Croatia: Hotel Industry Covid-19 Impact
By Lana Delač on August 18, 2020
Croatia: Hotel Market Sentiment Survey
Horwath HTL Croatia conducted a sentiment survey to monitor and assess the impact of the COVID-19 pandemic on the Croatian hotel industry.
According to the results of a survey, expectations on business performance for 2020 are very pessimistic. Revenues are expected to decrease by more than 55% compared to the previous year, mainly due to the very low occupancy levels. Hoteliers expect that crisis will last for at least 6-12 months, while full recovery is expected in mid-term.
As time is passing and the number of COVID-19 cases is increasing, expectations are becoming even more pessimistic, encouraged by constant travel regulation changes and negative media coverage on key source markets.
- Soon after COVID-19 appeared in Croatia, hoteliers promptly introduced strict cost control, primarily through reducing the cost of employees, closing the hotels and/or postponing the capital investments.
- The government also acted promptly and supported the industry by offering number of incentives with the main goal of ensuring liquidity and saving jobs. Therefore, use of the government support was a key risk mitigation measure during the past few months.
- As a result of pandemic, hoteliers expect significant drop in overall performance. In 2020 hotel revenues are expected to decrease by almost 60% on average, mainly due to the very low occupancy (average decrease of -55.7%).
- As a highly affected industry, hoteliers consider government should further support business through tax rebates (77% of respondents), wage support (74%), loan moratoriums (66%) and lower interest rates (53%).
- Full business recovery is expected in a mid-term period.