Sustainable tourism development - A case study of Croatia
- 1. Paulius Bagdanskas U1271535 Travel and Tourism management University of Huddersfield Module: BHT 4013 Sustainable Tourism Module leader: Dr Nick Hubbard Due date of work: 06/12/15 Word count: 2500 “Among the most significant reasons used by government and private sector businesses for developing tourism is the associated economic gain. … While the economic advantages of tourism are certainly clear, many negative aspects are apparent” (Page & Connell, 2009, p.385)
- 2. Tourism, in general is an important part of the country’s economic development. Governments has always been interested in tourism, especially for growing countries, in order to achieve economic benefit from development of tourism. (Banozic et al., 2015). Croatian tourism is a part of Europe and worldwide unsustainable and sustainable tourism. Sustainable tourism is industry which brings efforts together to maintain low effect on environmental, local and natural culture and to present positive benefits, such as, preservation of natural and cultural resources and creating employment for the country. Activities involved in sustainable tourism should have a low impact on local community and natural environment. Differently from sustainable tourism, unsustainable tourism is where industries fail to protect natural and cultural environment, governments do not invest and participate, negative impacts on local communities occur, damaging historical heritage and that there is a bigger negative impact than a positive. Shortage of international trade, communication and new opportunities, noise, water and air pollution and country which fails to achieve profit are important factors as well (Karamarko, 2012). For countries worldwide rise in tourist flows can be seen as an economic advantage when it comes to foreign exchange earnings, income, regional development, local communities, revenue, and employment opportunities. It helps to grow demand in terms of service and goods and can promote development for the country instead of import (Akar, 2012). Tourism in Croatia is one of the most important sectors which highly adds its value to country’s economy. Travel & Tourism total contribution of GDP is divided into induced, direct and indirect contributions. The direct contribution of Travel & Tourism GDP in Croatia was around €4.5 million, 12.5% of total GDP in 2014 and in 2015 is predicted to increase by 4.5% (WTTC, 2015). Direct contribution involves economic activity which is linked with visitors, such as, airlines, travel agents, hotels and other types of tourist transportation services. Also, the activities of retail trade, restaurants and leisure industries involving recreational, sports and cultural services, for example, recreational, cultural and sports services directly supported by visitors. Total internal Travel and Tourism expenditure by non-locals and locals for leisure and business purposes and as well government costs on services outside the market that are linked with tourists (Pavlic et al., 2015). As well, tourism is industry where large amount of labour is involved and it is a very intensive industry where workers productivity is very high. Travel and Tourism 1
- 3. created approximately 139,500 jobs in Croatia in 2014, which is 13.6% of total employment and increase in Travel and Tourism jobs in 2015 is foreseen to go up by 4% (WTTC, 2015). The total Travel and Tourism contribution covers broader impacts on Croatian economy, such as, induced and indirect impacts. Travel and Tourism indirect contribution to jobs and GDP involves general government expenditure to contribution of overall tourism activity. As well, the capital investment expenditure when all sectors are linked to Travel and Tourism industry (Pavlic et al., 2015). Lastly, Induced Travel and Tourism contribution is wider to employment and GDP because of expenditure by people who work indirectly or directly in Travel and Tourism industry. According to WTTC report (2015) in Croatia total contribution consisted of around €10.4 million, 28.3% of GDP in 2014 and in 2015 is predicted to increase by 2.2% and around 310,500 jobs were created in 2014, which is 30.2% of total employment and is foreseen to go up by 2.7% in 2015. All this economic contribution clearly indicates that tourism is substantial for development of the destination and it is seen as an invisible export and it is responsible for the significant share of Croatian foreign exchange earnings. According to Croatian National Bank (2015) Balance of payments, foreign exchange in 2013 was approximately €6.25 million and €6.38 million in 2014. Two decades ago, 1990s for Croatia were very important because Croatia was in a war of independence during 1991-1995 in a battle with Serbians where Croatia wanted to separate from Yugoslavia. Croatia established stabilisation program in 1993 to prevent hyperinflation and to help to end the disastrous economic crisis and Croatia chose open economy with a controlled float exchange rate management (Sipic & Zavisic, 2015). Croatian National Bank regularly interferes concerning foreign exchange market to make sure that the exchange rate Croatian Kuna against the Euro is stabilised in both ways. Croatian Kuna at the beginning and at the end of the year tends to lose its value. The value of Kuna goes up during the summer period because of tourist expenditure in the country and of an increased demand for Kuna in the tourist season (Croatian National Bank, 2015). Every year Croatian National Bank aims to even the exchange rate by buying or selling national currency from domestic commercial banks during the high summer period. Also, making sure that Croatian exchange rate is solid and it does not change that much because Croatian economy is experiencing high level of “euroisation” (Pavlic et al., 2015). Overvalued Croatian Kuna in the export market has low competition for its export products in foreign markets. External competition of the tourism in Croatia could be controlled over applying real effective exchange rate. 2
