Josip Mikulić: Croatia - a country for short-term rent

Loud thinking - Prof. dr. sc. Josip Mikulić


Author  Josip Mikulić

20. April 2022.
If you can't afford to live in your own country then move away.
While capacity in private accommodation has doubled, the population has shrunk by almost 10%. Croatia of two speeds, or Croatia — a country for short-term rent.
The basic meaning of tourism is yes contribute to the well-being of the local community since tourism takes place in her living space. There are few of us, Croatia is essentially one local community, and tourism definitely contributes significantly to the well-being of part of the local community.
However, not all members of the community.
Significant problems arise primarily from uncontrolled rentier monsters which apartmentizes an increasing part of the coast. The benefits are clear — anyone involved in renting and building can capitalize on God-given natural beauty and an ideal geo-traffic position in relation to important emitting markets. And in principle there is nothing wrong with that as long as everything is in moderation and in accordance with the plan.
But that is not the case with us.
According to the Strategy, it should not have happened capacity increase in private accommodation from 2012 to 2020, already needed to invest in raising quality existing accommodation. But capacity has more than doubled, from 401.000 beds in 2012 to 834.000 beds in 2019 (from a high of 45% to 63%).
And why is this a problem at all, isn’t it good for people to benefit when we have the conditions to do so?
It is good, in principle, but the problem is that this model of tourism brings significant damage to the local community less talked about:
- Due to apartmentization, real estate prices are skyrocketing. There is a paradoxical situation that those who do not own real estate or have resolved their housing issue cannot afford to live in their own place. If they are forced to move because of that, and they are often young, it would be better for them not to have tourism.
- By evicting part of the local population, part of the potential labor force is also evicting in hotel companies, which are often the bearers of destination development, which causes direct damage to tourism, but also to the rest of the economy. At the same time, the attractive space is "colonized" by those who can afford it.
- Capacity utilization of private accommodation, in essence, apartments for short-term rent, is a miserable 14%, while for hotel accommodation 43%, and camps as much as 56%. But as long as private accommodation owners still find it worthwhile to rent for an average of 50 days a year, they will continue to do so and capacity will grow. And they do it primarily because of unfair tax treatment in relation to hoteliers.
- Except housing is becoming more expensive, because the rest of the economy is not following the expansion of tourism, a local man who does not have an apartment, is becoming more inaccessible and vacation in their own country.
Then why?
Author: Prof. dr. sc. Josip Mikulić
Photo: Vitalii Dobrianskyi, / Illustration:

Author  Josip Mikulić

20. April 2022.