Valamar Riviera’s nine-month 2025 results, released last Thursday, once again confirmed what the tourism statistics have been hinting at all year – Croatia is on track for its strongest tourism season ever, surpassing the pre-pandemic benchmark of 2019. The Company exceeded analyst’s expectations, providing a solid confirmation of both its own performance and the broader success of Croatia’s tourism sector.
As it stands, 2025 is shaping up to be Croatia’s most successful tourism year to date, surpassing the 2019 benchmark and setting a new standard for the industry, a trend we have anticipated throughout the year. However, headline figures such as total arrivals, overnight stays, or tax revenues only tell part of the story. The true measure of success lies in how the sector addresses its structural weaknesses, namely, seasonality and the shift from mass-market, mid-range tourism toward higher-end visitors and premium services.
As shown in the graph below, private accommodation remains the most seasonal segment, heavily dependent on the two peak summer months. Campsites show a somewhat stronger pre-season performance, while hotels exhibit the broadest seasonal distribution, operating longer into both the pre- and post-season. This type of all-year tourism is a hallmark of mature markets, as it helps reduce negative externalities such as overcrowding, pollution, and the broader unsustainability of short, high-intensity seasons.
Monthly % of total number of tourist nights by types of accommodation (2024, %)
Source: HTZ, InterCapital Research
Croatia is only beginning this structural transition. The number of beds in private accommodation continues to grow rapidly, outpacing hotels and camps. Yet, overnight stays and occupancy rates in private accommodation are now declining, while hotels remain stable and maintaining the highest occupancy due to their extended season, and camps continue to gain ground.
As for emissive markets, Germany remains Croatia’s largest and most stable contributor, and with Austria stands as the most important market for Valamar. Meanwhile, Central and Eastern European countries, particularly Poland, Hungary, Czechia, and Slovakia, now account for nearly one-fifth of all tourist nights, underscoring their growing strategic importance and long-term potential. At the same time, the United Kingdom and the United States continue to record strong growth rates (accompanied by new air travel lines), driven not only by rising visitor numbers but also by their higher purchasing power, which supports the ongoing shift toward upscale tourism. The strengthening of Croatia’s domestic market further reflects the country’s improving economic conditions and living standards. An increasing number of Croatians are opting to spend their holidays along the Adriatic coast, despite persistent media debates about pricing, service quality, and overall value perception.
Turning to Valamar Riviera’s financial performance, the Company reported record nine-month revenues of EUR 433.4m in 2025, marking a 10.5% YoY increase. The strongest growth was recorded on the island of Rab (+33% YoY), driven by the successful opening of the new Arba Resort. Adjusted EBITDA rose 11.8% YoY to EUR 165.2m, accompanied by a 0.5 p.p. margin expansion. This performance was supported by higher operating revenues across all destinations, increased average selling prices, a larger share of direct bookings, and the consolidation of the Austrian portfolio. Finally, net profit surged 28.0% YoY, reaching EUR 92.6m, further underscoring the Company’s strong operational and financial momentum heading into the final quarter.
Valamar Riviera key financial metrics (9M 2024 vs 9M 2025, EURm)
Source: Valamar Riviera, InterCapital Research
A key driver of operating expenses remains employee costs, which increased 13.4% YoY, primarily as a result of higher minimum wage levels. This continues a multi-year trend of double-digit wage growth, which has pushed total labor costs up by roughly 50% since 2020, notably above the EU Mediterranean average of 36.9%. However, with the government’s new minimum wage policy projecting a more moderate 8.25% increase in 2026, the period of steep wage escalation appears to be coming to an end. As a result, Valamar may experience some relief from labor costs pressures, allowing for greater stability in operating margins going forward.
For the full year 2025, Valamar expects to generate revenues between EUR 457-461m and adjusted EBITDA of EUR 128-131m, implying 9.6-10.5% revenue growth and a 6.1-8.6% increase in EBITDA compared to last year. Looking ahead to 2026, the Company projects EUR 500m in revenue and EUR 150m in adjusted EBITDA, supported by continued portfolio expansion and operational improvements. Valamar also plans to invest approximately EUR 150m in capital projects, most notably the Pical Resort – the largest single investment in Croatian tourism and the Company’s flagship hotel. The resort is scheduled for a soft opening in spring 2026 and will be fully operational by the peak summer season, reinforcing Valamar’s long-term focus on premium hospitality and sustainable growth.
Valamar Riviera full year 2025 and 2026 expectations (EURm)*
Source: Valamar Riviera, InterCapital Research
*for 2025, the lower end of the range is presented
In conclusion, 2025 is on track to become a record-breaking year for Croatian tourism, barring any major disruptions in the final months. As the country’s largest hospitality operator, Valamar Riviera stands to be one of the key beneficiaries of this exceptional season – a trend clearly reflected in its strong nine-months results. Looking ahead, favourable macroeconomic conditions such as the recovery of the German economy and above-average growth from CEE markets are expected to further support demand. Meanwhile, the UK and US continue to emerge as high-value markets, contributing to revenue quality rather than just volume. At the same time, the slowdown in wage growth may ease pressure on operating margins, while continued strategic investments will enable Valamar to sustain average price growth, provided that the enhanced quality and guest experience continue to justify its premium positioning.