The Fewer The Rooms The Higher The Rates

[IMG=19651-5367]

   According to experts that specialize in tours to Croatia, tour packages increased in price by around 15% mainly owing to adoption of VAT for hotels and transport companies of the country in January 2006. Thus, Boris Burikin, Director of Ascent Travel, commented on the situation: ‘the Croatian legislature has undergone alterations. Before January 2006 hotels and transport companies specialized in the foreign markets were exempt from taxes. Due to the new law, transfer cost will grow by 20%, while accommodation rates will increase by approximately 10%’.
    Meanwhile, hotels in Croatia reacted differently on the new law. Thus, some hotels, especially in Istria, leveled up prices by 3-4%, while in Dubrovnik accommodation rates increased by 40% in several hotels, said Sergey Prigolovkin, CEO of PAKS Company. ‘Adoption of VAT is not the only factor that provoked growth of prices. There is a shortage of hotels in the resort. Popular hotels are booked by European operators. Therefore, local hoteliers forced up prices for accommodation’.
    Russian travel market forecast that the shortage of hotel base and increased prices for tours will not allow the previously expected growth in demand for the destination. They point out that the tourist flow from Russia to Croatia will not increase by more than 20%. Moreover, those two operators that have worked a lot at the destination and take commitments have more chances to succeed in the current situation.