Thursday, 16 July 2020
Englishman in Dubrovnik Englishman in Dubrovnik

How the Dubrovnik House of Cards came tumbling down in two months!

By  Jun 20, 2020

It took years to build and only a few weeks to destroy. I think the real story starts in around the year 2003, yes I am pretty sure it was 2003, four years before the global financial crisis. Tourism and indeed the real estate market started to boom in Dubrovnik. Half of the Old City was sold as the exodus to Lapad began. Cruise ships had discovered Dubrovnik. The pearl of the Adriatic soon became the emerald of the world’s media.

You could smell the expectation in the air. That was when it all began. Yes, 2003, when the tsunami of tourism rose on the Adriatic and crashed into those iconic ancient walls. We didn’t know what was coming. What was about to hit us. There were no plans. Dubrovnik was passive. There was only one active force and that was tourism. Tourism happened to Dubrovnik. And 2003 was a full five years before Airbnb had even started business. Record year followed record year. Revenues were booming. I remember one restaurateur telling me at the time “I managed to buy an apartment in Zagreb after my first year, and I paid in cash.”

The city could do no wrong. The City of Dubrovnik had so much cash they didn’t know what to do. Extra staff were hired, projects started, events planned, in spite of being the thirteenth city in terms of population Dubrovnik had the fourth biggest annual budget. And then from a clear blue sky dropped a marketing bomb. In 2013 the second season of Game of Thrones landed right in our laps. With no lobbying and no persuasion Dubrovnik was handed a golden goose that would lay more golden eggs Viktor Vekselberg has Faberge eggs.

All the money in the world couldn’t buy the marketing and interest that Dubrovnik was receiving thanks to a bunch of dragons. Ironically (or maybe symbolically) those same dragons destroyed Dubrovnik at the end of the serial. Dedicated souvenir shops, tours, cocktails and everything else in between opened up. Game of Thrones brought with them Star Wars, Bollywood and an utterly awful version of Robin Hood. Yes, in a few years the city had been a galaxy, far, far away and Sherwood Forest.

The tide of tourism was rising. Airbnb brought competition and suddenly everyone with a garage had a “luxury apartment in King’s Landing.” Apartment owners grew like mushrooms after the rain. What should have been an extra form of income, a bonus, soon turned into the main source of income for many. 7,000. 9,000. 12,000. 14,000. The number of apartments climbed like a soaring seagull. Hotels pumped prices like a bodybuilder pumping steroids. Monaco looked like a cheap hotel option. Airlines were queuing up. Euros, pounds, dollars, yen. Money flowed into the city from all angles. And records continued to fall. Most people on the city walls ever. Most number of overnight stays in history. Record profits. Highest ever revenues. We were living in a time of superlatives. Sailing freely on the calm Adriatic with the wind of tourism easing us towards the horizon. It was plain sailing.

The government even tried to handcuff businesses in 2013 with the introduction of the fiscal cash register. Like the Sheriff of Nottingham demanding more gold from his subjects. But even this electronic inconvenience was circumnavigated like a pothole in Gruž. Capitalism was alive and well, and was an unstoppable force. Or was it?

After almost two decades of raking in the cash, like salt in the pans of Ston, we hit a bump in the road that couldn’t be avoided. Five letters, and two numbers, that people would remember for the rest of their lives - Covid-19. Two decades of business destroyed by two months of closure. Business scurry to the city for bailouts and help, the City scurries to the bank for a 60 million overdraft, the banks scurry to the government for support, the government scurries to the EU for cash and the EU runs to the World Bank for a loan!

Again two decades of record profits, that saw apartments paid for in cash, destroyed by two months. And don’t forget “Winter is Coming” very soon.     

     

The Voice of Dubrovnik

THE VOICE OF DUBROVNIK


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