INCREASE IN THE MARKET SHARE Since Damir Bajs took over the post of Tourism Minister, Croatia has increased its share on the global tourism marketTourism Minister Damir Bajs is currently in the spotlight, with all eyes anxiously awaiting the results of this year's tourism season. In this interview for Nacional, 46-year old Bajs reveals the results of this tourism season and admits that one of the greatest compliments for Croatia's tourism and himself personally was the visit of Taleb Rifai, General Secretary of the World Tourism Organisation, to Dubrovnik, where the two men met on Saturday.

NACIONAL: You've said that July was the most successful in the past 20 years. We've had 5.5 million guests in the first seven months of this year, do you have any figures on revenues?

- It's still too early to talk about revenues. At this time, we're satisfied, and we would consider the season a success if we could repeat 2009 results, when tourism revenues were 6.3 billion euro. We are well on our way. However, we have the problem that we sometimes don't play things out until the very end. This is a midterm result and that is why I say there is no room for euphoria, we still have a long way to go with just under half the season still ahead of us. Only on 31 December will we know how the year was. We've already begun preparations for the 2011 season, and we've announced certain measures for the post-season. The post-season will primarily be agency guests that make up the majority of arrivals. We've announced that we will pay all the agencies that work with us the second part of the incentive. This is the only programme in which the state gives an advance then when private agents need it, and they haven't disappointed us.

NACIONAL: Private-public partnerships through incentives are only part of the measures you've presented for this season. Which other measures have proven to be successful?

- We give an incentive for arrivals in Croatia via agencies and air carriers, we are working together with the private sector and we give money for planes to land in Croatia. Planes are landing in such increased numbers this year, because we signed contracts for 2010 in January. As such, this year Zadar has the highest growth in air arrivals, Dubrovnik, which is a typical air destination, is also recording excellent results after these measures. We have significant increases in the number of arrivals throughout Croatia.

NACIONAL: You yourself concluded that there is a large increase in guests from Russia, Spain and Great Britain, but that Germany and Italy have faltered somewhat. What is the reason for that?

- This was to be expected. In Germany, school holidays at the national level began later this year, only in August, and so it was clear that we would have to wait for people with children to take their holidays. In Italy, the problem was that their premier announced drastic economic cuts and called on citizens to vacation in Italy. It is expected that only some 30% of all Italian vacationers holidays outside of Italy. However, we played several other cards, and had increased numbers of guests from Poland, France, Slovenia and even Serbia.

NACIONAL: How has the Greek crisis affected our tourism season?

HEAD OF THE WORLD TOURISM Taleb Rifai arrived in Dubrovnik for vacation last Saturday at the invitation of Damir Bajs, and also met with Premier Jadranaka Kosor

- We are not concerned about the problems of others, but in our own preparations for the season. It is clear that Greece is a competitor country on the Mediterranean, and the situation in Greece surely led some guests to choose Croatia instead. Greece has the highest number of air guests, and Turkey will likely have the greatest advantage for the same reason. But after the introduction of additional airlines, a large number of which head towards Germany, we are sure to see some results in those figures. However, one competitor has problems, but the other 159 competitors do not.

NACIONAL: You've invested 30 million euro in promotions, you've increased advertisements on the internet and taken an innovative approach to promotions.

- We decided on the internet last year, and especially this year, because in these two years, the customer and the tourist is absolutely the deciding factor. Due to the current economic circumstances, the first makes the decision whether to even go on vacation and, if he does decide to go, he will decide at the last minute where to go, and that is the famous last minute travel. If he only decides the day before vacation where he wants to go, then he will first consult the internet, because he won't have time to go to a travel agency. We have a contract with Google, where we've had 300 million clicks, and special contracts with another ten portals.

NACIONAL: You have had complaints about the gastronomy offered here. Have we defined what Croatia's specialities are?

