Tourism Development Management Council: Price competitiveness is becoming a crucial factor

On the occasion of preparations for the new tourist season, Prime Minister Andrej Plenković and members of the Government participated yesterday in a session of the Tourism Development Management Council, which brought together representatives of the tourism sector, the President of the Croatian Tourist Board, the Governor of the Croatian National Bank, the Chief State Inspector, representatives of the Croatian Chamber of Economy, the Croatian Chamber of Crafts, the Croatian Association of Counties, the Association of Cities and the Association of Municipalities.

Introducing the session, Prime Minister Plenković first referred to the last tourist season, saying that record tourism results were achieved last year. But he also warned against three elements which are important to take into account in order to continue this positive trend. The first element is lower tourist traffic from key emission markets, the second is accelerated price growth, and the third is a decrease in real spending by guests.

""Price competitiveness is becoming a crucial factor for maintaining the positive trend of Croatian tourism.", he emphasized. Although Croatia is a tourist country attractive to foreign guests, it is very important to the Government that tourism remains accessible to Croatian citizens, the Prime Minister emphasized the most important message of today's session of the Tourism Development Management Council. 

Tourism services must remain accessible to domestic guests
 
He added that data shows that the prices of tourist services in Croatia have grown faster than in competing Mediterranean countries. This means that the characteristic of accessibility, which has long been an advantage for Croatia, is slowly disappearing.
 
He stressed that it is very important for the Croatian government that tourism remains accessible to Croatian citizens. "That is one of the most important messages from today's meeting that we must take into account - that is, domestic guests," he added, emphasizing that Croatia's tourism offer must not become a luxury only for foreign guests.

The increase in prices in tourism also affects the inflation rate in Croatia, which is evident from data from the Central Bureau of Statistics for January.

Such trends have negative consequences for both the economy and the standard of living of citizens, which is why the task of this Council is to define strategic guidelines for the development of Croatian tourism, said the Prime Minister. This means, he added, monitoring the effects of policies on tourism, coordinating measures and cooperation between different stakeholders, and making decisions that will ensure both the competitiveness and sustainability and accessibility of the tourist offer.

Speaking about the tourism results last year, he stated that 21,4 million arrivals and 108,7 million arrivals were achieved. This means that the growth limits of Croatian tourism have been reached. At the same time, the supply, especially in private accommodation, has been growing, and if the supply is increasing, and the number of arrivals and overnight stays is more or less the same, then those that had more tourists in the past will have fewer in the future.

During peak season, he added, about a million beds are empty.

In Croatia, there are 5,5 tourists per capita, and there is no other Mediterranean country that has such a ratio of tourists to residents. Although these figures are impressive, he stressed, it should be openly stated that we are recording lower numbers than in Germany, the Czech Republic and Italy, for two reasons. One is the consequence of the slowdown in the economies of these countries, and the other is higher prices in our country."That is why it is very important that we pursue a wise policy of maintaining price balance.", the Prime Minister emphasized.

Speaking about the prices of tourist services, the Prime Minister stated that, according to the data of the State Bureau of Statistics and the analysis of the Croatian Tourist Board, they grew twice as fast as in most other Mediterranean countries. Warning that this is not the most positive signal, he added that these prices are currently higher than in Spain and Greece, which are also attractive Mediterranean destinations. Such a price policy in the time of technological development is well seen and monitored, and it is very important to be wise in the policy of formulating prices, he emphasized.

When it comes to spending by foreign guests, there is a decline. It has decreased by 10 percent, and the reason is that it is getting more expensive. Apart from Croatia, he added, a decline in spending has only been recorded in Italy. These are all statistically verified signals that are important to everyone who makes decisions in the tourism sector for setting prices in the season ahead. In addition to all of the above, he added, tourism is also affected by the context of climate change, from major droughts, heat waves, fires and so on.

"I opened this meeting in such a way as to signal the urgency of smart action this year so that tourism remains one of the best branches of our economy.", he said and called on everyone to take a reasonable approach that will result in good indicators for all tourism activities and the Croatian economy as a whole.

"We don't necessarily have to talk about lowering prices, but we must also talk about, among other things, that if we have to raise prices, that this price increase should be adequately accompanied by investment, that is, raising services and quality. As for the government's sectoral measures, we have done everything to raise the quality, investment, and competitiveness of Croatian tourism.", he pointed out Tonči Glavina, Minister of Tourism and Sports.

On the price competitiveness of Croatian tourism in the Mediterranean and beyond, in the central HTV News-and the director of the Croatian Tourist Board spoke Kristjan Staničić."Croatia is still recognized as one of the most desirable tourist destinations on the foreign market, but it is also a fact that there are more and more complaints about the price level of our services and that in this sense we need to do everything we can to remain a price-competitive destination for both domestic and foreign guests.", said Stanicic.

He emphasizes that there are challenges in the hospitality services segment and in terms of accommodation capacities, which differ in certain parts of the year from the price levels offered by Mediterranean countries in our region.

Staničić said that prices for this season have increased by approximately 10-15 percent.It is difficult to unify given the diverse tourist offer of both accommodation capacities and catering, but somewhere between 10-15% according to our analyses that we have done. It is clear that Croatia is still a competitive tourist country, however, in certain parts of the year and in certain segments of accommodation and catering services we stand out from the competition and that is the key message today that we must do everything to remain price competitive in the tourist market.", Staničić repeated and noted that they come from certain markets that we are outperforming certain competitors in terms of prices, for example, Greece, Spain, Italy, France. In this sense "We need to be wise and smart when setting prices."", he added.

The director of the Croatian Tourist Board reflected on today's Croatian tourism gathering and stated how to maintain competitiveness in the market.We need to think in terms of quality, to provide value for money for a certain price level that has been set, or to provide a certain higher level of service in terms of quality, diversity of the entire package of tourist offers and what we can offer our guests who come to Croatia, so that we can continue to be hospitable."

Photo: hrturism

Source: Government of the Republic of Croatia, HRT