- 4. One of the main negative economic impacts of Croatia is seasonality. According to Corluka et al. (2013), diversification of tourism supply within selective forms of tourism can lead to a solution of how to soften seasonality. An option to extend summer season and achieve sustainable development is possible if the selective forms of market resources are understood at the destination and with persistent allocation of tourism demand through the year. During season months in Croatia when tourist demand is high and outside season is low, most of accommodation facilities are inefficient and half empty. Tourism facilities, local community and government need to get enough revenue through the busy months in summer to make sure the rest of the year is prosperous (Banozic et al., 2015). Mainly, the negative economic impact of seasonality is dependent on low season, generally tourism in Croatia has loss of profit due to the factor that country’s facilities and resources are not being used effectively at that time of the year (Jang, 2004). Tourism resources are at danger when are not being fully used, on top of that, country is receiving low annual return on capital because of revenue fluctuation. Concerning sustainable tourism development very high tourist demand during peak season has a negative impact, as well, on socio-cultural and ecological side of the tourism destination. High volume of tourists during the busy season can be linked to ecological impacts of the destination (Lewis & Bischoff, 2005). Large tourist condensation in one place and excessive use during the season in summer is the primary environmental issue of seasonality. Environmental pollution is the cause of high volume of tourism activities undertaken, such as, camping, canoeing, hiking and littering in national parks, beaches, reservoirs (Corluka et al., 2013). Socio-cultural impacts have big consequences for the local community due to seasonal fluctuations. Local people are affected by traffic jams, slow traffic, overcrowded streets, no space for parking for tourists and other people, especially, Croatia has a big problem towards space for cars. Also, enormous rise in costs of community services and more trouble for the government for funding the community regarding rise in tourist numbers on high peak season which puts pressure to normal operating services and infrastructure (Lewis & Bischoff, 2005). Often countries experience safety issues due to increase in tourist numbers during the busy summer season, chance of crime rate is higher than usual because the more people come to visit a particular place or whether exploring famous city where tourist flows are massive the higher chance of crime is possible. A destination increases prices of tourism services during high tourist demand in summer and during low tourist demand off-season reduces it. It is hard to achieve satisfaction and good 3
- 5. level of quality because of limited accommodation availability and tourist transport services (Jang, 2004). There is also a negative side during low season tourist demand, for example, facilities are suffering shortages of tourists and are experiencing financial problems and because of that facilities have to cut on numbers of facilities and close them and for people who want to see the destination during the low season a problem of satisfaction occurs. To lead destination to sustainable development extension of summer season and distribution of tourist demand from non- peak season to peak season need to be implemented carefully (Corluka et al., 2013). The term “sea- sun-sand” is very popular in between seasonal destinations and most of them have sustainability issues, including cultural, environmental and social impacts. Solution to minimize these impacts is diversification of selective forms of tourism and to aim to attract extra tourists during the low season, to create more attractions, promote various types of tourism services which are not connected with “sea-sun-sand” (Lee et al., 2008). For example, In Croatia in low season country offers fabulous views of Plitvice national park full of icicles, frozen waterfalls, and almost everything covered in the snow and low tourist concentration around the national park. Also, Croatia has highlands where tourists use skiing and snowboarding resorts. Though, Croatia does not get enough income and high tourist flows from that and does not have that much to offer during off peak season country must find what to offer and how to maintain sustainability at the destination during all year (Capka, 2011). Cultural tourism is one of the vital factors of sustainable development at the destination (Demonja, 2013). Cultural tourism is not all about popular and overcrowded places, it is as about making it attractive and authentic involving local people along with tourists who are interested about culture, heritage and preservation of it. Cultural tourism products help destination to increase consumption, fulfill visitor expectations, leave a good impression of it and extend the length of stay. For tourism advantage of cultural tourism is seen as a perspective for long-term sustainability and one of the most crucial economic sectors in Croatia (Karamarko, 2012). Croatia for visitors offer indigenous special surroundings along charming Mediterranean coastline connecting seaside cities and exceptional culture-orientated cities. Also, moving from coastline to the continent along with small mountains and national parks on the way with the local rural areas and big urban cities. UNESCO has a big involvement in Croatia concerning preservation and towards sustainable development of the country (Demonja, 2013). Diversity of cultural and natural heritage in Croatia is under UNESCO protection, for example, Euphrasian Basilica in small town Porec, Split and 4
