Croatian Holiday Homes Threat To Hotels

A recent report on the Croatian tourist market by the Croatian Bureau of Statistics has highlighted a useful trend which could well spread to other tourist markets around the world, the switch from hotel accommodation to private accommodation.

Last year Croatia registered a 4% increase in the number of tourist arrivals and 3% increase in the number of tourist overnight stays compared to 2006. The figures show that most tourists visiting Croatia stayed in private accommodation and together with overnight stays in hotels they account for 58.4% of total 56 million of overnight stays in 2007. So what does this mean for property markets? The figures from Croatia make interesting reading with 15 million hotel overnight stays in 2007, compared to nearly 18 million overnight private property stays, and will see many hotel chains across the world wondering if this worrying trend is set to continue.

It seems that with more and more property investors looking to rent out their property assets to the tourist market, the greater freedom associated with private accommodation is proving very attractive. A steady stream of similar reports is sure to alert property investors to the increased potential for more rental business in areas around the world such as Croatia, although this is a trend which is starting to show in other areas of the world.

When you consider the slowing world economy this report could not have come at a better time for property investors and a worse time for the hotel industry. While nobody is suggesting that the private accommodation property market will ever attract the same tourism numbers as the hotel market – due to the fact that people often go on holiday to be pampered and looked after – it is a very interesting development. When you take into consideration that renting a holiday home in Croatia more often than not works out significantly cheaper for a family of four over staying in a hotel, this preference for private holiday accommodation looks set to increase as the cost of holidays abroad soars.

As with any investment market the only possible downside is that of over saturation in certain areas which may put rental prices under pressure, but if you are careful and do your homework it seems that your holiday home investment could well pay for itself many times over in the long term.