News for the Hospitality Executive
Istraturist Expansion Right on Target in Umag,
a Coastal City in Istria, Croatia
by Barry Napier, April 2009
Istraturist Umag d.d. are the biggest provider of hotels and resorts in Istria, Croatia, and have other establishments in the Mediterranean. The latest Hotel, just opened, is the Sol Garden Istra in Umag, the most north-westerly point of Croatia, not far from the Slovenian border.
The Sol Garden Istra, one of the Sol Melia group, with over 400 beds, has some locals bemused, because the ‘sol’ is taken from Spanish for ‘sun’, but in Croatian, ‘sol’ means ‘salt’! There are other ‘Sol’ Melia’s in Umag, a popular town dominated by the Istraturism group, with themed hotels, resorts, and camping sites in beautiful surroundings.
The new four-star Hotel is built on a grand scale, and the entrance is imposingly spacious. It is themed to display an Istrian flavour in the main public areas. Rooms are modern, and corridors to rooms are delightfully illuminated with restrained soft blue lights.
Concierge is not immediately obvious, because is to the left as you go through the large doors, so it does not take up the eye on entering – good feature. There is a huge public seating area as you go in. To the right is a large coffee area with glass frontage. To the left of that is the very big restaurant area, with sufficient tables to cover every guest at maximum take-up. I was assured the kitchens could cope with that! The eating areas are also themed along Istrian lines.
Rooms have good views, some to the sea shore, which is across the road, and some to the pool area, from balconies. The pool area has several illuminated pools, which look spectacular at night. And there is a large wellness centre.
In an interview with the CEO of Istraturist, Gordana Tomicic, an attractive,
dynamic woman, I was told of the current activity of the company, which
involves raising all its establishments to four star status. Se says this
is vital if they are to be sustainable and profitable in today’s tourism
In 2007 the company invested over Euro 22 million or nearly $29 million USD (at current rate of exchange) on building new stock. Overall, investment has been over Euro 100,000 million up to 2007, with another figure of over Euro 13.5 million/almost $18 million USD spent in 2008. These are big amounts in a time of recession, but it shows the confidence Istraturist has in its abilities to make things work. Istraturist’s camping sites are also being raised to four-star status.
Gordana referred to the new Kempinsky five-star soon to open on the cliffs above Umag and the already open Skiper Hotel next door to it. She was dismayed that the local authorities gave these establishments an address that did not include the name ‘Umag’. The reason is that, as part of its huge investment in the area itself, Istraturist is spending large amounts of capital on recreating Umag town and area as one big destination package.
As Gordana said in her 2007 company report: “an isolated development (e.g. an hotel)… is not adequate enough… part of (our) resources must be directed (toward) improving the tourism image of Umag, because the object of demand (by) the modern tourist market is a destination; (and) accommodation capacities, even though significant, are only a part of the destination’s offer.”
This is why the company is heavily involved in working out the Istrian Ten Year Plan with local government and other providers.
Last year the company opened its huge Umag Villa resort, which contains apartments plus smaller versions of Istrian villas, with many onsite features. Set on the sea-shore, the outlook towards Slovenia and Italy is impressive. When I was there, snow-capped mountains over the Adriatic sea were easily visible from one of the five-star villa’s outdoor hot-tub!
Beyond that, is the newly opened Sol Garden Istra, again by the sea. The land for these projects was given to the company by the government, to help stimulate employment. Not only has this been achieved, but Istraturist has raised salaries for its employees, in the belief that this will not just increase personal income, but also their motivation, promoting Istria by their very enthusiasm. The employees I met certainly seemed motivated and loyal.
Allied to the desire to make all of Umag town tourist-friendly, is the much bigger desire to make the whole of the Istria region a mecca for tourists. Realistically, Gordana knows that tourism money will thereby enter many businesses not associated with her company direct. But, by improving the image of a whole region, she knows that the spin-off will be greater income for her own organisation. If only other companies had such good sense.
As Gordana said, Croatia is a young democracy and the country is still “finding its feet” after spending so many decades as an insular communistic state. Everybody in the local municipality of Umag is now working towards the new goal, to make the area a lifestyle destination for a wide spectrum of foreign tourists. Some other municipalities are lagging behind in this goal for their own areas, but Gordana believes they will soon see the benefits of working towards the same goal, and start to put in more effort. Thus far, she said, many leaders tend to think politically (as in the old regime) rather than financially, so losing themselves money.
This is why Istraturist, as a company, is helping to motivate political leaders in the region, along with developing businesses, using everything from mundane infrastructure changes to building new hotels. But, to Gordana, the real core of Istraturist’s work is human relationships, and everything is woven into one image - Istria.
Company Report figures I saw, show Istraturist hotels had a revenue growth of 20% over the previous year; their gross operating profit was 52% of the total operational costs. Campsite revenue growth was 12% - in just three years its growth in revenue was 79% with a 66% increase in profitability. And, though the wage bill increased across the board, to help bring everybody up to speed and to improve motivation, profits keep rising, though probably more slowly lately, because of the credit crisis. Somebody is doing something right!
A slight shadow is over the company has been caused by Croatian monetary and tax policies – but I have no doubt these have already been factored-in. Greatest risk right now, recognised by Gordana, is the current problem with credit, especially as its loans are usually in Euro and Swiss francs. This is one reason why the company is updating all its assets, to minimise the impact of negative moves in the global financial world. Only a strong company would gamble on expansion at such a time.
Another arm of Istraturist is its golfing business, Istra Golf-Umag, d.o.o - ATPturnir. This organises and runs the annual Umag ATP Croatia Open tournament, with current prize money of $400,000 USD. The venture is seen as a great marketing opportunity for Istria. Obviously, until Istria gets its own fully-operating professional golf course, the golfing side of Istra Golf-Umag will remain dormant, but its tennis tournament side is very strong.
© Barry Napier
Sol Melia Hrvatska:
|Also See:||Istria's Ten Year Tourism Plan Targets Discerning Visitors; Includes Many Investment Opportunities for Hoteliers / July 2006|