Nedo Pinezić: Family accommodation - a strong asset of Croatian tourism

Sustainable tourism needs cooperation, coexistence of the local community, small and large entrepreneurs in tourism, government and academia on an equal basis

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Author  Nedo Pinezić

6. April 2022.

What is family accommodation?

According to the Law on Catering Activity, it is a catering service in the household and on the family farm. According to the tax law, it is about renting and organizing accommodation for tourists.

In nature, these are catering services organized and run by the family. This service starts with one room and ends with a small family hotel. It is a craft, personalized approach to service (craft, artigianale,), highly valued in developed countries. Many tourism giants began their historical development just as family accommodation. Among them, perhaps the most famous are Hilton and Mariott.

Croatian family accommodation has a really long tradition. For example, in the 1937 newspaper "Jadranska straža" he writes about "seasonal renting of rooms and giving food in tourist places".

The "Law on Shops" from that time states: about actions ".
The same Act also states: "When an apartment is rented out or food is provided within the scope of domestic work mentioned in Article 1, paragraph 2, item 17, such work shall not be considered a catering activity." This legislation confirms the continuity of the provision of catering services in the household from an earlier period, from the time of Austro - Hungary.

The importance of family accommodation is most clearly recognized in times of crisis. In 2021, the pandemic year, there were 13,8 million arrivals and 84,1 million overnight stays in Croatia. Compared to the results of the record, pre-pandemic, 2019, in 2021, 67 percent of arrivals and 77 percent of overnight stays in 2019 were achieved.

According to the type of accommodation, most overnight stays were realized in households (32,1 million). Almost half less (17,4 million) and (15,7 million) turnover was generated in campsites and hotels, respectively, than in households.

The war in Ukraine and the solidarity of family accommodation

80% of all persons emigrated from Ukraine to Croatia are accommodated in private accommodation. Airbnb and Airbnb.org have announced that they will Airbnb.org offer for free, short-term housing for up to 100.000 refugees fleeing Ukraine. These stays will be funded by Airbnb, Inc., donors to the Airbnb.org Refugee Fund and the generosity of the hosts through Airbnb.org.

This emotional connection between guests and hosts has occurred before in major crises. The emotional connection between the host and the guest was also expressed in earlier times of crisis. During the Homeland War, the hosts were assisted by guests, sent humanitarian aid, received the hosts, lobbied for international recognition of Croatia and stopping the war. City of Zagreb.

Loyal guests are especially attached to their hosts, to the place of rest as a "second home". They are, in addition to the owners of "cottages", the backbone of tourist traffic in Croatia. Thanks to this category of tourists, traffic is maintained in catering facilities and shops in the tourist area even in the most difficult times.

What is the economic impact of family accommodation?

We know that expenditures for overnight stays amount to 25 to 30% of the total spending on a tourist trip. This means that 70 to 75% of consumption is accounted for by all other services: Transport, trade, food, entertainment and recreational facilities, etc. If the average is 100, 30 remains with the host and 70 is allocated to all other providers of goods and services.

The last known data from 2018 were published in 2019. According to them, the average household had 6 beds. One household generated an average of HRK 45.000,00 in income. 100.000 households were registered, which generated 4,5 billion kuna in income. That’s only 30% of total travel spending. Total consumption reached almost 16 billion kuna. Thanks to family accommodation, everyone else earned 11,5 billion kuna.

Every household contributes to the creation of jobs

In one household, one double room with breakfast employs half of the working time of one person ("half of the workplace" is created).
• For every 5 rooms, one job of cleaning, cleaning, washing, ironing,
• For every 20 rooms, the employment of one handyman, one internet administrator is created,
• For every 40 rooms, jobs are created for one driver - escort, dealer - salesman, guide, chef, waiter…
• For every 40 rooms, tourism creates 16 jobs,
• 2.000 rooms create 800 jobs
• If there were no accommodation in the household and realized overnight stays, there would be no created jobs.

The power of micro entrepreneurship

In 2005, the European Commission published a definition of micro, small and medium-sized enterprises in its recommendation, and in 2016 it emphasized the importance of micro, small and medium-sized enterprises:

• "MSPThese represent 99% of their business in the EU.
• They are a pillar of his economy. They create two out of every three jobs.
• In 2013, more than 21 million MSPhas provided almost 90 million jobs in the EU.
• They stimulate a sense of entrepreneurship and innovation, helping to boost European competitiveness, economic growth and employment. "

Definition of micro entrepreneurship

- It has from 0 to 10 employees
- Has assets and / or financial turnover of up to 2 million euros per year
- It operates according to the applicable law
- He pays taxes

Family accommodation in all categories belongs to micro entrepreneurship. Micro-entrepreneurship through the provision of catering services in the household and on the family farm should be appreciated and encouraged because the business with private real estate can take place in a different way, less favorable system of tourist boards.

The owner of the apartment or house can rent them with a simple apartment rental agreement:
• The apartment can be rented to a foreigner
• Foreigner from EU and countries EEP, as well as a Croatian citizen can stay outside the place of residence without the obligation to register residence for 90 days in 180 days
• This is the principle by which renting apartments to tourists in large cities in Spain, France, Germany and other EU countries works…

When renting an apartment, there is no categorization of the facility for providing catering services, so there is no flat tourist tax or membership fee. That is why in many large European cities there are disputes demanding the regulation of tourist traffic in real estate owned by private, natural persons.

