Croatia’s 2025 summer tourism season has delivered a sobering message to policymakers and industry leaders. Despite efforts to expand year-round travel, the country suffered a notable drop in visitors and revenue during its peak months, signalling an urgent need to address rising costs and shifting traveller expectations.
At the annual Hoteliers’ Congress held on December 3 and 4, Tourism Minister Tonči Glavina and Croatian Tourist Board director Kristjan Staničić voiced deep concern. With prices now among the highest in the Mediterranean—second only to France—the country’s value-for-money perception has deteriorated.
In July and August alone, Croatia recorded 745,000 fewer overnight stays compared with the same period in 2024. The shortfall translated into an estimated €140 million (around 273 million BGN) in lost revenue, a significant blow during what should have been the most profitable months of the year.
Minister Glavina warned that without swift pricing adjustments or improvements in service quality, the decline could continue into 2026. Since 2020, tourism prices have risen by about 50 percent, far outpacing increases in neighbouring markets.
Last summer’s empty hotel rooms, coupled with headlines about high prices for basic items and even exaggerated reports of shark sightings, underscored growing visitor dissatisfaction.
Inside the sector, the situation is complex. Hotels and campsites reported modest turnover growth—2.4 percent and 2.2 percent respectively—and occupancy rates remained high. Yet profitability is weakening. Labour costs have surged more than 50 percent over five years, and food prices rose 4.9 percent in the first nine months of 2025, compared with a 2.8 percent EU average.
EBITDA margins in hotels have also dropped, from 28.2 percent in 2024 to an expected 26.6 percent in 2025. This comes even as accommodation revenue increased 8.2 percent in the first ten months of the year.
According to Veljko Ostojić, president of the Croatian Hotel Employers’ Association, price hikes are driven by necessity rather than profiteering, reflecting efforts to preserve jobs and quality amid rising operational pressures.
A deeper structural issue looms over the industry: Croatia’s overwhelming reliance on private short-term rentals. Of nearly two million tourist beds nationwide, about 1.5 million are in privately owned apartments. Industry experts argue this imbalance complicates quality control, tax enforcement, and long-term employment stability.
Hotels and camps, however, continue to invest in improved infrastructure and extended operating seasons. Ostojić noted that major hotel investments typically pay for themselves within eight years and return the value of the initial investment to the state within twelve years, suggesting that increased government incentives could accelerate much-needed development.
Despite the decline in peak-season stays, broader annual indicators show mixed results. Total arrivals rose 2 percent and overnight stays 1 percent compared with 2024, and overall revenue is expected to grow.
Germany remains Croatia’s most important source market, followed by strong domestic tourism, which exceeded 11 million overnight stays. Slovenia, Austria, and Poland also contributed to stable demand, while Istria remained the leading region with more than 25 million overnight stays.
Tourism expert Damir Krešić of the Institute for Tourism in Zagreb stressed that while hotels and package holidays remain competitive, ancillary services—restaurants, cafés, and taxis—have pushed prices to unsustainable levels. “Tourism is the sum of the guest’s entire experience,” Krešić said. “If any part of the offer is overpriced, the whole destination suffers.”
Looking to 2026, both the government and the Tourist Board intend to respond decisively. Croatia’s promotional budget will rise by about 40 percent to €53 million (roughly 103 million BGN), focusing on boosting pre- and post-season demand and encouraging sustainable, year-round tourism.
The message from officials and industry leaders is clear: Croatia must urgently restore its value-for-money appeal or risk losing its competitive edge in the Mediterranean. As Krešić cautioned, “If a guest feels they received nothing in return for their money, it is wasted, but unforgettable experiences make even higher prices acceptable.”