Higher prices fuel Croatian tourism revenue growth, but sustainability concerns loom
- by croatiaweek
- in News
Data from the Tax Administration on fiscalisation collected up to the penultimate day of August indicate that Croatia experienced the peak of the tourist season with slightly higher revenue than last year, despite similar levels of activity in both tourism and retail sectors.
This suggests that accommodation services, as well as restaurant and café prices, have increased, with further rises in August compared to July.
August remains, for now, the most financially robust month for Croatian tourism, daily Jutarnji list reported.
As of 30th August, revenue from accommodation providers and caterers who issued fiscalised invoices in August increased by just over 11 per cent compared to August 2023, reaching a total of €1.5 billion, with only a 1 per cent increase in the number of invoices issued (58.2 million invoices).
Last August, 57.6 million invoices were issued in the tourism sector, amounting to €1.35 billion.
In the retail sector, there were 161.5 million invoices this August, totalling €3 billion, slightly down from 163.4 million invoices issued last August. However, the value of the issued invoices last year was several percentage points lower. In other words, slightly fewer purchases were made, but at somewhat higher prices.
In July, the increase in both the tourism and hospitality sectors was 5.36 per cent in the number of invoices and 8 per cent in revenue. This July, 59 million invoices were fiscalised in these sectors, with a total value of €1.34 billion.
Of this, accommodation accounted for 5.5 million invoices (+1.85%) with a total of €603.7 million (+5.4%), while restaurants and cafés issued 53.6 million invoices (+5%) with a total value of €738 million, representing an 11 per cent increase in euros compared to last July.
Double-digit Revenue Growth, But Concerns for the Future
In August, accommodation providers issued 5.8 million invoices (+2%) amounting to €680 million, which is 13 per cent more than in July and 5 per cent more than in August last year.
Meanwhile, caterers processed €768 million through 52.4 million invoices by 30th August, compared to last year’s €706 million with a slightly lower number of invoices.
In other words, in August, restaurants and cafés achieved nearly 9 per cent more revenue with almost the same number of invoices. Interestingly, there have been recent complaints from the sector about a dramatic decline in activity, which is attributed to an increase in supply, particularly in family-run accommodations.
Despite the strong revenue figures, there is growing concern that Croatia’s rising prices may be deterring tourists.
While many visitors came this year, a significant number have expressed dissatisfaction with the perceived imbalance between price and quality.
As a result, there is speculation that these tourists may not return next year, opting instead for more competitively priced destinations.
The surge in revenue may thus be short-lived if the trend of increasing prices continues without a corresponding enhancement in service quality.
Croatia will need to carefully assess its price-to-quality ratio to ensure that it remains an attractive destination in an increasingly competitive global market.
According to the latest official projection from the Croatian National Bank (HNB) in June, revenue from foreign tourists’ spending could increase by 4 per cent or €600 million for the whole of 2024, reaching €15.2 billion, Jutarnji list says.
Although this year’s rhetoric from tourism authorities has avoided using the term “record,” some have already boasted record numbers, particularly emphasising growth outside the main season.
Dubrovnik
For instance, Dubrovnik announced just a few days before the end of the month that three million overnight stays had been achieved two weeks earlier than last year, with a total of 10 per cent more overnight stays since the start of the year.
Tourist arrivals also increased by 10 per cent, totalling around 947,000.
City officials note that the double-digit growth has been secured by increasing the number of overnight stays during the pre-season and maintaining the same level of overnight stays during the peak season as in 2023, which aligns with their strategic goals.
