Bookings are down, but revenue is up. We get more insight from a local expert.
While minding my business on the internet recently, I came across this article that claimed Croatia has set tourism records and this summer is set to break all-time highs. The article in the Dubrovnik Times said by June Croatia had received 6.7 million arrivals and over 27 million nightly stays.
Having spoken to sources in European hospitality, right off the bat I knew there was something dubious about these numbers. So I reached out to Saša Bosanac, who runs Vacation Rental Management Days and is involved in the vacation rental industry within Europe.
“This is an inside joke that Croatian tourism numbers are like the iPhone,” Bosanac said. “Every year we have the best year ever. I don’t know how we do it.”
His sarcasm is lost only on those who aren’t clued into the Croatian market.
“We have noticed as much as a 15% drop in bookings,” Bosanac added. “But at the same time prices have gone up enormously.” He added that in the past two-three years, Croatia has seen a 20 percent increase in prices.
While inflation is an easy culprit, Bosanac added that some of it is not comprehensible because the properties haven’t seen any change in terms of amenities or occupancy. He also added that statistics provided by Eurostat and other agencies don’t tell the complete story or tell a different one.
“Sure tourists are still arriving, but a lot of them are buying food at supermarkets instead of eating at restaurants. There is far more availability at accommodations this year, and tourists are paying dearly.” He added that in some parts of the country prices are comparable to destinations like Lake Como and the Amalfi Coast in Italy, which are known to be expensive vacation destinations.
So why is this happening? Bosanac has a couple of theories:
One is that when the country switched to the euro last year, a lot of businesses silently raised prices and the vacation rental industry was one of them. “A lot of them did it because their neighbor did it. No other reason or justification.”
The other reason is that Croatia simply got more popular, and now it’s working against it. Bosanac noted that in the 70s and 80s, Croatia was a destination for those looking for a quiet summer by the coast. “People drove over with their families and enjoyed family vacations by the beach. Today, there are so many construction sites all over the country and it’s becoming less appealing. Locals don’t like it, but the investors will find their way.”
“Albania is today what Croatia was 40-50 years ago.”
New This Morning
Tampa, Florida-based short-term rental management company Home Team Vacation Rentals acquired Sand Key Vacation Rentals, a 115-unit vacation management company in Port Aransas, Texas.
“As a company headquartered in the beach vacation capital of Florida, we have studied other PMs and their daily operations and business ventures and we think we can do it better with our technology stack, dynamic people, and social media prowess,” Home Team’s co-founder and President, Michael Elefante said. “We are positioned to acquire other property management companies in 2023 and build our vacation rental management portfolio thoughtfully and strategically both organically and through acquisition.”
Hot Destinations, Cool Prices
European Travel Commission data shows the number of people hoping to travel to the Mediterranean region in June to November has already fallen 10% compared to last year, when scorching weather led to droughts and wildfires.
For tour operators and guides, this could be quite a blow. Douglas Quinby from the in-destination event and research company Arival was quoted as saying in an email: “If you do fishing boat trips in Alaska this might be good news, but if you’re a tour guide in Rome it’s not clearly – either way you’re going to have to respond and think about how you both adapt your product and market your services.” He also pointed out that pricing, scheduling and even staff contracting could all be impacted as the same amount of travellers start to visit for longer seasons, thus pushing up costs.
But regardless, the idea of peak summer travel will see a shift. Alex Barros from revenue management platform BEONx added that years of ‘peak season’ prices will need rethinking for sure: “perhaps we can be linking prices instead to temperatures than date ranges” whilst pointing out that “there’s also the opportunity to upsell and cross-sell products and services that respond to the need to keep cool, such as swimming pool access passes or indoor activities”.
Dallas Renters Club
Based on an analysis that combines the current listings in Dallas and the zoning restrictions, it is projected that approximately 65% of registered short-term rentals (STRs) will be prohibited. In May, the city reported around 1,800 registered STRs, and this number has increased to at least 1,910 addresses as of June, according to a report in The Dallas Morning News. The document, the report said, provides a more detailed overview of the distribution of Dallas’s numerous registered STRs, revealing that over 1,200 addresses will be required to cease operations following the City Council’s decision on June 14 to ban STRs in single-family neighborhoods, where rentals for less than 30 days are not allowed.
The analysis conducted by the newspaper indicates that only about 10% (approximately 200 addresses) of the registered STRs fall within areas where the city already permits such rentals. An additional estimated 23% (around 450 addresses) are situated in the city’s conservation or planned development districts.
Elsewhere on Skift
Americans traveling abroad spent around $17 billion in May, which combined with total international traveler spending, gives the U.S. a travel trade surplus of $530 million.
In May, international traveler spending in the U.S. reached its highest point of monthly spending since the pandemic started in February 2020, according to the National Travel and Tourism Office’s latest data. International travelers spent more than $17.5 billion on travel to, and tourism-related activities within, the U.S., up 26% from May 2022. Skift’s Dawit Habtemariam writes “International traveler spending keeps reaching new post-pandemic highs.”
Srividya Kalyanaraman writes the Skift Short-Term Rental Report. Contact her with news tips and feedback at [email protected]
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