Identifier
Created
Classification
Origin
09ZAGREB3
2009-01-07 15:19:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Zagreb
Cable title:  

OFFICIAL DATA SHOW RISE IN CROATIAN TOURISM FOR

Tags:  ECON HR 
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RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHVB #0003/01 0071519
ZNR UUUUU ZZH
P 071519Z JAN 09
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8893
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
UNCLAS SECTION 01 OF 02 ZAGREB 000003 

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON HR
SUBJECT: OFFICIAL DATA SHOW RISE IN CROATIAN TOURISM FOR
2008; UNOFFICIAL SUGGEST OTHERWISE

UNCLAS SECTION 01 OF 02 ZAGREB 000003

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON HR
SUBJECT: OFFICIAL DATA SHOW RISE IN CROATIAN TOURISM FOR
2008; UNOFFICIAL SUGGEST OTHERWISE


1. (U) Summary: According to official statistics, Croatia saw
a 1.9 percent rise in the number of visitors for the 2008
season, but anecdotal evidence from businesses suggests the
statistics may not be entirely accurate and there may already
be a significant downturn in this critical industry.
Regardless of the results of the 2008 season, the GOC and the
industry are bracing for a weaker season in 2009, hoping at
least to maintain 2008 levels through stepped-up promotional
campaigns. Tourism is, by most accounts, the most important
industry in Croatia. The willingness of tourists to return in
large numbers next summer in the face of an economic crisis
will be a key factor in determining Croatia's success or
failure in weathering the economic challenges ahead. End
summary.


2. (U) According to data from the Croatian Bureau of
Statistics (CBS),Croatia again saw a rise in tourism for the
2008 season. Comparing January through August 2007 to the
same period in 2008, the number of tourists rose 1.9 percent
to 9.2 million and overnight stays rose 2.6 percent to 48.7
million. As in 2007, Germany sent the most visitors, followed
by Italy, Slovenia, Austria, and the Czech Republic. However,
with the exception of Slovenia, which showed a 3 percent
increase, these top five source countries did not contribute
to the overall rise in number of tourists, as their numbers
stayed the same or fell compared to 2007 levels. The number
of the visitors from the U.S. fell from 119,500 in 2007 to
108,300 in 2008, a 9 percent drop. Regarding destinations
within Croatia, the coastal areas continued to draw the most
tourists, but many inland counties also saw an increase in
visits. Reflecting the continued popularity of the coast, the
number of cruises stopping in Croatian ports increased from
390 to 540 (39 percent) and the number of passengers
increased from 436,200 to 621,500 (43 percent).


3. (SBU) Some have questioned whether the CBS data accurately
portray the 2008 tourism season. The CEO of Adriatica.net,
Croatia's largest tour operator, responsible for one third of
bookings in the country, told us that the rise in the raw
number of tourists is probably accurate, but that fewer
tourists are staying in hotels, opting instead for bookings
in private homes. According to him, this change in travel
patterns is the result of poor development and organization
in the sector and caused a drop in overall revenue from
tourism. Charlotte Ruhe, director of the Croatian Office of
the European Bank for Reconstruction and Development (EBRD),
told us she did not believe the official statistics either
and thought the strong numbers reflected methodology choices
more than the true situation. The hotels EBRD supports
reported throughout the season that overnight stays were down
from 2007 levels. Raising other questions about tourism's
economic impact, recent analysis by the Croatian Institute
for Tourism suggests the industry may be responsible for 10
percent of GDP rather than the 20 percent usually cited. Even
at 10 percent, however, tourism forms a larger part of GDP
than in other European tourist-destination countries, such as
France, Austria, and Slovenia.


4. (U) Even the overall positive CBS data showed a turn for
the worse into the fall. Compared to September 2007, the
number of tourists dropped 6 percent and overnight stays
dropped 2 percent. Although October again showed increases,
both the government and the industry are bracing for the
effect of the global economic slowdown on the 2009 season. In
November, Minister of Tourism Damir Bajs announced he would
double the advertising budget. Milo Srsen, assistant director
of the Croatian Tourism Association, told us the goal for
2009 is to prevent a drop in tourist visits or perhaps
achieve a 1-2 percent increase. As about 80 percent of
tourism in Croatia is by foreign visitors, promotion efforts
will focus on foreign markets, particularly those within
driving distance of Croatia. Since 2000, Croatia has been
working to move from a focus on mass tourism to more higher
end -- and hopefully higher profit -- offerings. So far, the
Ministry of Tourism has not suggested it will change that
strategy in response to the economic situation, and it also
publicly denies the sector will cut prices for the 2009
season.


5. (U) Comment: Regardless of its exact share of GDP, tourism
is critical to Croatia's economy. In particular, it is a
significant source of export revenues, in a country that saw
a 17 percent increase in its already large trade deficit
during the first ten months of 2008. With little indication
other industries can do much to boost exports, a drop in
tourism in 2009 would have a noticeable effect on the
economy. However, preventing a drop may require more than
stepped-up advertising. If tourism does prove vulnerable to
the global economic slowdown, as most expect it will, it will
reinforce the message that Croatia should strengthen other
sectors of the economy to reduce its heavy reliance on

ZAGREB 00000003 002 OF 002


tourism. End Comment.
BRADTKE