Croatia's Foreign Policy After Independence. The Various Impacts of Tourism on the Country

Table of Contents

1. Introduction

2. Global Tourism
2.1 Brief historic overview
2.2 Theory: General factors and effects of Tourism
2.2.1 Most popular International / European travel destinations
2.2.2 Total contribution of tourism to International / European economies – GDP’s share
2.3 General impacts of tourism on a travel destination

3. The tourism industry in Croatia
3.1 History and Development of Croatian Tourism
3.2 Tourist regions in Croatia
3.3 Concentration of tourism, types of accommodation and countries of origin

4. Analysis: A Critical View on Tourism in Croatia
4.1 Factors and effects of tourism in Croatia – Tourism numbers
4.2 Impacts of tourism on Croatia

5. Tourism Development Strategy until 2020

6. Bibliography

1. Introduction

Throughout the last years, the Croatian tourism industry was experiencing a positive long- lasting trend in foreign visits and overnight stays with its recent all-time peak in 2017 by hosting around 18.5 million tourists and therewith generating estimated revenues of 11.5 billion euros.¹ In fact, the Republic of Croatia is more and more shifting towards a well-known and omnipresent spot on the Mediterranean sea with millions of satisfied tourists from all over the world; just recently in February 2018 it was awarded with the „Most sought-after European Destination“ award by the Chinese edition of the renowned Travel + Leisure magazine.²

The object of this paper is to give the reader a general understanding of tourism on a global scale, continued by a broader overview on the history and development of Croatian tourism from its ancient times over the early 19th century to the perspectives and challenges the country is facing today. Complemented by current statistical data, a comparative report with other travel destinations is further provided.

In the main focus of this paper these tendencies are being followed by a broader theoretical framework of the general impacts of tourism on a travel destination with the focus on economic developments. Consequently, the findings will be then put in disposition, what implications the tourism industry has to Croatia and what measures could help the country for staying competitive in the coming years.

The combined topics of this paper lead us to the following research question:

What effects and challenges has the tourism industry in the case of Croatia and what steps could be implemented in the country in order to maintain a long-lasting positive development for the next decades?

Moreover, as an outlook for upcoming discussions, various factors will be briefly taken into consideration, in particular, whether the official Tourism Development Strategy until 2020 has born fruits in the last years and if the large financial contribution of tourism to the country‘s economy can be seen on a long term as a blessing or a curse for this young EU member.

2. Global Tourism

2.1 Brief historic overview

Since the very earliest times of civilization, humans have been travelling around the world for various reasons and motivations. In the ancient period, Nomadic tribes wandered from one to another place in search of food, water and safety; shortly after, with the rise of early high cultures such as the Persian, Greek and Roman empires, the construction of roads, bridges and rest houses throughout all regions was rapidly fostered. As a result, people from all corners of these empires took long journeys to visit well-known places like the oracle of Delphi, the antique Olympic games and not to forget the glorious gladiator fights.³

Therefore, with the development of a solid base for commerce, transportation and of course travel, the aspiration to move shifted in the early Middle Ages towards voyages mostly for religious reasons. Back then, large numbers of Christians as well as Muslims began setting out to the holiest places of their beliefs, particularly to mention Jerusalem and Mecca. The “adoption and spread”⁴ as well as the desire of being closest to the wise, almighty creator particularly in those spiritual locations led to numerous pilgrims making all their way through Europe and Asia until this day. Also, at the time of the Age of Discovery, many famous seafarers set sail while exploring new territories and inter alia contributing to the discovery of the American mainland by Christopher Columbus in 1492, of India by Vasco de Gama in 1498 and surely of Australia in 1606 by Willem Janszoon.

Shortly after, on the upcoming of the Renaissance period in the early 15th century and the concomitant scientific revolution, a high number of Europeans used to travel during their so- called Grand Tour, a custom of mostly upper-class young men and women, to Germany, France and Italy seeking out well-known centres for educational purposes.⁵

However, the Industrial Revolution in the middle of the 19th century and consequently the invention of a faster transportation system such as railways and later on cars or airplanes finally paved the way to modern means of travel and therewith rapidly increased individuals' opportunities in multiple areas.

Nevertheless, the actual development of mass-tourism accessible to a broader layer of the society, as we know it today, only started in the post-WW2 era thanks to global transition processes towards liberalization as well as democratization, which concluded in economic miracles, a higher income spending and of course the establishment of international hotel chains and guided full-package tours. Furthermore, voyage types now and then were by far not limited to classic leisure tourism as the majority might think and varied with the ongoing societal trends.

2.2 Theory: General factors and effects of Tourism

In order to deeply comprehend this significant economic sector, especially with regards to Croatia, it is necessary to define basic terms and also put concomitant statistics in comparison with other important travel destinations around the globe.

According to the World Tourism Organization, tourism can be defined broadly, which goes beyond the common understanding of being limited to holiday activity only and more towards people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".⁶

The following tables below show an overview of the ten most visited countries globally as well as in Europe; in addition, it is pointed out where Croatia is positioned as a travel destination.

