Croatia: Will high prices stifle the tourism upswing after Schengen accession?
Jürgen Strassburger
· 27.06.2024
Croatian tourism experts were hoping for further lasting positive effects from the country's inclusion in the eurozone and its accession to the Schengen area on 1 January 2023. However, the data for the past year published by the country's state statistics office at the end of April point in a different direction.
The number of yachts in transit in the ports fell by 4.3 per cent compared to 2022. This is despite the fact that the number of berths in marinas, buoy fields and anchorages as well as the number of berths in boat storage facilities on land has increased almost constantly since 2002: from 13,900 berths to 19,100. But who uses them and to what extent?
A distinction must be made between two groups of users: permanent moorers, i.e. boats whose owners have signed a mooring contract for at least one year. There are the transit boats. Every yacht, whether owned or chartered, that calls at a marina where it is not registered as a permanent berth holder is statistically recorded as a transit boat. The more harbours a boat moors in as a day mooring in the course of a year, the more it contributes to the increase in transit figures.
Developments for permanent residents in Croatia
The total number of permanent berths rose from 11,174 in 2002 to 16,482 in 2023, an increase of 47.5 per cent or an average of 2.3 per cent per year. However, this increase was lower than the growth in available berths: From 2009, the number of permanent berths fell despite the increasing supply of berths.
The same trend can be seen for transit boats. The 2008 financial crisis was a major cause of this slump. It was not until 2017/2018 that there was a slight upward trend again in both categories, reaching a temporary peak in 2019.
The correlation between available berths and their utilisation by permanent berth holders describes the utilisation rate of a port. This has been very volatile since 2003, fluctuating between 76.8 per cent in 2020 (Coro- na!) and 89.4 per cent in 2008. This shows that a quantitative increase in supply is by no means accompanied by an increase in demand to the same extent. In concrete terms, this means that there was permanent excess berth capacity in relation to the number of permanent berths.
However, these benefit transit guests, who are dependent on free berths. The fact that the balance between supply and demand only occasionally gets out of hand in high season phases and in a few harbours exposed to tourism shows that the current ratio is in order.
The number of transit boats was less stable than the number of relatively loyal permanent residents. After reaching a high of 220,875 boats in 2007, it fell for seven years - undoubtedly as a result of the 2008 financial crisis. It was only from 2015 onwards that it rose moderately to just under 205,000 transits in 2019.
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Pandemic-related changes in nautical tourism
And then the crash: Corona kept the world on tenterhooks in 2020, bringing life and tourism to a virtual standstill. If you look at developments before, during and after the pandemic and put them in relation to the harbours' income from berth rentals, a disaster becomes apparent for 2020. The number of transit boats plummeted by 40.7 per cent in the first year of coronavirus compared to the previous year.
As things could hardly get any worse, it was assumed that things would pick up again in 2021 as the pandemic subsided. That's exactly what happened. What's more: surprisingly, the figures for transit passengers and permanent residents even rose above the level of the previous record year 2019 before coronavirus. Transit passengers increased by 9.8 per cent compared to 2019, while the number of permanent residents rose by 9.6 per cent! This is also reflected in the income from mooring fees, which increased by 9.7 per cent compared to 2019.
Trend of rising mooring fees
What is striking, however, is that despite all the fluctuations in permanent and transit guests over a period of 20 years, the marina operators' income has always increased. This can be explained by steadily rising mooring fees. From 2002 to 2023, they rose from 216 million euros to 1,148 million euros. That is an increase of 531 per cent.
The consequences: High mooring fees, not only in marinas, are certainly partly responsible for the surprising 4.3 per cent slump in transit figures in 2023, with crews avoiding the expensive ports and preferring to anchor. The proportion of charter boats, which are extremely mobile and therefore particularly important for transit figures, has shrunk significantly: charter agencies and direct providers are predicting a five per cent drop in bookings for 2023 and expect an even worse result for 2024.
Croatian tourism experts also see the general price trend after corona as the cause of the slump. In Croatia, the inflation rate rose from 2.72 per cent in 2021 to 10.67 per cent in 2022. Last year, it fell slightly, but still amounted to 8.39 per cent.
Price drivers in the nautical sector in Croatia
The main price drivers in the nautical sector were daily mooring fees. In 2023, they amounted to an average of 102 euros for a twelve-metre boat in marinas. This was an increase of 24.4 per cent compared to 2022. Mooring at a mooring buoy cost up to seven euros in 2023. In 2020, a maximum of 3.50 euros was due. The daily fee for the Kornati National Park also rose: by 11.8 per cent to 95 euros.
The catering trade has also increased its prices. In spring, a portion of mussels on the islands of Zut and Solta cost 18 euros and a rump steak 35 euros. A glass of house wine cost eight euros and half a litre of beer seven euros. This can no longer be explained by the change from the kuna to the euro.
It will therefore be interesting to see how many water sports enthusiasts will still be willing and able to accept the price increase in the future. Many charter crews are already only booking one week instead of two. Who knows whether they will soon be looking for alternative sailing areas. It wouldn't be surprising.
