Privatisation of Korcula Hotels

Some opinions about privatisation of Korcula hotels were published in today’s eddition of IBTimes. Below are selected excerpts:

On Korcula, the most populated of Croatia’s more than 1,000 islands, the state has a virtual hotel monopoly around the medieval old town resembling a little Dubrovnik. The indebted hotels lack funds for renovation and recall the styling of the 1970s and 1980s, so many wealthy visitors opt to sleep on cruise ships or yachts instead…

… Even though Croatia recently announced a new privatization for a half-stake in the Korcula hotels, sold as a group, problems are already evident: the island’s mayor says the timing during economic crisis is not right. Tomislav Perovic, managing director of real estate consultants Colliers Croatia, said privatizations often hit a brick wall of local demands. “During communism, in the smaller areas people had this sort of special fee taken out of their salaries put into the small town. So everyone feels they have a right for anything that is happening to their city,” Perovic said. “Similar to that, the local government feels that they own or should own some sort of percentage of shares for Korcula,” he continued. “Most of the investors don’t truly like to enter into some sort of purchase where the (national) government is selling something and the local government is not for that.” Some Korcula officials suggest the town should receive a 20 or 25 percent stake in the hotels for cooperation and promotion…

… British investor Michael Unsworth, who explored buying the Korcula hotels a few years ago, has doubts about the current efforts there.”The minimum price looks suspiciously high and we suspect that like most, if not all, other Croatian privatization sales this will not be a transparent transaction,” he said. “In general, for foreign investors the privatization program has not provided attractive opportunities to invest in existing hotel companies.” Unsworth instead bought several derelict houses and built six suites in a venture which he said came close to breaking even in 2009… Read the whole article here

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