2.2.1 Most popular International / European travel destinations

Before having a look at these tables, it is also necessary to clarify the term tourist arrivals. According to the World Travel & Tourism Council (WTTC), a nnual tourist arrivals can be generally understood as the total amount of tourists who travel to a country within one year. It is the most common measure unit to quantify the volume of international tourism thanks to its advantages that on the one hand it only takes into account the foreign inbound visitors (without the local tourists) and therewith shows an external measurement unit, whereas on the other hand it counts every recorded stay, thus if a person makes several trips to one country, each time it will be counted as one arrival, which – based on a macro-perspective – can be seen as if one more person is paying a visit to the country.⁷

International tourist arrivals (in millions)⁸

Abbildung in dieser Leseprobe nicht enthalten

European tourist arrivals (in millions)⁹

Abbildung in dieser Leseprobe nicht enthalten

According to these statistical numbers, first assumptions can be already drawn:

1. Comparing both tables, one can see that six out of the global top ten travel destinations are European countries implying that the highest rankings of global and European travel destinations are almost equivalent and global tourist numbers are highly concentrated in Europe.
2. Likewise, to be mentioned is the rising positive trend of tourist arrivals in each selected country in the period from 2013 to 2017, which means that the Travel & Tourism (T & T) sector is expected to be growing significantly in the next decades.
3. Furthermore, the first three top destinations show an overtopping number of arrivals compared to the rest, where the U.S.A. (ranked 3rd globally) had 76,9 million arrivals in 2017 and China (ranked 4th globally) around 16 million less with 60,7 million in the same year. A similar decrease also for the same year can be observed in European countries, for instance Spain (ranked 2nd) having 81.8 million arrivals, followed by Italy (ranked 3rd) with 58,3 million and continued by the United Kingdom with 37,7 million.

2.2.2 Total contribution of tourism to International / European economies – GDP’s share

Apart from the tourist arrivals, it can be also evaluated, in which way various business sectors are contributing to a country’s economic wellbeing and to what extent they are affecting its economy as a whole.

Indeed, if a country’s economy is not diversified enough and in addition one particular economic sector is playing a major role in its economic success, consequently this can lead to a high dependency on this sector and make a country quite vulnerable to serious economic crises.¹⁰

Hence, in the following subchapter a comparative overview will be given about the share of tourism in the Gross Domestic Product (GDP) of the most popular travel destinations.

It has to be mentioned that these tables refer to the total share of tourism in a country, which needs to be separated from the direct, indirect and induced contribution; these indicators will be explained in detail in the next chapter about the impacts of tourism.

Total GDP’s share of the most selected global tourist destinations (in %)¹¹

Abbildung in dieser Leseprobe nicht enthalten

Total GDP’s share of the most selected European tourist destinations (in %)¹²

Abbildung in dieser Leseprobe nicht enthalten

According to the statistical data of the WTTC, the following findings can be stated:

1. When looking at the GDP’s share in selected travel destinations (TOP 10, 2017) globally, the average total contribution of tourism to a country’s economy was 12,55 %, analogical for Europe this number was slightly lower with 11,34 %.
2. Regarding the maximum / minimum total share of tourism to a country’s economy there can be said that in 2017 globally the highest number was observed in Thailand with 21.2 % and the lowest of 7,7 % in the U.S.A.; analogically comparing European destinations, the maximum was monitored in Greece with 19,7 % and the minimum of 4,5% in Poland.

2.3 General impacts of tourism on a travel destination

The scientific research about the several impacts of tourism on travel destinations is relatively new, mostly due to an interplay between several components as well as seasonal changes and associated effects which only may occur in the future.¹³ Although much of this research work on tourism impacts since the late 1970’s reached the conclusion that negative implications outweigh its positive effects, a majority of residents of travel regions is permanently craving for more tourists in hopes of “more jobs, higher incomes, increases in tax revenues and better opportunities for [their] children”¹⁴, meaning that residents are willing to accept some negative impacts, which might occur in the long-term, in return for what they understand by desirable positive short-term impacts.¹⁵

Although the contemporary research has identified three main implications of tourism, namely economic, sociocultural and environmental impacts, the theoretical base of this paper is restricted solely on its economic effects as the most influential, pervasive and highly measurable indicator for any kind of a development analysis compared to the others.

Also, when considering several effects of tourism, it should be noted that – put into practice – all these effects are multi-faceted and strongly interdependent, nevertheless it is aspired to consider each aspect independently.¹⁶

The economic impacts of tourism belong to the most researched areas of tourism, as economic benefits are being perceived as the major form of the advantages of tourism and therewith leading to significant spill-over effects in various other sections of development.

Initially, when looking on the economic effects, the contribution of tourism should be demonstrated from the point of spending. In the figure Defining the economic contribution of Travel & Tourism by the World Travel & Tourism Council (2017) as seen below, it is indicated that the direct and immediate tourism expenditure is leading to essential consequences regarding indirect and consequently even induced effects of tourism.

[...]

¹ Croatian Ministry of Tourism (2017)

² Croatia Times (2018)

³ Jayapalan (2001), p. 1, 11 et seq.

⁴ Jayapalan (2001), p. 11

⁵ Colletta (2015), p. 226

⁶ OECD (2001), p.13

⁷ Areppim (2018), Index Mundi (2019)

⁸ World Bank (2019): International tourism, number of arrivals

⁹ World Bank (2019): International tourism, number of arrivals

¹⁰ O'Sullivan, A.; Sheffrin, S. M. (2003), p. 273

¹¹ WTTC Data Gateway (2018)

¹² WTTC Data Gateway (2018)

¹³ Mason (2008), p. 36

¹⁴ Mason (2008), p. 38

¹⁵ Wall (1997), pp. 1-10

¹⁶ Mason (2008), p. 36