In Croatia, we have 100.000 registered households with 600.000 permanent beds. 50% of tourist nights of the Republic of Croatia are realized in this capacity. 300.000 people, hosts and family members are directly involved in the activity. Immediately another 200.000 micro entrepreneurs and craftsmen, from plumbers to computer scientists.
We are the biggest investors and employers
Annually, this accommodation invests 100 million euros in current maintenance of facilities and another 100 million euros in new facilities. In total, family accommodation is the largest investor in tourism and the largest business creator. The total revenue generated based on this accommodation is about 3 billion euros per year. Accommodation alone accounts for up to 30% of total passenger consumption.
Shortness of breath measures
Reservations for the fourth, fifth and partially sixth months are currently canceled. There are still a few layoffs for the seventh and eighth and ninth months. However, for the first six months, there is certainly no traffic. The first measures of the Government of the Republic of Croatia were timely and effective.
In particular, the Ministry of Tourism reduced the flat-rate tourist tax by 50%, abolished the tax on extra beds and postponed the obligation to recategorize accommodation. For the first time, the Croatian National Tourist Board initiated informing the hosts about all measures through the "e visitor" platform. As far as income tax is concerned, the postponement of the first installment due on 31 March has been made possible, and the second installment due on 3 June has been forgiven.
Bearing in mind that 50% of the host population are pensioners with pensions up to HRK 2.000,00, the lack of income from tourism will hardly affect these households.
30% of "renters" also have a company or trade related to tourism
The hosts who have crafts and companies in tourism are also in big trouble, and they earn other income from accommodation services in the household. There are 30% of them. One part of the hosts are engaged in free professions, such as tourist guides or have seasonal trades, but they have not yet come to the rescue.
Write-off, not postponement
Due to all the above, it is required to write off all fiscal and parafiscal debts while there are no business opportunities. Also, the possibility of an interest-free moratorium on credit obligations for at least 12 to 14 months with all commercial banks is requested. In addition, the hosts are asking to be provided with interest-free borrowing from the Croatian Bank for Reconstruction and Development for micro loans of up to EUR 15.000,00 for the purpose of maintaining current liquidity for one year. These funds would cover the cost of living because there will be no necessary income from tourism.
Given that HBOR's credit line already exists for hosts to raise the quality of accommodation with a maximum amount of up to 50.000 euros, it is believed that the conversion of this line can enable people to borrow. These are all survival measures. All these requests were communicated to the Government of the Republic of Croatia through the Voice of Entrepreneurs association.
Recovery will take years
Recovery measures will have to be taken in the direction of lower benefits and relaxation of business conditions because all debts that have been postponed, or new ones that had to happen, will be collected by the recovery of tourism in 2021. This means that for at least the next three years, work will be done only to repay the accumulated deferred liabilities.
We also need to start changing the non-import economic model, which will stimulate the combination of agriculture and tourism, manufacturing and tourism.
It is expected that 20-30% of last year's tourist traffic will be realized
The first tourist traffic expected this season will be mostly domestic tourists, and tourists from neighboring Slovenia to rural areas of the coast (smaller towns) and hinterland, and the accommodation that will be sought first will be apartments, (especially with a separate entrance and private terrace ), holiday homes, mobile homes in campsites and to a lesser extent boats with sleeping cabins. The situation could be improved if there are no incidents in July and August, subject to the opening of borders in EU countries from which most foreign guests come.
In the age of social distance, we will have "contactless tourism" in which digital technology will be a complete intermediary between the guest and the provider of all services in tourism and hospitality. We will have real, experiential tourism only when effective drugs and vaccines against Covid 19 infection are put on the market. Only then will the measures of social distance be abolished and organized traffic by planes, buses and cruise ships be initiated.
Author: Nedo Pinezić, www.nedopinezic.com / Photo: Pexels.com