Hotel sector sees profitability decline in 2009, expects growth in 2010

BOL, 25.10.2009.

Profitability in the Croatian hotel sector continued to fall in 2009, and the decrease is estimated to reach 15 percent by the end of this year.

Despite these trends and forecasts about the tough 2010 year, 35 leading Croatian hotel companies expect a 5-percent rise in demand and overnight stays and a 10-percent rise in their income next year.
These estimates, based on studies and analyses conducted by the Institute for Tourism and the Croatian Association of Hoteliers were presented by an Institute researcher, Neven Ivandic, at a forum of hoteliers held within the Croatian Tourism Days in Bol on the island of Brac on 21-23 October.

In the first eight months of 2009, hoteliers reported a 1-percent decrease in the sales and the reduction of business costs by 3 percent, which was similar as in 2008. This could be ascribed to the flexibility of management that found ways to protect revenues alongside offering lower prices, Ivandic said.
The continuation of decreasing profitability, which is identified by the hoteliers' association as the sector's major problem, should prompt companies to try to improve their internal efficiency, the researcher said.
A representative of small and family-run hotels, Zoran Katic said that small hoteliers had helped themselves to the largest extent by their own creativity and harder work.
The CEO of Riviera Porec hotel company, Veljko Ostojic, called for the adoption of a tourism development strategy and the reduction of the Value Added Tax and other taxes on the hotel sector's services and products.

Tourism Minister Damir Bajs said that although the results in the hotel sector had so far been better this year than expected, there was no room for satisfaction as long as the hotel sector's share in the total accommodation was slightly over 10 percent. (Hina)