Market Report: Zagreb & Belgrade

By Siniša Topalović on November 30, 2016

MR78 Zagreb Belgrade 1

Sinisa Topaliovic, Managing Director of Horwath HTL in Croatia, and Branislav Miletic, Director at Horwath HTL in Serbia, have written the 78th Issue of our Special Market Reports serie, focusing on Zagreb and Belgrade tourism and hotel market.

Extract from our Zagreb and Belgrade tourism and hotel market report

Positive changes in macroeconomic environment and increased business activity in Croatia and Serbia, pushed Zagreb and Belgrade to become visible and more interesting to tourists and investors. A notable, double-digit annual growth in number of overnights in both Zagreb and Belgrade over the past couple of years, together with constantly improving air accessibility, indicate the cities have potential to become new hot spots in this part of Europe. Existing gaps in specific accommodation types open space for smart investments, that will capitalize on new markets that show interest for both cities and further support their increasing market performance.


Despite challenging external environment, with political, institutional and policy uncertainty in advanced economies, economic situation in Western Balkan countries has recovered. Croatia returned to positive growth in 2015, after more than five years of recession. Croatia has seen particularly strong recovery of tourism related investments over last two years coupled with revival of industrial and trade activity followed by decreasing unemployment rate. As a result of structural reforms and consolidation measures, growth is projected to rebound in Serbia in 2016, supported with new investments, leading the way to new employment and increased consumption. In addition, Serbia has made some remarkable improvements in the overall business environment and earned its position among global top 10 performers in this year’s edition of the World Bank’s Doing Business Report.

Zagreb and Belgrade have been considered for a long time as second tier European cities from tourism perspective. Considerably, there has not been significant nor intensive project development pipeline related to new hotels. However, it seems that long-time status quo has started to change on both markets. Recovery of macroeconomic indicators, together with growing economic activity as well as EU integration effects have slowly started positive processes in both cities.


About the author

Siniša Topalović