Croatian Tourism's Contribution to Economic Growth Declines Amid Rising Prices

Strategic Insights -

Croatian tourism, which has historically been a significant contributor to the country's economic growth, is showing signs of decline. According to Croatian National Bank Deputy Governor Sandra Svaljek, the number of overnight stays has stagnated in recent years, with other Mediterranean countries overtaking Croatia in the market. The prices of tourism-related services have skyrocketed, making Croatia's prices comparable to those of Italy and France. Despite this, tourism revenues in Croatia are still rising, albeit slightly, primarily due to higher prices rather than real consumption.

Key Takeaways:

  • The number of overnight stays in Croatia has stagnated in recent years, with a decline in market share compared to other Mediterranean countries.
  • Prices of tourism-related services have skyrocketed, with Croatia's prices now comparable to those of Italy and France.
  • The real spending of foreign guests has declined due to rising prices, with tourists looking for other destinations.
  • Tourism revenues in Croatia are still rising, but only slightly, primarily due to higher prices rather than real consumption.
  • Wages in Croatian tourism have not risen as they have in other countries, with a decrease in unit labour cost.
  • Investment in the construction sector does not contribute to growth potential, producing effects only in the years when projects are implemented.
  • Tourism and construction have been the strongest drivers of Croatia's economic growth.

Statistics:

  • The number of overnight stays in Croatia has stagnated, while other Mediterranean countries have seen growth.
  • Croatia's share of the Mediterranean market has fallen, with other countries overtaking it.
  • Prices of tourism-related services in Croatia have increased by a significant margin, making it comparable to Italy and France.
  • Real spending of foreign guests has declined by [no specific percentage mentioned].
  • Tourism revenues in Croatia are rising, but only slightly, at [no specific percentage mentioned] annually.
  • Unit labour cost in Croatian tourism has decreased, contrary to the trend in other countries.
  • (Hina) does not provide specific data on investment in the construction sector.

Sources:

  • Hina, "Croatian tourism's contribution to economic growth declining, despite strong demand", September 13, 2023.