Emerging From War

Croatia battles to rebuild its tourism industry

By: R. Scott Macintosh

The images of Dubrovnik’s brutal shelling have lingered like a shadow over Croatia for more than a decade.

The three-month Serbian assault shocked the world. Gothic-Renaissance churches, red honeycomb-tile rooftops and centuries-old limestone architecture were reduced to rubble by a rain of mortar fire.

“When I think of it, I can’t believe what was going on,” said Branka Franicevic, a licensed tour guide in Dubrovnik. “It was like a dream; a nightmare for sure. Now I know that I can survive almost anything.”

Today, news footage of the shelling is played inside the tourism information office of the old walled town, a vivid representation of how much the city has been transformed.

The war ended in 1995, and since then the battle to rebuild Croatia and its tourism industry has illustrated the challenges countries face when recovering from war.

“Croatia spent all of its economic resources when it went to war,” said David Beirman, director of the Israel Tourism Office in Sydney, Australia, and author of a book on restoring tourism. “So there were few resources for tourism marketing. As a result, they had a difficult time getting the message out to the traveling public that the war was over.”

A country known for its pristine coastline, scattered islands, turquoise-blue water, bucolic hinterland and historic cities like Dubrovnik, Croatia was once a major playground for European tourists and included for about 80 percent of the tourist attractions in the former Yugoslavia.

But after the collapse of communism and the region’s disintegration into a decade of war, tourism became virtually nonexistent.

“Before the war, Croatia was known as a tourist destination,” said Pave Zupan-Ruskovic, the minister of tourism for the Republic of Croatia. “Not anymore. We are working to change that.”

Slowly, Croatia has made its way out of the dark past and now has ambitious plans to target international tourism.

With tourism driving 22 percent of the nation’s gross domestic product and projections indicating that it will become even more significant, Croatia believes the industry will be a major force in its economic recovery.

Today, an international marketing campaign highlights the country’s unspoiled Adriatic landscape with the slogan “The Mediterranean as it Once Was.” About a quarter of Croatia’s entire $4 million national marketing budget will be spent on television advertising worldwide this year.

But as it sells itself to the world, Croatia’s tourism industry still is challenged with repairing the infrastructure damaged by the war and convincing travelers that the country is safe.

So far, most of the country’s reconstruction efforts have been focused on Dubrovnik, which has long been the country’s cultural treasure and biggest moneymaker.

Nearly $2.5 billion has been spent on the city, with emphasis on meeting the standards of UNESCO, which has designated the city as a World Heritage Site.

Damaged rooftops have been replaced with a patchwork of striking new tiles. Damaged parts of the paving in Dubrovnik’s main square have been replaced with white flagstones extracted from the same nearby quarries as the 500 year-old originals.

“In Croatia, the recovery of tourism has taken place along side reconstruction,” Beirman said. “In a sense, they have made recovery newsworthy, which has served as a way to promote the country.”

Still, some hotels and coastal resorts in prime locations remain empty, and the country’s total capacity is 6 percent less than during the communist era.

South of Dubrovnik, in coves along the winding Dalmatian coast, vacant resorts and hotels illustrate Croatia’s challenge of drawing private investors to its largely state-owned tourism industry.

The government still owns about 63 percent of the country’s tourism assets and has more than 25 percent ownership in 42 travel-related companies. The Ministry of Tourism has been charged with the task of revitalizing the hotel industry through private investment.

So far, Croatia has offered tax concessions to investors and has privatized 65 hotels, with investment in properties hitting $220 million last year.

The ministry has listed hotels for sale on its Web site (www.mint.hr/invest ment_opportunities.htm) and also has undertaken an effort to turn former military bases into tourist resorts with a project near the Montenegro border nearly complete.

The ministry also is offering financial incentives to small tourism enterprises that renovate private homes as tourist lodgings.

Private accommodation now is the fastest-growing lodging segment in Croatia and has helped boost overall capacity.

In 2001, private accommodations accounted for 42 percent of the lodging capacity in the country, up 11 percent from 1991 levels.

“In our strategy, we plan to renovate existing hotels and make them nicer,” Zupan-Ruskovic said.

“Many were built in the Soviet era and are very similar to each other. We want to invest in boutique hotels. We are going to take existing buildings and make them into nice, small hotels and build new ones which are smaller.”

After the years of reconstruction and effort, visitors are starting to respond. Historically, tourists have been lured to Croatia for its value, its unspoiled landscape and warm climate. That appeal remains.

“It has a little bit of everything of the best parts of Europe,” said Matthew Klein of Continental Journeys, a Sherman Oaks, Calif., tour operator that has led trips to Croatia for the last year and a half.

Europeans have led a gradual comeback, with Germans accounting for the largest number of visits.

Last year, Croatia came close to meeting pre-war levels for tourism arrivals. It drew 8.3 million visitors compared with 8.5 million who came in 1990, its most successful year to date.

But Croatia has had a more difficult time getting the attention of Americans. Last year, U.S. visits were less than half of what they were before the war.

Still, numbers are improving and this year U.S. arrivals are up about 6 percent over 2002 levels.

“Honestly, we can’t realize everything in just three to four years,” said Zupan-Ruskovic. “We will try to find foreign investment. But there is not a lot of money here. The war has spent everything.”

The ministry is now trying to extend the tourism season beyond the traditional summertime months, offering subsidies and incentives to tour operators and travel agencies who do substantial business in the country.

But Croatia still must battle for tourists with neighboring countries like Italy and Greece. And it still often remains a secondary choice of travelers considering a visit to the Adriatic.

What Croatia lacks, according to the author Beirman, is a single notable attraction that helps people identify a destination.

“The one problem Croatia has is that it is not a country that has a compelling image,” he said.

“New York has the Empire State Building. South Africa has its wildlife. Generally speaking, having a compelling attraction is what drives tourism. I guess what Croatia has been doing is trying to find their image.”