“Among the most significant reasons used by government and private sector businesses for developing tourism is the associated economic gain. … While the economic advantages of tourism are certainly clear, many negative aspects are apparent” (Page & Connell, 2009, p.385)

Paulius BagdanskasU1271535Travel and Tourism management

University of HuddersfieldModule: BHT 4013 Sustainable TourismModule leader: Dr Nick HubbardDue date of work: 06/12/15Word count: 2500

Tourism, in general is an important part of the country’s economic development.

Governments has always been interested in tourism, especially for growing countries, in order to

achieve economic benefit from development of tourism. (Banozic et al., 2015). Croatian tourism

is a part of Europe and worldwide unsustainable and sustainable tourism. Sustainable tourism is

industry which brings efforts together to maintain low effect on environmental, local and natural

culture and to present positive benefits, such as, preservation of natural and cultural resources

and creating employment for the country. Activities involved in sustainable tourism should have

a low impact on local community and natural environment. Differently from sustainable tourism,

unsustainable tourism is where industries fail to protect natural and cultural environment,

governments do not invest and participate, negative impacts on local communities occur,

damaging historical heritage and that there is a bigger negative impact than a positive. Shortage

of international trade, communication and new opportunities, noise, water and air pollution and

country which fails to achieve profit are important factors as well (Karamarko, 2012). For

countries worldwide rise in tourist flows can be seen as an economic advantage when it comes to

foreign exchange earnings, income, regional development, local communities, revenue, and

employment opportunities. It helps to grow demand in terms of service and goods and can

promote development for the country instead of import (Akar, 2012).

Tourism in Croatia is one of the most important sectors which highly adds its value to

country’s economy. Travel & Tourism total contribution of GDP is divided into induced, direct

and indirect contributions. The direct contribution of Travel & Tourism GDP in Croatia was

around €4.5 million, 12.5% of total GDP in 2014 and in 2015 is predicted to increase by 4.5%

(WTTC, 2015). Direct contribution involves economic activity which is linked with visitors,

such as, airlines, travel agents, hotels and other types of tourist transportation services. Also, the

activities of retail trade, restaurants and leisure industries involving recreational, sports and

cultural services, for example, recreational, cultural and sports services directly supported by

visitors. Total internal Travel and Tourism expenditure by non-locals and locals for leisure and

business purposes and as well government costs on services outside the market that are linked

with tourists (Pavlic et al., 2015). As well, tourism is industry where large amount of labour is

involved and it is a very intensive industry where workers productivity is very high. Travel and

Tourism created approximately 139,500 jobs in Croatia in 2014, which is 13.6% of total

employment and increase in Travel and Tourism jobs in 2015 is foreseen to go up by 4%

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(WTTC, 2015). The total Travel and Tourism contribution covers broader impacts on Croatian

economy, such as, induced and indirect impacts. Travel and Tourism indirect contribution to jobs

and GDP involves general government expenditure to contribution of overall tourism activity. As

well, the capital investment expenditure when all sectors are linked to Travel and Tourism

industry (Pavlic et al., 2015). Lastly, Induced Travel and Tourism contribution is wider to

employment and GDP because of expenditure by people who work indirectly or directly in

Travel and Tourism industry. According to WTTC report (2015) in Croatia total contribution

consisted of around €10.4 million, 28.3% of GDP in 2014 and in 2015 is predicted to increase by

2.2% and around 310,500 jobs were created in 2014, which is 30.2% of total employment and is

foreseen to go up by 2.7% in 2015. All this economic contribution clearly indicates that tourism

is substantial for development of the destination and it is seen as an invisible export and it is

responsible for the significant share of Croatian foreign exchange earnings. According to

Croatian National Bank (2015) Balance of payments, foreign exchange in 2013 was

approximately €6.25 million and €6.38 million in 2014.

Two decades ago, 1990s for Croatia were very important because Croatia was in a war of

independence during 1991-1995 in a battle with Serbians where Croatia wanted to separate from

Yugoslavia. Croatia established stabilisation program in 1993 to prevent hyperinflation and to

help to end the disastrous economic crisis and Croatia chose open economy with a controlled

float exchange rate management (Sipic & Zavisic, 2015). Croatian National Bank regularly

interferes concerning foreign exchange market to make sure that the exchange rate Croatian

Kuna against the Euro is stabilised in both ways. Croatian Kuna at the beginning and at the end

of the year tends to lose its value. The value of Kuna goes up during the summer period because

of tourist expenditure in the country and of an increased demand for Kuna in the tourist season

(Croatian National Bank, 2015). Every year Croatian National Bank aims to even the exchange

rate by buying or selling national currency from domestic commercial banks during the high

summer period. Also, making sure that Croatian exchange rate is solid and it does not change

that much because Croatian economy is experiencing high level of “euroisation” (Pavlic et al.,

2015). Overvalued Croatian Kuna in the export market has low competition for its export

products in foreign markets. External competition of the tourism in Croatia could be controlled

over applying real effective exchange rate.

