​Hospitality sector says gov't measures may cushion increased costs

Stakeholders in the hospitality industry - hoteliers, restaurateurs and private providers of accommodation - consider the government's measures aimed at alleviating the impact of energy price hikes good but think they will have difficulty not increasing prices if VAT on sector services is not cut.

Croatian Tourism Association (HUT) director Veljko Ostojić believes the government's measures could help slow down the rise in food and energy prices, which has also affected the tourism sector.

In an interview with Hina he said a precondition for that was that the lower VAT rates also resulted in lower purchase prices of food and energy.

"Reducing the pressure of growing operating costs would reduce the need to raise prices in the tourism sector, which is preparing for the tourist season, to be marked, among other things, by growing competition in the Adriatic," Ostojić said.

Prime Minister Andrej Plenković on Wednesday unveiled a HRK 4.8 billion (€640 million) package of measures aimed at cushioning the impact of rising energy prices, with the measures including a lowered VAT rate on gas supplies and some agricultural products, subsidised gas prices, one-off discounts on energy bills for pension recipients and other measures.

The head of the national federation of restaurant and bar owners (NUU), Nikola Eterović, said the measures would to some extent cushion the blow of huge price rises but only for households while restaurants and bars would not feel any positive effects, just as had been the case with previous aid schemes.

He said the lower VAT rate on food would not have any effect on restaurants and bars either and would possibly have a negative effect if some retailers used the lower VAT for unnoticed price increases.

"In any case, we are witnessing a raging inflation, and had the government responded by lowering VAT in the restaurant and bar sector to 13%, maybe we would have been able to keep the prices at the current level and increase wages to keep workers in our already devastated businesses," Eterović said, noting that purchase prices had increased constantly for restaurants and bars during the coronavirus crisis and that now they had to increase prices of their services.

The head of the association of family-run businesses providing private accommodation (ZOT), Martina Nimac Kalcina, considers as commendable the government's announcement that it would help all households and micro, small and medium businesses with gas subsidies.

"One should wait and see how high those bills will be. The current situation is very worrying, especially in the country's interior where people more or less use gas for heating, and for private providers of accommodation registered as firms or trades... because their costs are regulated as those of hotels and other large facilities. They have complained that their gas and heating bills in December were three times those for December 2020," she said.

She noted that private providers of accommodation, which account for around 70% of all accommodation capacity, should be granted loans by the Croatian Reconstruction and Development Bank to invest in quality, maintenance, and so on.

As for possible increases of prices of private accommodation, Nimac Kalcina said that it was evident that year-on-year the costs had increased so much that not even a 10-20% price increase would suffice to compensate for it.

(Hina) 

News