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Dumping and visa issues draw Russians away from Croatia

Thanks to a special agreement with the European Union, Russian citizens can enter Croatia with Schengen multivisas. Those wishing to obtain a national Croatian visa will soon be able to make use of about 20 new visa application centers throughout Russia. Besides that, the consular staff will be increased. However the current summer season is not yet too successful: tour operators report a fall in demand. The Croatian side, too, is talking about a significant drop in the tourist flow from Russia: in a popular holiday destination Istria alone, it has gone 50% down compared to the 2012's results.

As we were told by the head of the PR service of TUI Russia & CIS, Ms. Natalia Novikova, the sales of tours to Croatia are already 25-30% behind the previous year's level. "Even the permission to enter the country for Schengen visa holders hasn't really improved the situation. The decision has been made too close to the season's start and the early booking campaign has barely worked out, she explained. The tourist flow switched to the near-by visa-free Montenegro. And as for now, the sales are largely affected by massive dumping on the destination caused by the Biblio Globus Company's entering the Croatian market."

According to the Head of the Croatian department at DSBW Tours, Mr. Arthur Khakimov, the market access by such a large operator usually greatly affects the sales volumes of other industry players. "Biblio Globus mostly offers cheap third-line hotels; and its tours are in demand with Russian holidaymakers used to affordable prices for mass destinations," he explained. The visa regime took some 20% of the flow away from Croatia. While near-by Montenegro turned out to be on velvet – the upturn on the destination is at least 30-35% compared to 2012. "As soon as the clients find out that Croatia has become a visa destination, they immediately switch to considering a tour to Montenegro instead," the expert pointed out.

Mr. Sergey Prigolovkin, the Chairman of the Board of Directors of Paks Company, reports a downturn of at least 20% of the tourist flow to Croatia caused by the visa regime implementation. However, by the end of the season the situation should become more stable

An average 10-day package tour for late July – early August based on accommodation in a fair 3-star hotel with half board will stand in €1350 per person. The package includes a charter flight by Transaero, Ural Airlines or Yamal; the visa fee is paid separately. At Vand International Tour a real value of such a package starts at €700 per person. In this respect, says its Director General, Mrs. Tatiana Vand, the travel sector is deeply concerned by the Biblio Globus's pricing policy: "They give it away for €350; and a price like this in July-August – the season's peak – is destroying the entire season for the market.: For as little money the tourists are ready to put up with 10-15-hour delays of their charter flights as well as with cheap hotels located far away from the sea etc.

Sergey Prigolovkin agrees that the dumping has become a threat for the Croatian season. Besides, there is an excess of air transportation on the destination as apart from the many charters the S7 Airlines has started scheduled services to Dubrovnik, Pula, and Split this summer. According to Mr. Prigolovkin, some operators have already been forced to cut their charter programs to Dubrovnik and Pula.

The Vand Company has cut its firm blocks on the flights to Croatia by 60%; as a result the number of its FITs grew 70%. The company hasn't yet lost any of its clients, thanks to its good reputation and the variety of offers. However, should the dumping stay like this for another season, the company is sure to lose a good part of the customers, the tour operator's director deems. "We haven't been affected by the visa regime introduction; many of our destinations require visas and the tourists and the market players are used to it. Visas are not the issue here, the dumping is," insists Mrs. Vand.

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