The tourism industry was met with various challenges as it anticipated a positive recovery in demand for the 2023 tourist season. Besides the ongoing challenge of adopting the euro, Croatia's tourism industry faces other issues. These include the increasing cost of energy and daily living, a lack of workers, and fewer investments.
Russia's invasion of Ukraine significantly reduced the high expectations for the 2022 tourist season. Political instability, global inflation, and a slowing economy went with the invasion. The Russian invasion had several consequences in 2023. These include a decline in tourism, restrictions on airlines and airspace use, higher energy and food costs, and reduced disposable income for potential tourists.
Labour shortage
The problem of labor shortage is caused by the pandemic that started in 2020 and started the trend of layoffs. In Croatian tourism, there is a problem of finding qualified workers who meet the needs of the tourist season. The mentioned problem is being tried to be solved with the increasing import of foreign workers. Even though working conditions are getting better and wages are going up, fewer people are interested in working in tourism. This is because the cost of living keeps going up, and people's quality of life is getting worse.
Increasing energy and living expenses, limited human resources, and unaddressed concerns regarding tourist areas will hinder investment opportunities in the tourism industry. In 2023, investments in tourism were expected to reach half of the 1.05 billion euros invested in 2019.
Recommendations
For companies to respond to upcoming challenges in a timely and efficient manner, some of the recommendations are:
- Monitoring global and regional events concerning politics, economy, and market conditions
- Monitoring medium- and long-term forecasts about the movements of the economy
- Analysis of the business sector and its environment - micro and macro
With all players in the tourism industry working together to address upcoming challenges, the 2023 tourist season was predicted to be successful.