• The advantages of such "non-entrepreneurial" real estate rental are not negligible.
• Tax is paid at the rate of 10 percent on a base reduced by 30%,
• The landlord does not pay the tourist tax, membership fee
• The landlord does not pay the brokerage commission
• The landlord does not pay utilities, cleaning
• The landlord does not pay RTV fee
• The landlord is not inspected

Autogosts are saving the tourist season

The world is changing, it is divided into east and west, Croatian tourism is returning to traditional markets. In the pandemic years and in this 2022, "drive in" destinations have priority, and those that are as close as possible to the starting point. The car is also a means of consumption in Croatia (tolls, fuel, ferries, parking, car washes, filling stations…) The car exports significant quantities of domestic products such as olive oil, wine, cheese, prosciutto (.

Imagine putting 2 bottles of wine and olive oil for "self-export" in every trunk of 6 million vehicles. The car is a "container" that comes for the goods, loads it and drives it to the final destination, pays for the goods immediately upon collection, at the retail price in cash… It is the dream of every good seller.

Family accommodation and demographics

Family accommodation contributes to household income when other, basic incomes such as salaries and pensions are insufficient. If we can ensure a good standard of living and an income with which we can pay all our obligations and still travel the world as free people and not hired workers, why not opt ​​for such an approach? The Croatian coast and islands would have been without population a long time ago if there was no tourism, especially family tourism.

The survival of rural communities is threatened throughout Europe. Family tourism is recognized as an effective “tool” to improve life in rural areas. Thanks to a combination of primary economic activities and tourism, it is also possible to achieve a standard of living in rural areas that was once only possible in cities. Through tourist traffic, the municipality also participates in significantly higher revenues, so investments in a higher communal standard become possible. Tourism needs good final products such as processed milk, meat and cured meat products, wool clothing, wooden furniture but digital devices and programs and the like. Due to the demand created by tourism, primary economic activities are also improving. Final products of good quality and design achieve a good price and become sought after outside the tourist place. Tourism is in a way a "sponsor" of the development of many products and services that "mature" through placement in tourism and become attractive to the wider market.

Teleworking and digital nomads are a new opportunity to revitalize rural areas. By 2035, a billion people are projected to live as digital nomads. Teleworking is useful for domicile young people, it creates the possibility of the return of young people and the possibility of the arrival of nomads. Most family accommodation, apartment, holiday home is chosen. What is important is the proximity of a larger city, staying in nature, opportunities for recreation in nature. Healthy food is in demand - fresh fruits and vegetables, so connecting agriculture with tourism, especially vegetables and fruit growing, goes without saying.

Opportunity for new vocational schools that combine hospitality and tourism

There are 100.000 households registered for catering services in Croatia. If we have only one child in each household, that is 100.000 children with a predisposition to learn hospitality skills (If we add the countries of the Western Balkans from which young people would like to study in an EU country where they can communicate more easily and already have acquaintances and friends, this number greater).

A new approach is needed - a hotel school, modeled on Switzerland, Austria, Bavaria, Italy (https://www.lhfs-bruneck.berufsschule.it/de/home). The Austrian Chamber of Commerce also has world-renowned vocational schools. The Tourist Academy teaches young people all the knowledge and skills that a hotel needs :(https://www.tourismus-akademie.at/de/ueber-uns/).

Partnership for the future

It is extremely good news that he is the co-organizer of the 8th Forum of Family Accommodation of the Istrian County School of Tourism, Catering and Trade Pula and one of the lecturers was Mrs. Gordana Nikolić, Dean of the Business School BY River. The main organizer is the Croatian Chamber of Commerce Pula, headed by President Jasna Jaklin Majetic.

We need this kind of partnership to create new staff in tourism, young people who know how to clean a room, cook a meal, mix drinks, use digital marketing… who can function anywhere in the hospitality and tourism and after all become top experts.

Work in a hotel and have extra income

We remember the times when we were educated with scholarships, worked in tourism every summer, were employed indefinitely and used our days off in winter at the expense of overtime hours in summer. We sold our agricultural products to the hotel house where we worked and the hotel house "filled our accommodation" through its home-made reception. The total income was such that we did not have the need to emigrate to another country, although wages in tourism and then as today were significantly lower than the average in the economy. It was, and still can be, a recipe for retaining a quality workforce in tourism and for halting negative demographic trends in society.

Sustainable and responsible tourism takes into account the needs of the local community, includes the local community, includes local products, includes local, traditional, cultural values.

A hotel cannot carry an eco-certificate if it does not employ at least 50% of the staff from the local community and does not comply with all of the above as well as a whole range of conditions from the environmental agenda.

Coexistence and cooperation for the benefit of all

Instead of the antagonisms that have developed over the last 30 years, sustainable tourism needs cooperation,
coexistence of the local community, small and large entrepreneurs in tourism, government and academia on an equal basis. It is a recipe for a successful future. Changes are inexorable - climate, energy, geopolitical, social, economic… Croatia is not and cannot be an exception. In times of crisis, we need to "put our heads together".

Nedo Pinezić, nedopinezic.com

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Author  Nedo Pinezić

6. April 2022.