Croatia’s luxury tourism sector is in turmoil as travelers cancel bookings en masse due to soaring prices. The introduction of the Euro and inflation above the EU average have contributed to the price hike. Can the country’s tourism industry recover, or is this the beginning of the end?
By August Roberts
The Euro and Inflation: A Double Whammy
As of August 24, 2023, Croatia has been grappling with a significant increase in the prices of accommodations, food, and other services. The introduction of the Euro as the new currency and an inflation rate higher than the EU average have been cited as the main culprits. This has led to a wave of cancellations, particularly affecting luxury accommodations.
The Domino Effect: Cancellations and Price Drops
Due to the high prices and other factors like wildfires, many travelers have canceled their bookings, especially for luxury homes with pools. According to Igor Popović, co-owner of the agency Adriagat, there has been a 20% decrease in bookings for such homes. In response, property owners have slashed their prices by up to 50%, but this has not had the desired effect. Travelers are now canceling other bookings in hopes of finding cheaper options.
The Online Booking Dilemma
Investigations on popular platforms like Booking.com and Airbnb have shown that prices for apartments along the Croatian Adriatic coast have dropped by 10 to 40% in the last ten days. However, this has led to a paradox where travelers cancel existing bookings to hunt for better deals, thereby exacerbating the issue.
Expert Advice: Plan Ahead
Tourism experts caution against relying too much on last-minute deals. Due to high demand and limited availability, it’s advisable to plan vacations as early as possible. Those who haven’t booked for the summer of 2023 can still find ways to save money, such as opting for vacation rentals over hotels, which usually offer cheaper per-person rates.
Croatia’s luxury tourism sector is at a crossroads. The introduction of the Euro and above-average inflation have led to skyrocketing prices, causing a ripple effect of cancellations and price reductions. While property owners are trying to lure travelers back with significant discounts, the situation remains precarious. The industry needs to find a sustainable solution to maintain its allure as a luxury destination while offering competitive prices.