Dubrovnik
Croatia has recorded a reduction of almost 10,000 tourist beds, a development the Minister of Tourism and Sport, Tonči Glavina, has described as a direct and positive outcome of comprehensive tourism, spatial and tax reforms.
Speaking on RTL Danas, Glavina said the decline was neither accidental nor temporary, but part of a deliberate shift in tourism policy aimed at improving sustainability, housing availability and the overall quality of life in tourist destinations.
“More than a year ago, we explained that the goal of these reforms was to improve occupancy of existing capacities, stop the uncontrolled expansion of new accommodation and create conditions for better living – more homes for long-term rent and more sustainable destinations,” Glavina said.
He added that the government was “very satisfied” with the results so far, stressing that the measures represent a long-term change of direction, not a short-term intervention.
One of the clearest outcomes of the reforms has been a return of housing to the long-term rental market.
For the first time since 2018, private accommodation providers have recorded an increase in occupancy. At the same time, there are 14 per cent more taxpayers registered for long-term rental, while more than 3,600 property owners have partially or fully switched from short-term to long-term leasing.
“This is exactly what we were aiming for, and these are very strong results,” the minister said.
Local Authorities Set Rental Taxes
Addressing concerns over higher taxes for private renters, Glavina emphasised that the national government does not determine the exact amount of the flat-rate rental tax.
“Cities and municipalities decide the level of the flat-rate tax. We have set only the minimum and maximum limits,” he explained, adding that local authorities are encouraged to adjust rates where necessary.
According to Glavina, the system has now largely stabilised, and further positive effects are expected.
Property Market Showing Early Signs of Change
While property prices have not yet fallen, the minister revealed that real estate agents are reporting a sharp slowdown in sales, particularly along the Adriatic coast.
“Sales have dropped by around 30 per cent in Adriatic counties,” he said, suggesting this could eventually lead to price corrections.
Croatia, he noted, is the first country in Europe to implement such a comprehensive reform aimed at changing long-standing property and tourism trends.
“We hope this will lead to price stabilisation, if not for new builds, then at least for older apartments,” Glavina said.
Prices Key to the 2025 Tourist Season
Looking ahead, Glavina warned that high prices and margins pose the greatest risk to the upcoming tourist season.
“Research shows that guests will travel less and spend less next year. Price is the key factor when choosing a destination,” he said.
Tourists, he added, increasingly make last-minute decisions and compare Croatia directly with competitors such as Spain and Italy.
Glavina stressed that accommodation prices are not the main driver of tourism inflation.
“This year, results in hotels and campsites grew by around 2.4 and 2.2 per cent,” he noted. “The bigger problem lies in retail, hospitality services, transport and other costs.”
He called for a sector-wide reset, urging all stakeholders to stabilise prices.
“If we fail to do that, we will feel the consequences very quickly – and possibly already this year,” he warned.