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One of the main negative economic impacts of Croatia is seasonality. According to Corluka

et al. (2013), diversification of tourism supply within selective forms of tourism can lead to a

solution of how to soften seasonality. An option to extend summer season and achieve

sustainable development is possible if the selective forms of market resources are understood at

the destination and with persistent allocation of tourism demand through the year. During season

months in Croatia when tourist demand is high and outside season is low, most of

accommodation facilities are inefficient and half empty. Tourism facilities, local community and

government need to get enough revenue through the busy months in summer to make sure the

rest of the year is prosperous (Banozic et al., 2015). Mainly, the negative economic impact of

seasonality is dependent on low season, generally tourism in Croatia has loss of profit due to the

factor that country’s facilities and resources are not being used effectively at that time of the year

(Jang, 2004). Tourism resources are at danger when are not being fully used, on top of that,

country is receiving low annual return on capital because of revenue fluctuation. Concerning

sustainable tourism development very high tourist demand during peak season has a negative

impact, as well, on socio-cultural and ecological side of the tourism destination. High volume of

tourists during the busy season can be linked to ecological impacts of the destination (Lewis &

Bischoff, 2005). Large tourist condensation in one place and excessive use during the season in

summer is the primary environmental issue of seasonality. Environmental pollution is the cause

of high volume of tourism activities undertaken, such as, camping, canoeing, hiking and littering

in national parks, beaches, reservoirs (Corluka et al., 2013).

Socio-cultural impacts have big consequences for the local community due to seasonal

fluctuations. Local people are affected by traffic jams, slow traffic, overcrowded streets, no

space for parking for tourists and other people, especially, Croatia has a big problem towards

space for cars. Also, enormous rise in costs of community services and more trouble for the

government for funding the community regarding rise in tourist numbers on high peak season

which puts pressure to normal operating services and infrastructure (Lewis & Bischoff, 2005).

Often countries experience safety issues due to increase in tourist numbers during the busy

summer season, chance of crime rate is higher than usual because the more people come to visit

a particular place or whether exploring famous city where tourist flows are massive the higher

chance of crime is possible. A destination increases prices of tourism services during high tourist

demand in summer and during low tourist demand off-season reduces it. It is hard to achieve

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satisfaction and good level of quality because of limited accommodation availability and tourist

transport services (Jang, 2004). There is also a negative side during low season tourist demand,

for example, facilities are suffering shortages of tourists and are experiencing financial problems

and because of that facilities have to cut on numbers of facilities and close them and for people

who want to see the destination during the low season a problem of satisfaction occurs. To lead

destination to sustainable development extension of summer season and distribution of tourist

demand from non-peak season to peak season need to be implemented carefully (Corluka et al.,

2013). The term “sea-sun-sand” is very popular in between seasonal destinations and most of

them have sustainability issues, including cultural, environmental and social impacts. Solution to

minimize these impacts is diversification of selective forms of tourism and to aim to attract extra

tourists during the low season, to create more attractions, promote various types of tourism

services which are not connected with “sea-sun-sand” (Lee et al., 2008). For example, In Croatia

in low season country offers fabulous views of Plitvice national park full of icicles, frozen

waterfalls, and almost everything covered in the snow and low tourist concentration around the

national park. Also, Croatia has highlands where tourists use skiing and snowboarding resorts.

Though, Croatia does not get enough income and high tourist flows from that and does not have

that much to offer during off peak season country must find what to offer and how to maintain

sustainability at the destination during all year (Capka, 2011).

Cultural tourism is one of the vital factors of sustainable development at the destination

(Demonja, 2013). Cultural tourism is not all about popular and overcrowded places, it is as about

making it attractive and authentic involving local people along with tourists who are interested

about culture, heritage and preservation of it. Cultural tourism products help destination to

increase consumption, fulfill visitor expectations, leave a good impression of it and extend the

length of stay. For tourism advantage of cultural tourism is seen as a perspective for long-term

sustainability and one of the most crucial economic sectors in Croatia (Karamarko, 2012).

