Valamar Riviera expects business recovery to 85% of 2019

Published 29. October 2021.

According to the third quarter financial report, Valamar Riviera has achieved a significant recovery compared to crisis year 2020. Operating profit (EBITDA) in the first nine months of 2021 recovered to 93% of the 2019 pre-crisis level while operating revenues in the same period amounted to EUR 199.2 million, reaching 75% of 2019 revenues.

The first two quarters of 2021 were still strongly affected by the COVID-19 pandemic and travel restrictions, while the third quarter brought normalization of tourism activities in almost all destinations. Compared to the same pre-crisis period, total number of overnights in the first nine months reached 75% of 2019, with an average price increase of 7%. The largest number of Valamar hotels opened in June while the usual peak season occupancy was reached mid-July Given high demand, Valamar achieved excellent results in northern destinations in the third quarter, especially in premium hotels and resorts which generated 10% more revenues than in 2019, and in the camping segment where revenues were 15% higher than in 2019. However, destination Dubrovnik and two to three-star properties did not achieve a significant business recovery during the 2021 season.

In 2021, Valamar Riviera expects an operating profit (EBITDA) in the range of EUR 84.3 million to 86.6 million, or 83% to 85% of 2019 realization, which is a result of austerity measures in the first part of 2021 and the strong business recovery during the summer season. Consolidated revenues for 2021 are estimated at HRK 215.8 million to 219.8 million, or around 75% of 2019 for the same period. Despite positive financial results anticipated for 2021, the net loss of EUR 47.7 million from 2020 will largely not be compensated. Complete business recovery is expected in 2022 and 2023.

Throughout the crisis, Valamar continued to invest in the portfolio and product development. Valamar completed Istra Premium Camping Resort 5 *, the largest camping development project in Croatia, having invested a total of EUR 60.4 million, as well as investments in Valamar Parentino hotel in Poreč and Valamar Meteor hotel in Makarska, designed for family holidays. Valamar also launched its first lifestyle hotel [PLACES] by Valamar aimed at the YZ generation, and has started construction of a new fully sustainable eco family resort on Hvar island. The resort will adhere to the highest green building standards, including using renewable energy sources and achieving high-energy efficiency.

In addition, Valamar expanded its strategic cooperation with pension funds in 2021. Valamar and AZ mirovinski fondovi agreed on the second recapitalization phase of Imperial Riviera worth EUR 92.1 million with the aim of further developing the portfolio in Dubrovnik, Makarska and on the island of Rab. Valamar has also embarked on an investment cycle on the island of Hvar with PBZ Croatia osiguranje društvo za upravljanje mirovinskim fondovima worth EUR 40 million.

With the support of social partners and government measures, Valamar has protected employment during the crisis which has enabled solid summer season results. However, the coronacrisis will continue to have a strong impact on leisure tourism and the economy in 2022.

"The coming year will remain affected by the crisis, especially due to disruptions on the labor market, in air travel and in the procurement of goods and services. Croatia is the closest Mediterranean destination to a significant portion of Europe, and is in a position to turn the crisis into an opportunity. We can achieve this only if we start preparing the next tourism season immediately, especially in terms of employee recruitment and training, and restarting investments," said Željko Kukurin, the CEO of Valamar Riviera.