Valamar – how the Croatian company handled the crisis caused by the Covid-19 pandemic

In the first six months of 2020, the total revenues of the Croatian group Valamar Riviera amounted to 134 million Kuna (about 17.7 million euros), which is 81% less than in the same period last year. This is the result caused by the total closure of the accommodation facilities from March to the end of May and by the significant interruptions in tourist flows caused by the Covid-19 pandemic.

Valamar actively managed the crisis, launching plans to stabilize its activities. All workplaces have been protected and the company has modified products and services with the aim of increasing the safety of guests and the quality of service. Savings plans on operating costs, reduced investments, payment extensions and agreements with investors guaranteed liquidity until 2021. Operating costs were reduced by 61% compared to the same period last year and government measures made it possible to safeguard employment levels. After the opening of most of the accommodations and the launch of the summer season, over 4,000 employees have returned to work, while only 1% are waiting to be able to resume.

On the cash front, in March the 2019 dividend payment proposal was revoked, the members of the Supervisory Board waived their compensation and executive salaries were reduced by 30%. Valamar has also introduced policies and mechanisms to defer payments from 6 to 12 months with the agreement of interested parties, including suppliers, contractors and banks.

The investment cycle initially planned for 2020, which amounted to over 800 million Kuna (just under 106 million Euros), was reduced to 125 million (around 16.5 million Euros) at the end of June. Valamar has also postponed the completion of the construction of the Valamar Pinea Collection Resort in Poreč, the largest single investment in Croatian tourism, worth 790 million Kuna (104 million Euros).

In June and July, Valamar gradually opened 21 hotels and resorts and all 15 campsites in eight destinations along the Adriatic coast. There are currently over 30,000 guests in Valamar properties, which is a remarkable success given the challenges tourism still faces globally.