Croatia for visitors offer indigenous special surroundings along charming Mediterranean

coastline connecting seaside cities and exceptional culture-orientated cities. Also, moving from

coastline to the continent along with small mountains and national parks on the way with the

local rural areas and big urban cities. UNESCO has a big involvement in Croatia concerning

preservation and towards sustainable development of the country (Demonja, 2013). Diversity of

cultural and natural heritage in Croatia is under UNESCO protection, for example, Euphrasian

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Basilica in small town Porec, Split and Dubrovnik because of unique old architecture and castles

surrounding the city centres and the most important Plivice lakes which is one of the most

natural wonders of the world (Demonja, 2013). Croatia surprisingly has 181 museums for such

small sized country and in terms of world and domestic heritage visitor numbers reach

approximately 2 million tourists per year (Statistical Yearbook of the Republic of Croatia, 2014).

In 2013 Croatian government prepared plan for the development of the country’s tourism to

2020 and the aim is to create the system for innovative and novel tourism offer which should

improve capital investment markets and Croatian tourism competitiveness (Demonja, 2013).

Large part of the plan is linked to cultural tourism, which is important factor for Croatian

tourism. Cultural offer in Croatia is not effectively established even though it is divergent and

rich and actions should be taken towards improving quality of tourist offer. To attain perspective

sustainability of tourism development preservation of various sites and cultural benefit has to be

the key to it (Kunst, 2011). The plan for the development of the country’s tourism along with

development of cultural resources and its protection begins with Croatian Ministry of Tourism

and Ministry of Culture who are responsible for the development of tourism. Ministries plans are

to generate allocated funds for cultural tourism oriented plans which would involve not only

local government, as well, travel agencies, local community and various cultural organisations

(The government of the republic of Croatia, 2013). The main aim of the plan is that conservation

of picturesque Croatian variety of cultural and natural heritage and fundamentals of sustainable

development should substantiate tourist development at local and national level. Reviewing the

plan issued by the government the strategy intelligibly indicates the significance of cultural

tourism for the development of tourism in the future in Croatia. Croatia has a lot of potential for

the heritage and culture however the main problem is that planning, aims and opportunities

outcome for the development is little concerning the local and regional level. Local community

or local government must consider giving bigger contribution to Croatian cultural tourism’s

further development in view of the fact that local government has the biggest involvement of

development of cultural tourism (Mesic, 2008). Local communities have to be assigned to

participate in international organisations which solve problems concerning utilisation of social

and natural resources. Croatia has guaranteed advantage over the competitors who try to interfere

to Croatian tourism because of various factors including Croatian tourism policy which

highlights environmental awareness. This tourism policy preserves the most precious resources

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of the country including pristine coastline, scenic and preserved natural environment and the

authenticity of Croatian rural villages (Turkalj et al., 2013).

It is compulsory for Croatia to adapt regionalisation to look after not fully developed regions

and to balance the country and obtain a rapid growth. Regionalisation is used as a division of the

country’s land into a smaller regional segments in order to achieve efficient planning and to

create a competent administrative organisation which would meet Croatian regional development

policy (Turkalj et al., 2013). In Croatia there are specific laws by which regional development

policy can be essential for conduction and regulation of its policy. Unfortunately, Croatian

present legal structure is not legally established for conducting regional development on all

regional segments of the country. According to the National Competitiveness Council (2008)

objectives of favourable outcome for the regional policy consists of long-term and constant

sustainable development of regional, local communities including Croatian residents and the

most important point is that all types of economic activity have to be persistent for long-term in a

specific region. It improves and creates new opportunities for protection and conservation,

employment, development of rural and urban regions and validation.

To sum up, though tourism in Croatia is improving and country is benefiting from foreign

exchange earnings, creating jobs for local people involving urban and rural parts of Croatia,

UNESCO and local government involvement for preservation of natural and cultural heritage

and environment is visible country still has its negative side of the tourism. The main problem is

seasonality which can only be reduced but not eliminated completely. The issue of seasonality in

Croatia is that tourism facilities are not being fully used during off-peak season when tourist

flows are low, impact on the whole country is followed as well during peak season when tourist

flows are large and places are overcrowded, risk of environmental and socio-cultural problems is

visible and that regional development should be maintained all year round.

References

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