Split - Foreign investors brought the know-how to Croatia's
attractive coast to help transform and prod its crucial tourism
industry forward, but often felt they had to battle too many
obstacles to do business.
The prominent Austrian hotelier Wilfried Holleis packed his bags
and sold his project to convert a decrepit resort on the island
Katarina into a luxury holiday destination.
Holleis said he wasted years trying to obtain the promised permits
to renovate, while fighting murky legal battles and warding off his
junior Croatian partner's backstabbing.
Another major investor, the co-owner of the Austrian Valamar Group
Georg Eltz, accused Croatian businessmen and local politicians of
playing a crooked game.
'They keep us only for milking purposes,' says Eltz. 'They cavort
with politicians to keep foreigners out and the business to
themselves.'
Foreign hotel operators were a key ingredient in the rapidly
taking the Croatian tourist industry out of the doldrums over
the last 10 years.
Tourism is now the country's largest revenue-generator, raking in
some 7 billion euros, or roughly one-fifth of the gross domestic
product in 2008, though the financial crisis is expected to slash
earnings by no less than 10 per cent this year.
Though they have been good to Croatia, foreign hotel operators
have complained that Croatia has not been good to them. Recently they
met on Island Bol to compare notes.
Among other things, they are forced to buy food and beverages from
Croatian monopolists, at a price one-quarter higher than what one
would pay for instance in Germany.
'Out guests just can't understand why it's so expensive to eat and
drink here,' said a representative of Gruber-Reisen, which operates a
hotel on the Adriatic.
The red tape, legal and quasi-legal hurdles are even worse,
because they often create obstacles on what the investor thought was
a clear road to a business.
The Falkensteiner-Michaeler Group, another Austrian tourism
concern, says it had to dodge a hail of problems hurled at it
apparently to keep it from opening one of the early Western-standard,
four-star hotels at Borik near the port of Zadar.
By Croatian standards, Punta Scala resort project on the peninsula
of the same name is a huge project - a resort including an ultra-
modern, self-sustainable, ecological luxury hotel, a family hotel and
an apartment bloc.
The friction involved in the plans was unbelievable, says the
company chief executive Otmar Michaeler.
The lot of land actually had to be purchased twice, at a total
cost of 25 million euros (34.7 million dollars) and an additional 10
million euros were required for infrastructure, though none of it -
road, water and power lines - existed.
The perpetually changing rules are doing everything possible to
hamper the sale of the 187 apartments - which is the backbone of the
whole project - waiting for the final touches and buyers.
'This way, our 210-million euro investment will not repay itself
in 50 years,' says Michaeler.
Meanwhile, taking advantage of the foundations laid by the
Austrians, a Croatian-owned apartment bloc sprung up in the immediate
neighbourhood and quickly went on sale.
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