Table of Contents
Comparison with European Countries
In the ranking of the contribution of travel and tourism to GDP, the first place are the Maldives with 79,4% and the countries in the first ten places mostly consist of tropical islands and countries. Croatia is ranked as 21st with the contribution of 24,7% behind Malta, which has 26,7%. Other European countries such as Greece with 18,6%, Portugal with 16,6%, Spain 14,2%, Bulgaria’s contribution is 12,8% and Italy on 64th place as their contribution is 11,1%.
However, if we take Travel and Tourism in billions of US dollars, the ranking is different, which might seem confusing, but after computing out of GDP of the year we get the same result. According to World Travel and Tourism Council, Croatia is ranked 57th with 12,5 billion as the total contribution of travel and tourism to GDP. In comparison with Italy, which is on 8th place with 207,6 billion, which may be the result of having not only summer seasons in the south but as well winter seasons in the north, which is possibly the main reason why Italy is on this high position.
Greece is placed on 29th with 36,6 billion, the reason behind this is in the area difference as Greece is two times bigger than Croatia and it has more islands with more coasts and seaside, which attracts significantly more tourists than Croatia. According to The Statistic Portal the number of arrivals in Greece in tourist accommodation was around 23,7 million in the year 2016, whereas in Croatia it was lower around 15,4 million. (8) (7)
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The Czech Republic with 15,0 billion is placed on 54th with part of tourism in GDP is around 7,8%. In the contribution in billions, Czech Republic has slightly more than Croatia – around 18,4 million, which can be caused by the number of historical sights in Czech Republic and dependence on seasonality when visiting Croatia. (8) (7)
Impacts of Tourism
First and foremost, it comes with a huge impact on employment. If we consider all types of the contribution of travel and tourism (T&T) to GDP, during the year 2016 – 321 500 jobs, which is covers 23,4% of total employment of Croatia and it means every fourth job is related with tourism. Forecast for the future is to rise to 371 000 jobs, which would be around 27% of total employment by the year 2027. This all comes with the growth of service sector, which can be beneficial for Croatia. (15)
Another impact is on the increase of Foreign Direct Investment (FDI). Business travels come with technology, capital, skills, know-how and all of this results from FDI and it helps the economy grow, it comes with new opportunities for local businesses, new product creation and so on.
Considerable is improvement of infrastructure and services, because it encourages investment, as the government attempts to increase the marketing and promotion with the development of bars, restaurants, transportation (such as airports, harbours, etc.) improvement of public areas, ensuring the flow of goods. It benefits not only local people’s well-being but visitors and the economy as well.
These benefits are very important to the economy of Croatia; however, tourism has disadvantages and negative impacts as well. As the it increases the need for infrastructure and services, it is usually paid by the government, which is paid from tax revenues. Another negative contribution is employment, it increases, but most often the jobs are seasonal and not well paid.
It can significantly increase the prices of services, goods and property in the area, local people do not benefit from those. It is common that the money earned from tourism does not improve the well-being of local people or community because it goes to international companies as hotel or restaurant chains. Last but not least, destinations are reliant on events in the area, which influences the number of visitors, such as terrorist attacks or natural disasters.
Economy Branches – Beneficial and Attractive for Investment
Agriculture in Croatia is well known for its fishery of blue water fish (tuna, mackerel, anchovies, etc.) which do not live in the Adriatic Sea but cross it from the Mediterranean Sea. To another famous branch belong wine yards, olive-tree, fig trees, citrus trees and so on. Croatia is known for the production of olive oil, which goes up to more than 50,000 hectolitres every year. (16)
Textile and clothing industry is worth mentioning, even though there are many challenges in this market, it still employs a considerable part of the population (around 20 thousand). Calzedonia or Benetton, these international brands are using Croatian’s market potential.
Pharmaceutical industry with its tradition employs almost 5,000 people and is significantly growing. Croatia belongs to one of 10 countries, which developed a new drug – innovative antibiotic azithromycin. To important companies in this country belong GlaxoSmithKline, Hospira or Galapagos Research Center. (17)
Other industries worth mentioning are machinery, food industry, automotive, ICT, etc. (17)
Conclusion
Countries, which are reliant on tourism are considered as poor and having a small economy. That is why Croatia is not on the list with countries, which have this industry as the largest.
Tourism is for Croatia very important as it is the main driver of its economy and even though it is affected by many conditions around us that people cannot influence. Weather, the increase or decrease in incomes, prices all of this and many others have the impact on, where people would go on holiday to.
I personally, chose this topic, because of my passion for travelling and curiosity about the impact of tourism on the GDP.
As I live in Prague, I see how much the tourism changes the parts of the city. I noticed huge differences in prices e.g. Coca Cola costs three times its normal price in certain areas. Not only prices of food and beverages raised, there has been an enormous increase in prices of property, as people buy flats to rent them on Airbnb for high prices, which are not affordable for locals. That is why the Old Town in Prague has fewer citizens and more places for renting.
Overall prices in Old Town are significantly higher than in other parts of the city, which affected local people as their expenditures rapidly increased. As another huge problem is considered the night peace, which is disturbed daily by many tourists. These issues are not considered as benefits for local people. For comparison, I wanted to find out how different it is in coastal countries. Before my further readings for this essay, I had little idea about how big impact does tourism have for these nations.
From my point of view, I think that southern countries with their temperament, approach and attitude are different from Central Europe. As to their culture belongs sitting for a long time at Cafés, which does not necessarily improve or help their economy. I personally think that Croatia should diversify their market, attempt not to be as dependent on tourism as it is now. Focusing on agriculture, grow more fruits.
What is getting a lot of attention these days are different types of cosmetics, starting a production of cosmetics with olive oil or citrus fruits, which are considered around women as natural and very healthy and is well-known, might help lowering the reliance tourism. Another suggestion would be to strengthen their extraction of natural resources as this country has hydrocarbon reserves, which are significant.
New areas of this promising extractions are Pannonian Basin, Dinarides, central and southern Adriatic. Croatia has twelve windmills as the source of wind energy, which are worth around 315 million Euros. Thanks to its location it would benefit from not only wind energy, but solar energy as well, which would offer around 30,000 new jobs and decrease the unemployment rate. (18)
Croatia could try to attract investments of capital, not only in tourism such as hotels and restaurants but in other promising branches as well, e.g. to build a warehouse in this country. In last few years Amazon was getting a lot of attention, there could be a possibility to build a central warehouse in Croatia which comes with a very promising location in Balkan.
This nation has been very popular among Czech tourists and almost every Czech family has been to Croatia for holidays. I hope that it will still remain in the top visited countries and that their government will try to diversify their market and attempt to improve the well-being of local people.