- Our local foods and drinks are aces that we tend to not use enough, and many tourists will say that the food is better than they expected. This year, we decided to launch part of a campaign focusing specifically on gastronomy. These advertisements are a smaller part of the overall campaign, but they mark a change in our strategy. We want to define Croatia as a lifestyle destination with an ecological undertone. Lifestyle has been the focus of France and Italy, and we also wanted to ensure the ecological undertones, as we have much to offer from this segment. This is also very "in" and it won't stop being "in", on the contrary. I don't know which dishes will be proclaimed native Croatian dishes, we've left that up to the experts. In this case, we've reached an agreement with the association of restaurateurs and the association of chefs, created a working group, changed the laws and now, by law, I as minister can prescribe special ordinances by which restaurants will receive the symbol of native dishes. By the end of this year, we will also have an ordinance that will be developed by a working group of professional. This creates added value for restaurateurs that is under state control. Already by next season, we should have licensed restaurants with the symbol native Croatian. Even though we are not doing this for next season, but as a lasting value, I'm sure that this will be done on time and that, most importantly, it will be done properly.

NACIONAL: You visited China this year where we successfully presented Croatia at the World Expo 2010 in Peking. The tourist visa has been temporarily revoked for the Chinese this year. How many Chinese tourists visited Croatia this year?

CURIOUS MINISTAR Though he does not drive motorcycles, Damir Bajs looked over a bike with great interest at the Zagreb Fair- Collectively, there are few Chinese visiting Croatia. Last year, the Chinese market surpassed the French market for consumption, and today, the Chinese are the fourth largest consumers in the world. The increase of their arrivals is growing at more than 10% per year, even though there were almost no Chinese tourists in Europe just a few years ago. Now there are about three million. As a tourist country, Croatia cannot afford to not be there, as this is the most prosperous market in the world. They prefer to travel in the spring and fall, which is very interesting for us. I recently heard that the first group of Chinese tourists visited Croatia, as the result of our negotiations. Anyone who is not on the Chinese market now will be regretting it in three years time.

NACIONAL: Is our infrastructure ready enough for them? Do we have, for example, enough Chinese speaking guides?

- They usually visit one country for two to four days. When they come to Europe, they do not choose one country as a destination, but experience the whole of Europe as a destination and spend a few days in several countries. They generally travel accompanied by their own guides and we need to fall into one of their already set routes as one of the additional countries. We are planning to open an office of the Croatian National Tourist Board in Peking. The Chinese are very fond of us, they call Croatia "Colodia", and they know a great deal about us. I asked them if perhaps Marco Polo presented us in China, as we of course mention that Marco Polo lived on the island of Korcula, but they couldn't give an answer.

NACIONAL: Are you pleased today that former Premier Sanader did not accept the resignation you tendered in April 2009 after your tourism measures were not accepted, such as reduction of the VAT and 70 million kuna in incentives for tour operators?

- I don't think like that. Had he then accepted my resignation, I would not be minister today and that is perfectly normal in the life of a politician. There were obvious reasons for me to tender my resignation then, and we discussed the issues and came to some solutions and then he rejected the resignation.

NACIONAL: Can you compare your cooperation with Sanader and with Premier Kosor?

- They have two completely different styles. With regard to my portfolio, Premier Kosor has a feeling for tourism, she's ready to accept new things and I think that's very positive, and is expected for the premier of a country which earns 15% of its BDP from tourism. Premier Kosor is inclined to teamwork and to work things out together, while Sanader liked to make decisions on his own.

NACIONAL: How did you respond to the premier's comment that the shot of the female backside in the tourism ad was sexist?

WITH MOTHER LJERKA BAJS, a math teacher, with whom Damir Bajs is very closes- It was perfectly legitimate for the premier to give her opinion on the ad. At that time, I said we would wait to see what the profession had to say. In that case, it was the BBDO ad agency that developed the ad. After a few days, the situation started heading in a different direction, I received calls from various women's association, the ad became controversial and that agency said that they would accept the complaint because of the subsequent negative connotations that were tied to the ad. Only after that did I give the order to throw that scene out.

NACIONAL: Are you feeling the pressure from expectations that this tourism season has to save this year's budget?

- Not overly, as our job is to handle the tourist year as best we can. Last year, the expectations were much higher. Of course, tourist alone cannot save Croatia. It can contribute to the Croatian economy, but 15% cannot save the other 85%.

NACIONAL: How do you comment on the position of financial experts who claim that we should lower the rate of the kuna, as this would make us more acceptable to foreign guests?

