Former Yugoslavia starts comeback

Europe editor Dinah A. Spritzer recently traveled to Slovenia and Croatia with a delegation from the Central and Eastern Europe Travel Board (CEETB). Her report follows:

DUBROVNIK, Croatia -- You can't keep a good destination down. Cafes, hotels and shops in this Unesco World Heritage Site were overflowing with international tourists in May, before the start of the peak summer season.

The crowds reflect a doubling of May visitors over last year, when Croatia's tourism industry paid a tough price for the country's proximity to last spring's Kosovo conflict.

Lodgings in the jewel on the Adriatic, as the city has long been promoted, have undergone a revolution: A spate recent renovations included the $15 million remake of the Hotel Excelsior, which boasts a commanding view of the city's medieval fortifications jutting out into the sea.

Formerly a behemoth with the dreary brown blankets and carpets once ubiquitous at Yugoslavian hotels, the Excelsior is now a bastion of luxury with a Four Seasons-like decor.

Pave Zupan Ruskovic, Croatia's minister of tourism, predicted a 25% arrivals increase over 1999, a forecast by the Croatian National Tourist Office in New York, for U.S. visitors.

Things are also looking up for Croatia's neighbor, Slovenia.

Daria Gacik, director of the Slovenian Tourist Office in New York, estimated that U.S. arrivals would be up by 15% to 17% for 2000 over 1999, following a 14% increase last year.

"Not all of the hype about Americans being afraid of traveling to the former Yugoslavia is true. Last year the Americans who came to Italy and Austria didn't cut Slovenia out of their plans," she said.

Bled, a case in point

It would be misleading to look at officials' growth predictions as the end of a crisis.

Business is still not close to what it was in the late 1980s, when Yugoslavia was a magnet for European sun seekers and American cultural buffs.

A spokeswoman for the pristine resort of Lake Bled said that in the period of 1985-87, Bled received 8,000 to 10,000 Americans per year, but only 1,000 U.S. visitors in 1999.

The image of a war-torn Yugoslavia still resonates with most Americans, according to those promoting the former Yugoslav states.

This is true even for Slovenia, which was not involved in the neighboring Bosnian or Croatian conflicts of the early 1990s.

"The biggest obstacle to selling the region is that the public is still not 100% sure of its safety," said Predrag Krivokapic, president of the CEETB and Kompas Tours in Fort Lauderdale, Fla.

"Slovenians will rightly say that the fighting in Kosovo occurred two hours away by plane," said Michal Barszap, president of ITS Tours in College Station, Texas.

"What they don't understand is that sometimes I drive two hours to go to lunch -- distance means something totally different to Americans," he said.

Dubrovnik's lodging renaissance is more the exception than the rule in the former Yugoslavia. Tourism representatives here agreed that in order to attract more international visitors, they must invest in their hotels, which in some cases have not been renovated for more than a decade.

Many properties are boxy monoliths left over from Yugoslavia's socialist era, when function was given priority over form.

Most hotels in Croatia and Slovenia have not been privatized and foreign management is non-existent, in contrast to former Eastern Bloc countries like the Czech Republic and Poland, which have successfully sought Western investment and expertise for their accommodations.

Ups and downs in Croatia

In Croatia, "privatization is one of the top priorities," said Ruskovic. She noted that foundations have been put in place for privatization over the next two years for the country's 50 state-held tourism companies, of which 90% are hotels.

Ruskovic said she hopes to raise the country's profile and attract more high-end business.

"We may have to wait another few years to upgrade our facilities and service before this is achieved," she acknowledged.

Hotel financing problems were exacerbated under the 10-year rule of president Franco Tudjman, whose death last December paved the way for democracy and free market reform.

The country's 22% value-added tax, introduced in 1998 as one of Europe's highest, is another thorn in the hospitality industry's side, said Ruskovic.

"Hotels are only passing on 5% of the tax to guests for fear they won't come," she said. The minister will propose a reduction or elimination of the tax in parliament at the end of the month.

Different cities, same challenges

Dubrovnik embraced tourists with renewed facilities and attractions in 1996, one year after the Dayton Peace Accord ended the war between Croatia and Yugoslavia.

This was despite the fact that the city was shelled in 1991 and 1992, and suffered about $10 million in damage, all of which is now invisible except to the most discerning eye.

Dubrovnik's hotel facilities were among the war's casualties, with only half of the 10,000 rooms functioning following the war.

But the city has reopened and renovated properties at a frantic pace, and based on site inspections, now offers the most high-end and international-style facilities in the former Yugoslavia.

The alluring Dalmatian islands were not damaged during the war, although they are also still trying to recover their visitors.

A spokeswoman for Hvar said that before 1991, the island was averaging 10,000 visitors a day from May through October, and now that number has been cut in half.

Zagreb, the country's capital, was also hit hard by the Balkan wars. But Drazen Hocheker, director of the Zagreb Tourism & Convention Board, had some good news.

"Some of the major tour operators are back, like Trafalgar, Travelscene and Saga Holidays. Based on the bookings we have now, we think we will have an increase of 20% to 25% in arrivals for 2000," Hocheker said.

Even the region of Croatia that was occupied by Serb forces from 1991-95 is on an upward swing.

In Plitvice National Park, where facilities were destroyed by war in the early 1990s, hotels have since been restored with the foreign market in mind and feature English-speaking staff, room service and satellite televisions.

"This year we expect 400,000 visitors," said Vinko Bartolac, sales and publicity manager for the park.

Because nearly everyone who works in the park was a refugee during the war, arrivals are a cause for celebration.

But Bartolac still yearns for the pre-war days when 740,000 visitors showed up each year to see Plitvice's waterfalls and azure pools.

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