March the 21st, 2022 – Have Croatian tourism companies finally begun to engage in a little self-reflection and started learning from their past mistakes following the last two unprecedented years dominated by a global pandemic and now a war in Europe? It seems so, and just in time for Easter.
As Novac/Jutarnji/Barbara Ban writes, the currently great uncertainty all over Europe over the war raging in Ukraine has slowed bookings down, but that doesn’t mean the summer season this year will be bad. Moreover, the latest global analyses presented this week at the Berlin Tourism Fair ITB show that the demand for holidays and travel is higher than last year and of course higher than it was back during 2020, and that tourist traffic across Europe this year will be at 90 percent of what was recorded back in pre-pandemic 2019.
The Germans, the British, the Americans and the Dutch will more than likely travel the most. Croatian tourism companies and some of the largest hoteliers in the country are sticking to this idea, noting that due to the situation currently playing out in Eastern Europe following the Russian invasion of Ukraine, booking has been slowed down, but there have been no cancellations. They have already started hiring staff earlier so that they don’t have the same dire situation with the workforce as they did last year, and now there are struggles for every worker. They raised salaries by 15 percent, and for some deficient occupations, by up to 50 percent.
No cancellations
Marina Cvitic from the Trade Union of Istria, Kvarner and Dalmatia, says that they are preparing for the upcoming tourist season as if it would be a normal one, especially in the more northern part of the Adriatic, since it is a destination many people drive to.
”Regarding the war in Ukraine, for now, no one is too worried when it comes to booking. It’s true when they say that booking has slowed down for now, however, there are no cancellations and that’s good. It’s obvious that last minute bookings will be even more pronounced this year. That’s why employment started going very well in March because everyone is preparing for Easter, which is just around the corner now.
Employers in Croatian tourism companies don’t want the same situation that happened last year to happen again, when chaos ensued due to high levels of caution when hiring in the peak season. Just by looking at the media and the Croatian tourism companies in the network, it’s clear that there are issues being experienced by companies in the labour market. Every fifteen days or so, companies advertise and repeat the conditions under which workers will be employed. From this it can be concluded that they haven’t yet secured a sufficient number of employees for the peak tourist season. Although the agreed wage increases for this year are more significant than in the years before the pandemic when the maximum increase was 2 – 4 percent, and during the pandemic wages stagnated, due to the impact of inflation reaching a record 6.3 percent, wages will not significantly affect the standard of the workers. Despite the fact that in most companies, the price of labour has been agreed upon and despite the fact that costs are rising for companies too, I’m afraid that employers will have to tighten their belts further during the season if they want to work it all and settle for less profit than what they’re used to,” Cvitic pointed out.
Old mistakes
She added employers in Croatian tourism companies and the overall hospitality industry could pay a high price for repeating tired old mistakes. She explained that, except for the last two pandemic-dominated years, all Croatian tourism companies have achieved very good results, had a profits reaching the millions and that the owners “pulled out” that money through dividends and that investments were made in raising the quality of facilities and new acquisitions.
”There was money for everything, but not for the workers. Not to mention that there was no higher employment for an indefinite period of time at all. On the contrary, the number of full-time employees only decreased as older workers retired by natural outflow. Not to mention that incentive severance pay has stimulated older but still able-bodied workers to leave companies. In such conditions, our experienced tourism workers, and even full-time workers, who are highly valued, left Croatia and unfortunately, although we warned of it, nobody was worried about that,” Cvitic added.
She explained that now the situation is completely different and that after two years of the pandemic, Croatian tourism companies have drastically lower profits, the results are much weaker than they were before the pandemic, and salary increases and other material rights being offered to employees as a lure are much higher.
”So, now that there isn’t much money, much more is being allocated for workers than was allocated when there was room to do so. On the other hand, employees are now aware of their roles and often set conditions they never thought of before, such as their desire for two days off a week, one-shift work, and, of course, unions now see the opportunity and are trying to direct wage policy, as well,” Cvitic stated.
Salary increases
She noted that this year’s salary increase is up to 15 percent, and for some deficient occupations, that increase rises up to as much as 50 percent, and that the maximum non-taxable amounts are planned for the amount of 5,000 kuna. There is also free food, a tax-free Christmas bonus of 3,000 kuna and a gift of 600 kuna.
If employers had treated their workers like that ten years ago, if they’d hired workers for an indefinite period of time as they do now, if they’d hired permanent seasonal workers as they do now, if they’d rewarded seasonal workers even after the season was over as they are doing now, we wouldn’t be experiencing any of the issues we now are. With all the increases in wages and income, they would have a Croatian workforce that is of better quality, but also cheaper, and there would be no need to try to import foreign workers,” Cvitic believes.
She believes that the situation we experienced during the last summer season will not be repeated, when due to the lack of workers, some Croatian tourism companies, hotels and restaurants didn’t even bother to open their doors.
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