Rising prices and more building sites? How joining the euro might affect holidays to Croatia
Croatia will adopt the euro on January 1, almost a decade after joining the EU, making it the 20th member of the eurozone. The transition is expected to be smooth – the Croatian kuna (kn) has long been pegged to the euro, so most Croats are accustomed to both currencies. A fixed conversion rate has been set at €1 = 7.5345kn.
Preparations for the introduction of the currency have already begun. Since September 5, prices in shops and elsewhere have been displayed in both kuna and euros, a practice that will continue throughout 2023. The Ministry of Economy and Sustainable Development has issued a Code of Ethics to deter businesses from attempting to profit from the changeover.
For the first fortnight, from January 1-14, it will be possible to pay in cash in either kuna or euro, but change must be given back in euros. Meanwhile, Croats will be able to exchange any unspent kuna for euros at their banks until the end of 2023.
After years of growth, tourism now accounts for 20 per cent of Croatia’s GDP – so how will the introduction of the euro affect holidaymakers?
“For years, the most common question has been, ‘How much is that in Euros?’. Up until now, visitors have had to change money, feeling unsure about exchange rates and costs, and then be stuck with leftover kuna at the end of their trip,” says Iva Perković, Branch manager of Swanky Travel in Zagreb. “The euro will solve these problems and make tourists more comfortable. It will also be beneficial to Croatia’s increasing number of remote workers and digital nomads.”
Hospitality development specialist Zoran Pejović of Paradox Hospitality adds: “I don’t expect any changes in accommodation prices, as room rates have been published in euros for years. If anything, this summer has seen an increase that has already been calculated for that change. Restaurants, on the other hand, will probably be doing some rounding up, and not necessarily only to the next digit, but given inflation and rising energy costs, it will be difficult to determine the cause of the increase.
“Foreign investors have been looking more favourably at investment opportunities in Croatia for a couple of years now, due to Croatia’s increased credit rating, and the prospect of Croatia joining the eurozone. I expect that interest to keep steadily increasing, as many investors are looking for opportunities to enter the real estate market through hospitality, as a safer long-term investment.”
Regarding price rises, some are more sceptical. “We’re already very familiar with euros. The problem is that the change is coming at the same time as inflation. Naturally prices will go up with the euro, but they’ve already gone up a lot,” says Nina Marić Buzadžić, until recently general manager at Little Green Bay on Hvar.
“In terms of hospitality, this means a huge increase in goods prices and salaries. Workers are requesting much higher salaries to be able to cover their living expenses – I can see this from recruiting new staff for next season. As a response, hoteliers have already raised their prices, to be able to cover the difference and still earn something.”
Minting of the new Croatian euro coins began in July. So will there be a sense of nostalgia for the kuna? Maybe not, as each EU country designs its own motifs for the head-side of the euros it mints, and the same pine marten that graces the kuna (which is named after the pint-sized mammal) will grace the new Croatian €1 coins, posing against a backdrop of the chequerboard, which features on the Croatian coat of arms and on the red-and-white national football strip.
Meanwhile, the €2 coin will display a map of Croatia, also against a chequerboard backdrop. A portrait of the genius inventor and electrical engineer Nikola Tesla will be emblazoned on the golden 10c, 20c and 50c coins. Tesla was born here in Smiljan in the rural Lika region - his childhood home is now the Nikola Tesla Memorial Centre.
Finally, the smallest denomination, the copper-coloured 1c, 2c and 5c coins, will bear the letters HR (the abbreviation of Hrvatska, meaning Croatia) in Glagolithic script. Glagolithic, dating from the ninth century, is the oldest Slavic alphabet and was used by the Catholic church in Croatia for almost a millennium.
