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Privatized tourism industry will become engine of growth for Croatia

Of the1850 companies slated for privatization in Croatia approximately one hundred have been deemed of strategic importance to the country. According to the Croatian Privatization Fund, the organization responsible for managing the privatization process, the tourism sector alone accounts for more than forty of these properties- mostly in the form of hotels.

"The government does not want to own any properties in tourism, although today it still owns approximately 200 hotels," says Ms. Pave Zupan-Ruskovic, Croatia’s Minister of Tourism. It is expected that all remaining shares in these hotel and tourism facilities will be sold in the next two or three years.

Ask anyone associated with tourism in this country and they will tell you that Croatia needs foreign investors. Large international hotel chains will undoubtedly be drawn to Croatia, especially as this country continues to re-attract the throngs of tourists that came here before the war.

Croatia has long been a popular destination for Europeans and it’s likely to become increasingly popular with Americans. According to Ms. Ruskovic, the average American traveler to Europe will visit a number of countries rather than confine their stay to just one. In order for these "average American travelers" to consider adding Croatia to their itinerary the nation will most likely have to offer brand name facilities, the type that only the large international chains can offer.

"We have various problems that we have not yet solved," said Minister Ruskovic referring to government efforts to create an attractive climate for foreign investment, "but our new administration is working on them." Croatia has implemented several new laws calculated to increase the number of incentives for investment. "The Ministry of Finance is working on new regulations to enable investors to make a deal in a much faster and easier way than was the case previously."

Tourism officials are examining ways to extend the tourism season. Many tourists prefer travelling to Croatia during the off-season in order that they may avoid the summer heat. One goal that tourism officials would like to achieve, in order to encourage off-season travel, is to successfully promote Croatia as a top-flight conference center- a good idea since most conferences occur during the off- season. There is also a drive to promote off-season travel in places where the summer season is brief- places like Scandinavia and Great Britain. In order to do all this Minister Ruskovic believes that Croatia must realize greater investment, not only in hotels and convention centers, but also for things like golf courses.

As it stands now, the entire country of Croatia has just two golf courses, of which only one is eighteen holes in length. Part of the reason is that securing the authorization to develop something as extensive as a golf course involves both a lot of money and numerous bureaucratic headaches.

A few promising changes have recently been made to the laws relating to the development of agricultural land. These amendments may help to expedite the growth of golf and other recreational undertakings. Oftentimes land that may have been agricultural a century ago is still classified as such even though it may have been out of production since that time.

"Investors [had to] pay approximately nine hundred thousand dollars just to change the zoning of that land," said Minister Ruskovic. "If one wanted, for example, to build a golf course he would have had to pay this amount just to get the permission to build the golf course. The last parliament made a decision to change that article, and now if someone is going to build a golf course that payment for a change in zoning doesn’t have to be paid. Otherwise not one golf course would be built in this country."

"If you fly along the coast you will see a lot of land that is not in use," says Ruskkovic. "We have located forty two locations that would be excellent for golf courses, and we are now working on ownership issues." She states that only a few of these locations are government owned. "We are on a good path towards making a deal with people who are owners of land and give them options. They can leave the land and come into a joint venture. On land that is not used- the owner will have to pay the tax. That will make it so that it’s much better for them to construct a golf course rather than to leave it as empty land."

Minister Ruskovic is quick to point out that Croatia is blessed with a fabulous coastline. "We have 1,000 islands in an unspoiled nature. We have a rich heritage of ancient monuments reflecting Roman and Venetian influences upon our centuries old culture. The good food and wine in our cosmopolitan cities and historic towns are second to none. We invite foreign and local investors to consider in their development plans the hotels, campsites, and travel companies owned and managed by the Croatian Privatization Fund."

Hrvoje Vojkovic, President of the Privatization Fund, views privatization as "the strongest engine" in the process of restructuring Croatia. "The best example is the tourism sector in Croatia, where the success of privatization of tourism companies will immediately create a completely new tourism industry."