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Croatian leading hotelier's revenue rising despite crisis

Nov 03, 2009

ZAGREB - Croatia's leading hotelier, Valamar VLHO.ZA, sees revenues rising 7 percent this year, with hotel upgrades helping it buck the global sector downturn that has dented tourism worldwide, a company official said.

"The results are above our expectations and they are, in our view, due to investments in improvement of our facilities and services," Valamar management board member Zrinko Kamber told reporters on Tuesday.

Valamar makes up one tenth of Croatia's categorised tourist capacity and its 2008 revenues were a touch above 700 million kuna ($141.3 million).

Croatia, which hopes to join the European Union in 2012, has enjoyed a strong boom of summer tourism along its pristine Adriatic coast in the past decade.

Tourism accounts for more than 20 percent of Croatia's gross domestic product. This year the country expects a fall of total tourism revenues of around 5 percent from last year's 7.1 billion euros ($10.39 billion).

Tourism officials said the result was better than expected, given the crisis in Croatia's key European markets.

Valamar, which runs 22 Adriatic hotels, eight apartment complexes and nine campsites, has invested 911 million kuna in upgrading their offer in the past five years. It plans to keep up the pace by investing some 150 million kuna next year.

"Our policy is not simply to cut prices in this recession period, but to invest further in our offer. We think it pays off ... Booking for next year has already started and it looks good," Kamber said.

Valamar shares fell 1.09 percent to 26.80 kuna in the early afternoon trade. They peaked at a year-high 37.90 kuna in mid-September.

Valamar urged the government to provide more incentives and lower taxation for development of the tourist industry, which single-handedly offsets a considerable portion of Croatia's huge trade deficit.

Croatia's tourism is in dire need of upgrading facilities and improving services as it is now largely focused on the three summer months due to a shortage of high-quality hoteliers and off-season content for holiday-makers.

Croatian leading hotelier's revenue rising despite crisis
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