Tourist reservations for Croatia are growing at the moment, but at a slower pace than in the same period last year, and the season will be determined by the development of the situation in Ukraine and the impact of inflation on people's travel budgets, said Veljko Ostojic, director of the Croatian Tourism Association.
According to Ostojic, the booking practically stopped ten days after February 24 (the beginning of the invasion of Ukraine), which he considers logical consumer behaviour in times of uncertainty.
"We can assess the state of booking today, in terms of volatile financial vocabulary. When we assess the upcoming season from today's perspective, it is obvious that the pandemic will no longer be a factor, but it will be significantly affected by two things - possible escalation or calming of the war in Ukraine, and the impact of inflation caused by various factors and rising prices and how it will affect people's budgets for travel,” said Ostojić in an interview for Hina.
He believes that people will travel, because the desire to travel in many markets exists, as shown by research in our most important markets, but much will depend on prices, especially fuel, because Croatia is often a car destination.
"I think that the main holidays are not in question, but it is possible that there will be fewer short, weekend arrivals,” said the director of CTA.
When asked about prices and whether hoteliers will increase them due to economic influences, he said that an increase in the prices of a la carte services can be expected.
Accommodation prices were defined last year and contracts have been signed with tour operators, and something can happen to individuals, which will depend on demand and occupancy at certain times.
Labour shortage a serious problem for Croatian tourism
Hoteliers are raising wages for employees, but problems of labour shortages continue, both in the domestic labour market and with the import of workers.
However, Ostojic welcomes the government's new initiative to apply for residence and work permits for foreign workers during the season, which can now be submitted online, while the Interior Ministry has announced a significant acceleration in issuing permits within 15 days.
On the domestic market, according to Ostojic, not all opportunities to employ local people in tourism and other sectors have been used.
Problems with the import of labour are related to the fact that the procedures have not been accelerated enough yet, although he says that there are examples in Croatia in some cities where this is being resolved relatively quickly. "Problems in the labour market are being solved very slowly. There is a domestic labour market and imports of workers. We believe that with small changes in the domestic market, a lot can be done and employ local people,” commented Ostojić.
Among these small positive developments would be, for example, raising the threshold for exemption from income tax relief for a dependent from 15 to 30 thousand Kuna. Today, parents lose benefits if their child earns more than 15 thousand Kuna a year, which is extremely small and this threshold has not changed for years.
This would encourage part of the work potential, bearing in mind that in the "hospitality" industry around the world, the participation of student work is extremely high, says Ostojic.