Is it possible to increase salaries in tourism by 30%?

Source: HRT Topic of the day

Croatian tourism will lack about 15.000 workers next year, and the only solution to the whole story is to solve the cause of it - and that is to improve working conditions and increase wages. Nothing new or revolutionary, but the main problem has been pushed on the carpet for years, and now that the whole situation has escalated, when there is a chronic shortage of labor in tourism, we have all sorts of extremes and anomalies.

And the situation has escalated so much that even the Minister of Tourism a few days ago publicly called out hoteliers that they have to raise salaries by 30 percent.

Should the state reduce the tax rate in tourism and is it possible to increase 30 percent higher salaries for workers in the tourism industry, which raised employers to their feet, the director of the Tourism Department at the Croatian Chamber of Commerce spoke on HRT in Tema dana Želimir Kramarić and long-time president of the Union of Hoteliers and Caterers of Istria, Kvarner and Dalmatia Bruno Bulić.

Compared to tourism competition, Croatia has one of the highest VAT rates in the EU. That is a fact and no one can dispute it. Spain and France have a rate of 10 percent for hotel accommodation and catering, Portugal an incredible 6 percent, Slovenia 9 and a half percent. Croatia holds high with a 25 percent VAT.

With such benefits, large tourist companies in Croatia make higher profits than the same companies in Spain, Italy, etc. It is not true what employers claim, the data should be analyzed, said Bruno Bulić. He stated that some companies have a net profit of around 30 million to 700 million kuna. “I think they learned a lot of money and big profits and acquisitions. The state as a stabilizer between the insatiability of capital and the position of workers in this activity has not played its role", Said Busic and added that he believes that dangerous concreting and apartmentization are happening because of a lot of money - and incompetent local governments have a big role in that, he believes.

"For many years in tourism and in the overall economy we have had a key competitiveness problem due to labor issues. The fact is that employers are raising wages and will continue to do so. But in order to go further - there must be relief: labor costs through lower benefits, equalization of conditions with competing countries and investment in people., said Želimir Kramarić

Commenting on the fact that some hotels have been raising the salaries of waiters (HRK 7.000), maids and cleaners (HRK 5800 to 6200) for years and providing accommodation and two meals with the salary, Bulić said that this was the result of the functioning of the labor market in tourism. “The share of labor in total income in tourism ranges from 23 to 28 percent. Competing countries have that much larger share. We can’t just talk about taxes. Workers in tourism would not leave if they did not have a higher salary there. They must be higher and workers need to be employed indefinitely", Concluded Busic.

The show pointed out that Slovenians raised the average salary in tourism to 1.000 euros, and 'introduced' workers from Croatia, and K ramarić also mentioned the education of staff in tourism as key, and that we cannot live only from the sun and the sea, but we should develop other content as well.

Throughout the story, it is quite clear how to raise wages and working conditions, as well as that the State must reduce VAT in tourism as well as other levies that burden entrepreneurship. Shooting through the media really doesn’t make sense, you need to sit down at a table and find the best solution. It is a well-known fact that the lower the taxes and levies, the more entrepreneurship flourishes. Win-Win.

Source: HRT

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