Inflation continues forcing prices up, where are hotel prices in Croatia?
July 8, 2022 – Inflation is driving up hotel prices across the Mediterranean, but what does the situation look like with Croatian hotel prices?
As Marija Crnjak/Poslovni Dnevnik writes, the combination of continued inflation and increased demand for tourist travel has led to a significant increase in prices for hotel services at rates that often exceed inflationary rates, and hotel prices Croatians represent only a small part of the world market. which recorded growth in hotel accommodation of more than 50% depending on the destination.
Thus, the largest increase in hotel accommodation prices, compared to the last normal tourist year before the pandemic 2019, occurred in Rome, Berlin and Palma de Mallorca, according to an analysis by the British magazine Hotel News Resource, one of the top 10 most influential global travel portals operating under the Nevistas Group.
The analysis was carried out based on their historical data on hotel accommodation prices in major European cities, noting that demand in the short to medium term, despite the upward trend in inflation, will continue to grow until the end of the year. With strong demand, prices will continue to rise, but it is unclear what price policy will bring next year.
Comparing average room rates from 2019 to 2022, the analysis shows that prices are currently significantly higher. Room prices in June increased by 51.4% in Rome, 50.2% in Berlin, 44.5% in Dublin, London recorded an average increase of 44.3%, Barcelona 29%, Amsterdam 12.1 % and Paris of 19.8%.
There was a similar trend in major European summer tourism destinations in June, where Palma de Mallorca (+40%) leads in terms of price increases compared to June 2019, in Ibiza prices rose by 30 percent, in Aix en Provence by 21 percent, Montpellier recorded price growth of 14 percent, and Rhodes was up by 13 percent. The latest official figure for Croatian hotel prices with a growth of 12% refers to the month of May, while for June and the high summer season in this sector, an average increase of between 30 and 50% is mentioned, also depending of the exact destination and the individual hotel.
The circumstances surrounding the increase in Croatian hotel prices are far from simple, although they may seem at first glance. External factors, the rapid opening of economies after the coronavirus crisis and the Russian invasion of Ukraine, have all put great pressure on supply chains. As a result, there has been a dramatic increase in energy and food costs for hospitality businesses as well. Croatian hoteliers within the umbrella organization the Croatian Tourism Association have calculated that the increase in the price of electricity alone will swallow up all of the sector’s profits from last year, which amounted to 1 billion kuna.
Therefore, without increasing prices and revenue per available room (RevPar), hotel profit margins would inevitably drop significantly, and for the most part, they would fall to unsustainable levels, analysts at Hotel News Resource magazine conclude. which is entirely consistent with the rhetoric. Croatian hotel operators and owners.
It is also very important to note that labor costs for hoteliers have increased significantly all over the world, especially in the United States and here in Europe. There are far more vacancies than there are qualified people able to fill them, which means hoteliers have had to offer higher salaries and other benefits. This further increases business costs – HUT recently revealed that compared to 2019, labor costs increased by another 10.1% and thus exceeded the 30% share of total company revenue. business, which has never happened in Croatian history so far.
For more information on hotel prices in Croatia, be sure to check out our business section.