Hotel sector performs well in 2025, but costs rise faster than revenue
Croatian hoteliers recorded a strong 2025 season with high occupancy rates, but rising costs, especially for labour and food, outpaced revenue growth and are squeezing investment capacity and competitiveness, speakers said at the annual hoteliers' congress.
The two-day event, organised by the Croatian Hotel Employers' Association (UPUHH) and the Croatian Tourism Association (HUT) in partnership with the IstraTech company, focuses on current sector trends and expectations for 2026.
UPUHH president and HUT director Veljko Ostojić said 2025 had been a year of market stabilisation without major surprises, but the sector continued to struggle with pronounced seasonality. Hotels and campsites have mitigated this by increasing occupancy and extending operating days.
He said rising costs were shaping pricing, noting that labour costs in hospitality increased by more than 50% between 2020 and 2025, bringing wages close to European and Mediterranean averages. Profitability, however, is not rising at the same pace, limiting funds for essential investment. Labour costs in Croatia rose by over 51% in that period, compared with 37% in the EU and Mediterranean. Food prices rose by 4.9% in Croatia in the first nine months of 2025, compared with 2.8% in the EU.