The worth competitiveness of Croatian tourism is at the moment underneath menace. Rising costs can’t be justified by vitality prices, among the many lowest within the eurozone, or VAT charges. Authorities representatives have warned that this example will not be sustainable in the long run and will negatively influence financial development.
Regardless of the previous vacationer season-breaking data, analyses point out that Croatia is falling behind its Mediterranean rivals. Specialists observe that, as of 2024, Croatia is 10 p.c dearer than each Spain and Greece. Simply two years in the past, Croatia was 10 p.c cheaper than these nations. For the reason that pandemic, costs in Croatia have elevated by 50 p.c in comparison with different Mediterranean locations. This rise has affected the spending conduct of overseas vacationers; in the course of the excessive season, per capita spending declined by 0.7 p.c in comparison with 2023.
Moreover, Croatia’s tourism sector has a VAT of 13 p.c. Growing service costs additionally contribute to general inflation, which is at the moment greater in Croatia than the common for the eurozone.
A number of ministers, representatives from tourism associations and firms, and the Governor of the HNB (Croatian Nationwide Financial institution) have mentioned the problem of rising service costs in Croatia. The HNB highlighted that these rising costs have been the first driver of inflation over the previous three years, significantly within the catering and resort industries.
Jelena Tabak, President of the Croatian Chamber of Financial system (HGK) Affiliation of Lodge and Restaurant Operators, expressed hope that there might be extra cautious pricing methods within the upcoming season. Dalibor Kratohvil, President of the Croatian Chamber of Crafts (HOK), famous that restaurateurs face rising stress attributable to inflation. He referred to as for measures to chop prices and administrative aid, together with decreasing the VAT on drinks to 13 p.c. Though this discount wouldn’t lead to decrease costs, it may assist forestall additional will increase.
