Hostel Supply Outstrips Demand

A hostel boom over the last 24 months in Croatia’s capital Zagreb has left a number of proprietors being forced to close their doors…

“Imagine how it is when for a week nobody comes to stay at the hostel. That is when it starts to go bust,” the owner of Chic Hostel in Zagreb’s centre, Vinko Horvat, told daily Vecernji list, adding that he has put his business up for sale just two years after opening.

A number of hostel owners have said that the summer season was an excellent one this year, however some will not survive and will close down over autumn and winter. There are now 43 hostels in the city, with 5 opening in the last month, up 40% from the past 18 months. Around 140 hostels exist now in Croatia, but it is Zagreb which has grown the faster than the rest of the nation.

Horvat says that supply of hostels has now outstripped demand. A number of hostels will be forced to trade being the months of April and October, which is not the best business model.

“We do not want to trade at a loss during winter. So much competition has driven us to this crisis, but we at least manage to trade for a half a year.

The first hostel in the city, Omladinski hostel located in Petrinjska street, opened in 1963.

“Till 15 years ago we were the only hostel in town, and now there has been what we call a hyper offer of hostels. Of course they have a negative impact on our business. Our numbers are secret, but we are still surviving,” said director Ivica Nikolac.