(This is the English verison of a column that ran in the daily newspaper Jutarnji List today.)
Croatia should end its obsessive affair with tourism. It’s a dysfunctional relationship that has only left the country in tears.
An Expat in Zagreb
By Roger MaloneCroatia should end its obsessive affair with tourism. It’s a dysfunctional relationship that has only left the country in tears.
And by tears, of course, I mean economic doldrums that have
lasted for more than five years, even as most other countries recovered from the
2008 global economic meltdown. I mean a government struggling unsuccessfully to
contain public debt and expenditure. And I mean an economy with few private
jobs that can absorb the number of workers that need to be kicked from the
public payroll.
Croatia is unusually blessed by its cultural heritage,
landscape and climate. Scenic drives along the Adriatic are as beautiful as
those along the Amalfi Coast in Italy, the Pacific Coast in California or the Gold
Coast in Australia. The vistas in the Istrian interior rival those in Tuscany. Croatian
islands regularly appear on global lists of must-see destinations. And Gorska Hrvatska,
while not quite as spectacular as the Alps or the Rockies – is beautiful
nonetheless.
Croatia’s cultural heritage spans an unusual range of
civilizations, from early man to the empires of antiquity and through some of
the most brutal conflicts of the 20th Century. Domestic products,
from wine and olive oil to Kraš
chocolates, could hold their own in any market.
But Croatia must turn its back on tourism.
First of all, Croatia doesn’t treat this mistress too well.
It takes her for granted, assuming she’ll always be there waiting with her
heaving bosom and glistening lips.
Sometimes it seems Croatia does everything possible to put obstacles
in front of the tourists who would love to come here and spend their money.
Croatia has had almost two decades of peace to figure out how to cater to the
tourists who directly and indirectly feed more than a quarter of the country’s
GDP. And still, it seems clueless. It’s the Mediterranean as it once was before
consumer focus groups.
Among the quirks that baffle tourists are restaurants and
other businesses that don’t accept credit cards or charge an additional fee
disguised as a “cash discount,” ferries that don’t accept reservations and lack
basic customer service standards, a shortage of English-language newspapers
(new this year, by the way), few food options that go beyond the troika of
grilled meat, grilled fish and pizza and a travel industry focused on private cars
that pollute the environment and create massive traffic jams. And, outside the
view of most tourists, I’d add an overall environment hostile to tourist
investment by foreigners.
Many of these shortcomings are relatively easily remedied
with thoughtful policy that goes beyond clever marketing. Croatia doesn’t need
more tourists; it needs tourists who spend more. Croatia may attract five times
more tourists a year than Slovenia, but each tourist in Slovenia spends about
50 percent more than those in Croatia. If Croatia wants to replace cars full of
tourists who bring everything with them but a sink with more tourists who bring
nothing with them but a credit card, it has to rethink the offering.
But this love affair with tourism not only leaves visitors
wanting, it also leaves Croatia sick and pallid.
In 1996, I wrote an article for Dow Jones under the
headline, “Croatian
Recovery Leans Heavily on Tourism Revival,” and I could probably do the
same again today. Tourism has made Croatia economically lazy. Much as in the oil-rich
Middle East and other resource-rich economies, the low-hanging fruit of tourism
has made Croatia less aggressive on international markets and overly reliant of
revenues from a single source to support a bloated bureaucracy as completing
factions fight for control of the inflows.
Between 2005 and 2010, Croatia’s exports grew more slowly
than those from any other Central or Eastern European country. Part of the
problem is that services comprise nearly half of Croatia’s exports, compared
with less than 20 percent for the region as a whole. In Croatia, tourism alone
accounts for more than 40 percent of total exports. Economic growth in other emerging markets has
invariably been supported by manufacturing exports. India is known as the
world’s back office because of its large outsourcing and offshoring industry,
but even there services only account for about a third of total exports.
Indeed, benefits abound from a development and growth model
based on services. Modern service industries tend to be less polluting and
create more value for each hour worked or dollar invested. China, heralded for
its rapid growth in recent decades, is working to shift its economy away from
manufacturing into more services. But I don’t know of any country that has succeeded
without a solid manufacturing export base. In recent years several countries
have prospered as services growth has outpaced manufacturing growth, but success
stories have been built generally around IT services and transportation, not
tourism.
Relying on tourism is also problematic because so many factors
are beyond the control of the Croatian government or businesses. Unlike mineral
resources such as oil or diamonds, there are no “known reserves” of tourists lying
under Croatia that can be tapped regularly each year. Croatia is competing with
scores of other destinations for the same pool of international travelers.
While it can improve the offering and tweak the marketing, the country can do
little to impact global travel trends, economic conditions, weather conditions
and other reasons behind tourist decisions on when and where to travel. And,
alone, any growth in tourist arrivals or spending is unlikely to produce the
economic momentum the country needs.
Tourists, of course, will always have a special place in
Croatia’s economic heart, and the country should make reasonable efforts to appease
their fickle nature. But rather than waiting breathlessly each summer for this mistress
to arrive – counting on her to support of the economy and public budget for one
more year and grieving like a jilted lover when she doesn’t meet expectations –
Croatia should play the field a little more. Invite tourists, woo them and give
them what they like, but also cheat on them a bit with manufacturing and other
service industries.
[Follow Roger Malone on twitter at
@ExpatinZagreb or at http://expatinzagreb.blogspot.com/]
I just love your angle on this. t's so very true in so many ways, and I had no idea about the stats on how many tourists come here - BUT I have seen that the camp near me is packed with people and they unload boxes and boxes of stuff with them. I do hope Croatia can pick up her socks, so to speak.
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