- 6. Dubrovnik because of unique old architecture and castles surrounding the city centres and the most important Plivice lakes which is one of the most natural wonders of the world (Demonja, 2013). Croatia surprisingly has 181 museums for such small sized country and in terms of world and domestic heritage visitor numbers reach approximately 2 million tourists per year (Statistical Yearbook of the Republic of Croatia, 2014). In 2013 Croatian government prepared plan for the development of the country’s tourism to 2020 and the aim is to create the system for innovative and novel tourism offer which should improve capital investment markets and Croatian tourism competitiveness (Demonja, 2013). Large part of the plan is linked to cultural tourism, which is important factor for Croatian tourism. Cultural offer in Croatia is not effectively established even though it is divergent and rich and actions should be taken towards improving quality of tourist offer. To attain perspective sustainability of tourism development preservation of various sites and cultural benefit has to be the key to it (Kunst, 2011). The plan for the development of the country’s tourism along with development of cultural resources and its protection begins with Croatian Ministry of Tourism and Ministry of Culture who are responsible for the development of tourism. Ministries plans are to generate allocated funds for cultural tourism oriented plans which would involve not only local government, as well, travel agencies, local community and various cultural organisations (The government of the republic of Croatia, 2013). The main aim of the plan is that conservation of picturesque Croatian variety of cultural and natural heritage and fundamentals of sustainable development should substantiate tourist development at local and national level. Reviewing the plan issued by the government the strategy intelligibly indicates the significance of cultural tourism for the development of tourism in the future in Croatia. Croatia has a lot of potential for the heritage and culture however the main problem is that planning, aims and opportunities outcome for the development is little concerning the local and regional level. Local community or local government must consider giving bigger contribution to Croatian cultural tourism’s further development in view of the fact that local government has the biggest involvement of development of cultural tourism (Mesic, 2008). Local communities have to be assigned to participate in international organisations which solve problems concerning utilisation of social and natural resources. Croatia has guaranteed advantage over the competitors who try to interfere to Croatian tourism because of various factors including Croatian tourism policy which highlights environmental awareness. This tourism policy preserves the most precious resources of the country 5
- 7. including pristine coastline, scenic and preserved natural environment and the authenticity of Croatian rural villages (Turkalj et al., 2013). It is compulsory for Croatia to adapt regionalisation to look after not fully developed regions and to balance the country and obtain a rapid growth. Regionalisation is used as a division of the country’s land into a smaller regional segments in order to achieve efficient planning and to create a competent administrative organisation which would meet Croatian regional development policy (Turkalj et al., 2013). In Croatia there are specific laws by which regional development policy can be essential for conduction and regulation of its policy. Unfortunately, Croatian present legal structure is not legally established for conducting regional development on all regional segments of the country. According to the National Competitiveness Council (2008) objectives of favourable outcome for the regional policy consists of long-term and constant sustainable development of regional, local communities including Croatian residents and the most important point is that all types of economic activity have to be persistent for long-term in a specific region. It improves and creates new opportunities for protection and conservation, employment, development of rural and urban regions and validation. To sum up, though tourism in Croatia is improving and country is benefiting from foreign exchange earnings, creating jobs for local people involving urban and rural parts of Croatia, UNESCO and local government involvement for preservation of natural and cultural heritage and environment is visible country still has its negative side of the tourism. The main problem is seasonality which can only be reduced but not eliminated completely. The issue of seasonality in Croatia is that tourism facilities are not being fully used during off-peak season when tourist flows are low, impact on the whole country is followed as well during peak season when tourist flows are large and places are overcrowded, risk of environmental and socio-cultural problems is visible and that regional development should be maintained all year round. 6
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