- The rate of the kuna is, of course, dictated by the Croatian National Bank, and not the government. But, all the same, our offers abroad are tied to the euro and I don't see how any other rate of the kuna would significantly impact Croatian tourism.

NACIONAL: Do you support the elimination of the VAT in tourism, and are there any indications that this might happen?

- In the Action Plan that is still in effect, it states that the government will consider the VAT rate in tourism. And not only the rate, but everything that is included in the starting rate. It should be said that even though we increased the rate of the general VAT, we did not increase the privileged rate, which has remained at 10%. Some competitors have a lower VAT rate, some have rates equal to or higher than ours, but the simple fact is that many countries have decided to reduce the VAT in tourism last year because Europe has started to lose its share on the world market. Poor seasons were recorded last year and the year before, and for many countries, this will be the third year in a row with declines. This forced France to reduce its VAT in hospitality and, for the first time in the history of the European Union, to introduce measures to support its tourism. Of course, in this environment, Croatia's tourism needs to be competitive, and that would be good. On the other hand, we know the situation surrounding the state budget. However, in the last two years, the para-fiscal burden has been reduced, and that was one of the main problems.

NACIONAL: How do you comment on the comparison of the cost of the trip alone to Korcula of 7000 kuna, and a seven-day all-inclusive trip to Tunisia for 3000 kuna. Has Croatia become too expensive for domestic guests?

- Croatia is competitive in tourism, not because we want to be, but because we have to be, because 90% of our guests are from abroad. These 90% of guests can choose Tunisia or Turkey or any other destination in the world. We are competitive against all other world countries. If we weren't, we wouldn't have increased our share on the market last year. Foreign guests think our prices are acceptable for what we give. That does not mean that we are the cheapest, because we are not. Last year, only Turkey was better than us in the all-inclusive category. We were second on the Mediterranean. We didn't want, nor could we compete there, there are cheaper destinations. The second issue is what you are getting for that cheaper price. There are also hotels and private accommodation in Croatia with reasonable prices. Croatia offers something for everyone. But should we cut our prices by 50 percent? No, I'm not for that. Because how will we raise them again later?

NACIONAL: When you took the helm of the Tourism Ministry in January 2008, few people believed in you. Partly because you did not come from the tourism sector, instead you are a lawyer, and many asked whether HSS was handed a hot potato. How have you handled all the traps in tourism?

- That is perfectly clear and simple. As a rule, people appoint people to manage people. Before taking over this ministry, I worked in political executive functions for more than ten years. The majority of ministers abroad change through several ministries through their political careers. Even Mrs. Antunovic was Minister of Defence, and did she have any special qualifications to fly a MIG over Virovitica? There are hundreds of such examples. Every job can be learned. You just have to be ready to accept advice, to talk to the people who know what they should know. In the end, my job boils down to ensure the funds and political support, to make certain assessments and make decisions as to where this is all heading. With regard to my ministry, the world economic and world tourism crisis have given Croatia and myself the opportunity to prove what we can do when the chips are down.

NACIONAL: This past Saturday, you were host to the General Secretary of the World Tourism Organisation, Taleb Rifai. How important was his visit to you?

- His arrival is a great compliment. He truly can choose where he will spend his vacation. The first part of his visit is a working visit, and we will discuss things that are interesting to him, such as the abolition of tourist visas. Today, because of terrorism, this is not a common practice, but he is interested on how we plan on doing this. This has obviously fared well, as after eliminating visas, we had a significant growth of visits from those countries, as people like to be comfortable when travelling and not have to worry about bureaucracy. We have organised a dinner for Mr. Rifai where he will also meet with the Premier, and later he will remain in Dubrovnik for a private vacation with his wife and children.

NACIONAL: Considering that you were the prefect of Bjelovar-Bilogora County for years and that you still live in Bjelovar today, what have you done for your region as tourism minister?

- I am a local patriot, and I am very pleased that the government has, even in these difficult times, confirmed certain important projects for my region. In the two years since I've been minister, investments of almost two billion kuna have been earmarked, for the county water supply, a new hospital and railway line. This is the first new railway line to be built in Croatia in the past 50 years.