Niko Bulić, Director, Croatian National Tourist Bord Head Office
Five Stars Croatia Issue 2 — April 01, 2007.

From the point of view of tourism, the year we have left behind can be considered very good. Based on the physical indicators, registered arrivals and overnights, the turnover volume, which is 3% bigger than that of last year, has also broken a record.

When compared with the goals that were set, such as to reach the 2005 results with an inclination towards a 2% increase, we have the pleasure to announce that the expectations have not only been met, but also surpassed. 

On the other hand, the year was not simple and easy, partly due to the macroeconomic framework that affected it: a new VAT rate imposed on the organized foreign tourist circulation and cutting off  financial support (subventions) to tour operators, as well as a disproportion between the pricing policy of some destinations and the actual demand present in the markets relevant to us (France, Belgium, Germany, Ireland, Scandinavia, new EU member states). Moreover, we also had to deal with an unfavourable setup of accommodation capacity and underinvestment, particularly with regard to campsites offer, together with a particularly bad and rainy weather during the three weeks of the highest season in August, so that we may well say that we are more than pleased with the achieved results.

In 2007 we may well expect to repeat this year's record results, as well as to hope for 2% better physical and up to 5% better financial results. According to the current methodology of the Croatian National Bank, we are talking about up to 10.5 million of registered arrivals, 54 million of registered overnights and about € 6.5 bln in tourism revenue.

The greatest asset of Croatia being a tourist destination is the fact that we are the last unspoilt and beautiful part of the European part of the Mediterranean. Although Croatia is not new in tourism industry, it has still managed to preserve its authenticity, environment and the way of life in general. It offers a wide range of oenological and gastronomic delights and an extraordinary cultural and natural heritage. In a competitive surroundings we take pride in the hospitality, heartiness and spontaneity of Croats. While staying in Croatia, tourists are not isolated, but rather mingling with the local population. This is the very essence of tomorrow's tourism in general as well as of our present value and prospects of success in the future.

The state policy has created a stable macroeconomic framework for tourism, provided the protection of space necessary for sustainable development, the overall security and a full functionality of all public services relevant to tourism development. If the road infrastructure development is added to all that has been mentioned, all the arguments for a positive evaluation of tourism by the state policy are here. The "incentives for success" program has been well embraced enabling the operation of a number of small family hotels. What still needs to be examined is the reason for withdrawing subventions during the interim period before the full EU membership, as well as to address the eternal issue concerning the „rate of exchange" and its stimulating features for exporters and for the very tourism as it is.

As to privatisation, I will say that it is not the rate of it that is crucial. What is even more important is the future of the portfolio being sold and establishing the method of how to attain what has been agreed upon. It should be inarguable that, prior to any sale, any privatised company should have a clearly defined future that the very privatisation will stimulate, not put to a halt. What is vital for us is to „activate tourism potentials", which have been neither renewed, nor privatised yet and which can become purpose oriented employing new work force thus aiding the local economy and stimulating a new developmental growth without "eating up" the new space. Tourism developmental policy will have to seek for and offer an answer to these questions.

The 2006 season was crowned with a recognition of Croatia as a „rising star" in the way of tourism received at the London WTM Fair. We have been recognized as a tourism-oriented country priding itself in our comparative advantages and developed tourism. It is up to us not to let down these expectations, to justify the high place the country occupies and to follow in the footsteps of strategic marketing options in order to become a high quality tourist country. The country is given an award every year. We remain a highly popular destination although lacking quality hotels in the coastal as well as inland regions. Over 160 small family hotels having the capacity that can reach up to 50,000 beds are an extraordinary positive thing. These hotels manage to balance the development of the regions, the issue that deserves to be supported. Croatia has to find its place as one of the leading tourist countries not only in the Mediterranean, but also in the world while preserving harmony with nature. Croatia will thus affirm itself as a country promoting quality tourism on a constant rise. Although we have only just reinforced our position, we have to keep on making progress, learning from the experience of others and make tourism a source of a better life for us.