in hospitality and tourism, the HUT director recognises that in a market economy, entrepreneurs are free to set their prices, but in tourism, the consequences of wrong pricing decisions by a single company can affect the image of the entire destination.

Ostojic therefore argues in favour of a prudent and well-thought-out approach to this issue.