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.
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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.
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8. References
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