Tourists "abandon" Croatia - High prices drive them away to cheaper destinations
The number of tourists visiting Croatia has fallen sharply, dealing a major blow to the industry. The Balkan country has been a haven for visitors from Germany, Austria, the Czech Republic and Italy, many of them attracted by cheaper prices compared to other countries.
However, in the last three years, tourism prices in Croatia have increased by a staggering 50%. This increase is making Croatia more expensive than two of its biggest rivals, Spain and Greece. Costs in the two Mediterranean countries have only increased by 15-20% over the same period.
It is worth noting that this sudden change in Croatia is not related to external factors such as energy costs or value added tax (VAT) rates.
The country benefits from some of the lowest energy prices in the Eurozone and a reduced VAT rate for tourism of 13%. However, the root cause lies in rising operating costs within the hospitality industry.
These rising costs have caused a domino effect, leading to stagnant overnight stays and a decline in tourist spending. The tourism sector, once a key pillar of Croatia's economy, is now facing challenges in sustaining its growth.
The impact of higher prices is already visible. Tourist visits from core markets such as Germany, Austria, the Czech Republic and Italy have fallen sharply. During the peak season last year, foreign tourism revenues in Croatia fell by 0.7% compared to the previous year.
Another challenge facing the sector is the heavy reliance on global booking platforms. The high commissions of these platforms are eroding the revenues of local accommodation providers.
The Croatian Association of Family Accommodation has proposed the development of a national reservation system to reduce dependence on international platforms. Such a system could help small businesses retain more revenue by offering tourists competitive prices.
For visitors looking for affordable options within Europe, Croatia's reputation as a cheap destination is fading. Wealthier travelers may continue to visit the country, but middle-income citizens will likely favor more affordable destinations like Greece or Turkey.
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