Published 31. July 2020.
In the first six months of 2020, Valamar's total revenues amounted to HRK 134 million, or 81% less than in the same period last year. This is a result of closing properties from March to the end of May and significant disruptions in tourism flows caused by the global COVID-19 pandemic, which continued to affect business volumes in June.
Valamar actively managed the crisis and launched action plans to stabilize its operations in the first half of 2020. Business activities were successfully "paused" on March 15, all jobs were protected and Valamar readily welcomed the opening of the summer season in June with modified products and services that additionally increased guest safety and service quality. Operating cost-savings plans, investment decrease, payment deferrals and investor agreements have secured liquidity until 2021. Operating expenses were reduced by 61% compared to the same period last year, and the government measures supported employment levels while properties were closed. Despite the crisis, Valamar Riviera confirmed its status as the best employer in tourism this year, ranking 6th on the list of best employers in Croatia.
Valamar implemented the "Pause, Restart Program" on April 1 with the support of social partners. The program ensures continued payouts to all “paused” employees waiting for work in the amount of at least 60% of their regular salary, but not less than HRK 4,250 net. In the period from March to June, over 90% of Valamar's employees were waiting for work the cost of which was jointly borne by shareholders and the government support of payouts for employees. After opening most of its properties and the launch of the summer season, more than 4.000 of Valamar’s employees are currently working while 1% are waiting for work. Valamar will continue its "Pause, Restart program" during autumn and winter with the aim of protecting jobs until the spring of 2021, when the situation is expected to normalize.
Financial stability to continue development
In addition to protecting jobs, Valamar needed to ensure sufficient liquidity during the crisis and enable the company to continue its growth path in 2021. In March, dividend payment proposal for 2019 was revoked, and Supervisory Board members waived payment while management salaries were reduced up to 30%. Valamar also introduced policies and mechanisms to defer payment for 6 to 12 months securing the agreement of stakeholders including suppliers, contractors, banks and others with the aim of a balanced approach to crisis management and achieving business sustainability in times of crisis.
Valamar has deferred credit liabilities for 2020 and expects to finalize a new plan for additional medium-term liquidity in the following days. Financial stability and the owner-operator business model will enable the full restart of business operations and resume development in 2021.
The initially planned investment cycle for 2020 amounted to over HRK 800 million, but was reduced by HRK 125 million by the end of June. Valamar also temporarily delayed the construction of Valamar Pinea Collection Resort in Poreč, the largest single investment in Croatian tourism worth HRK 790 million, and postponed its completion. The investment in new accommodation units and services of the Valamar Parentino hotel in Poreč was successfully realized and the new family hotel welcomed its first guests in the second half of July. Imperial Riviera's Supervisory Board has given prior approval for the continuation of investments in 2021 in the amount of HRK 36 million to complete investments in the Valamar Meteor hotels in Makarska and the Valamar Parentino hotel in Poreč for the 2021 season.
Summer Season 2020
During June and July, Valamar gradually opened 21 hotels and resorts and all 15 camps in eight destinations along the Adriatic coast. Currently there are over 30,000 guests staying in Valamar properties which is a considerable success given the challenges tourism still faces globally.
Croatia has a unique opportunity to establish itself as the most desirable destination in the Mediterranean and achieve strong growth in 2021 given its high safety level, geographical and political position in Europe. It is therefore necessary to protect employment in tourism and support business organizations that have the ability and responsibility to quickly restart tourism activities. With the support of all its stakeholders, Valamar has actively managed the crisis, successfully launched the 2020 tourist season and positioned itself to successfully resume growth and development during 2021.