As we leave Q3 behind us, we also leave behind the bulk of Croatia’s usually booming tourist season as well. Since this year was all but usual, we take a closer look at the latest information published by the Croatia’s National Tourist Board regarding the number of arrivals and overnight stays in order to see just how much damage can we expect to see when Croatia’s tourists publish their Q3 results.
For years Croatia has been experiencing a strong growth in tourist arrivals and overnight stays on the back of an attractive tourist offer and later due to the status of safe destination while some Mediterranean countries were experiencing political turmoil.
Croatia’s Historic Arrivals & Overnight Stays
However, this time not even all of Croatia’s competitive advantages were enough to retain the amount of tourist activities witnessed in previous years. As the COVID-19 pandemic has significantly diminished the World’s tourist industry, Croatia’s tourist sector has suffered as well. Due to measures imposed which prohibited people from traveling and the fear of infection, Croatia recorded a 60.7% YoY decrease in arrivals and a 49.1% YoY decrease in overnight stays during the 9M 2020 period. When looking at the busiest part of the year, the third quarter, September was the worst performing month (in relative terms). Namely, in September 2020, Croatia observed a fall in tourist arrivals by -76.5% and a fall in tourist nights by -62%. The high decrease in arrivals could somewhat be explained by the increased restrictions imposed by some European countries, which made traveling complicated.
Meanwhile in the 9M period the average number of nights spent in Croatia has increased from 5 to 7. This comes as no surprise, as tourists remained longer at one place, rather than traveling to multiple destinations due to the travel restrictions imposed.
Croatia’s 9M 2020 Arrivals & Overnight Stays
As June – September account for the vast majority of the Croatian tourist season it is also worth looking at the value of taxable invoices to further observe the impact of a lower performing tourist season. According to the Tax Administration of the Republic of Croatia in the period from 24 February until 27 September 2020, the value of taxable invoices dropped by 18.4% YoY (or HRK 23.35bn) in the period from 24 February till 27 September. Drop in taxable invoices in wholesale and retail trade in the same period was only at 9.97% while drop in accommodation and food services was at 46.6%.
Hotel Occupancy
Since Croatian tourist companies generate most of their revenues through their hotel segment it is worth taking a closer look at the net occupancy rate of bed-places.
As one can see from the table, the occupancy of hotel beds during the peak of the season has been almost full in all of the observed years prior to the COVID-19 pandemic, meaning that the demand for hotel accommodation in Croatia was met by the supply. When looking at the number for July one can notice that the occupancy was sliced in half, and while the numbers for August haven’t been published just yet, we can expect them to be marginally better, but still way below what we were accustomed to.
Net Occupancy Rate Of Bed-Places And Bedrooms In Hotels And Similar Accommodation (%)
| wdt_ID | Month | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|---|---|---|---|
| 1 | January | 13,40 | 14,30 | 15,90 | 16,10 | 18,40 | 20,50 | 18,20 | 19,20 |
| 2 | February | 18,30 | 19,10 | 21,20 | 22,90 | 26,60 | 26,50 | 28,60 | 27,30 |
| 3 | March | 23,80 | 22,50 | 22,50 | 27,00 | 27,20 | 30,10 | 30,80 | 12,80 |
| 4 | April | 31,40 | 34,40 | 34,10 | 32,60 | 46,30 | 42,20 | 45,40 | 2,60 |
| 5 | May | 47,60 | 44,60 | 47,20 | 49,10 | 49,40 | 55,70 | 52,70 | 3,90 |
| 6 | June | 64,40 | 66,00 | 66,50 | 65,80 | 77,50 | 74,60 | 75,70 | 21,20 |
| 7 | July | 87,60 | 84,80 | 90,70 | 94,40 | 95,90 | 94,30 | 93,20 | 47,00 |
| 8 | August | 96,70 | 92,50 | 97,40 | 98,40 | 98,30 | 97,30 | 98,00 | 0,00 |
| 9 | September | 68,50 | 66,70 | 69,80 | 75,40 | 72,80 | 73,10 | 71,50 | 0,00 |
| 10 | October | 37,00 | 37,70 | 36,30 | 41,00 | 44,10 | 54,60 | 49,20 | 0,00 |
Source: Eurostat, InterCapital Research
This also raises an additional question. Before the breakout of the COVID-19 pandemic the number of beds in private accommodation was rising much faster than the number of beds in hotel accommodation. Back then, this didn’t play a major role as hotels had consistently been operating at full capacity during the summer and with a higher number of arrivals, they were able to steadily raise their room prices.
However, now as consumer habits change, and visitors are asked to keep a safe distance from one another the large number of private accommodations which offer greater privacy poses a significant threat to the recovery of the hotel segment. Now, the question remains will Croatian tourists be able to handle the new normal.
