August 17, 2021 – Up to 500 small Croatian hotels with forward thinking owners are hampered by Croatia’s draconian, outdated rules and regulations. The urgent matter will be discussed soon.
As Poslovni Dnevnik / Marija Crnjak writes, in a few days’ time at a meeting with Tourism Minister Nikolina Brnjac, this time on the initiative of the group of small luxury hotels – stories. The topic was already opened with Prime Minister Andrej Plenkovic at the industry meeting last week, as has since become known.
“We have many facilities that are de facto hotels that are falsely presented on rental platforms and operated as apartments or rooms, and therefore have significantly lower operating costs and tax burdens, which is why they represent unfair competition for small Croatians.” primarily geared towards families.
At the same time, we can say that it is precisely the segment of small Croatian hotels, which are classified as luxury throughout the country, achieving excellent business results, filling the budget and creating added value for the destinations. The Croatian government is aware of the problems and we will discuss the details with the relevant ministry soon, ”said Nenad Nizic, President of the Stories Group and owner of the Vestibul Palace Hotel in Split.
The aim is to develop new incentive measures in order to strengthen the segment of small Croatian hotels with currently around 400 facilities with great potential, but above all regulations have to be changed.
Small Croatian hotels still have the same standards as large ones, which causes high business costs and demotivates business people. The conversion of part of the private / apartment accommodation into small hotels with the opening of new facilities was one of the failed tasks of the previous tourism development strategy.
The 2013 national program for the development of small family restaurants envisaged the creation of a more appropriate and stimulating institutional environment for the development of small family restaurants through more flexible labor legislation, less rigid specification of minimum technical requirements and the establishment of financial or tax incentives. Unsurprisingly, absolutely none of this was ever actually implemented.
Anamarija Cicarelli, founder of a family accommodation advice center with many years of experience in renting rooms in and around Split, shared her experiences:
“As the former owner of a building with eight apartments that could accommodate 45 guests, I would very much like to convert it into a hotel, but it was too expensive due to some technical requirements.
For example, the law stipulates that a small Croatian hotel has an internal staircase, a reception, a breakfast room, and if I only invested in this, my project would not be sustainable, and at the same time there are many criteria that are no longer decisive for the quality of the service of a small hotel. There are many such examples on the market, we are meeting more and more owners looking to grow their business, but the current categorization requirements are putting them off, ”warned Cicarelli.
She pointed out that there are more and more landlords in Dalmatia who are moving from the status of a natural person in relation to the rental of real estate to legal persons due to the increasing turnover. This brings higher costs, but also a better credit rating and investment opportunities in quality and thus higher profits.
There are currently around 400 small family hotels throughout Croatia, for whose development several incentive measures were decisive at the beginning of this century, such as the Incentive for Success credit program and Under old roofs.
The Croatian eVisitor system shows that there are currently around 600,000 beds in private / family accommodation owned by natural persons, while 101,000 such beds are owned by legal persons. Almost 400 private hotels with breakfast service are available on Booking.com in September.
This represents a proverbial pool from which at least another 500 small Croatian hotels could be recruited. If Austria and Greece each have 10,000 such hotels and there are over 23,000 in neighboring Italy, this would only be the beginning of a more serious and rational development for Croatia.
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