Croatia and Adriatic Luxury Hotels Grow Side by Side

by James Ruggia
Last updated: 9:12 AM ET, Fri February 28, 2014

PHOTO: The Villa Orsula is a member of ALH's Dream Collection. All photos courtesy of ALH.

It was not all that long ago, from 1991 to 1995, that Dubrovnik was being mercilessly pounded by the artillery of the former Yugoslavia. Today things are quite different as the country is setting records for tourism. Adriatic Luxury Hotels (ALH), owned by the Luksic Group, was a major player in that resurgence. Today the group operates 12 hotels in southern Croatia under three branded collections: Dream Collection, Escape Collection (both five stars) and the three-star Unwind Collection. Through the ALH [www.adriaticluxuryhotels.com] division, the Luksic Group was able to stand by Croatia when things were at their worst, investing in growing hotels even when the country was still under attack.

Now things are looking up for both Croatia and ALH. Croatia attracted a record 10.3 million travelers in 2013 with some 295,000 of them from North America. Foreign tourism revenue for Croatia in the first nine months of 2013 added up to €6.59 billion, up 4.7 percent from the corresponding period in 2013 according to the Croatian National Bank. Business Monitor International (BMI) attributes the growth mostly to an economic turnaround in the destination's important short-haul European markets. By 2017 BMI expects total arrivals to reach 13.3 million.

The medieval beauty of Varazdin made the town number 48 on this year's New York Times list of Best Places. An hour north of Zagreb, the town features a nicely preserved Old Town with fine Baroque churches and palaces. The wonders of Croatia were also cited by travel agents as a survey of nearly 200 American Express Travel Counselors (www. amextravel.com) named Croatia as one of 2014's hottest destinations.

PHOTO: The rebirth of the Dubrovnik Palace was a turning point for Croatian tourism.

Ironically, the sight of Dubrovnik's ancient walls being shelled caught the world's attention and probably led, after the war, to Croatia's emergence as a major tourism destination. "After the war, Dubrovnik had a profile, but we didn't have tourism professionals in place because our people had been absorbed in the military and other trades," said Zrinka Marinovic, the chain's event manager.

"When we reopened the Hotel Dubrovnik Palace (an ALH hotel) in 2004, Croatian tourism turned a corner. Not long after that British Airways began direct service and we started really rolling. But it was the sight of that hotel that gave BA the confidence to fly to Dubrovnik." The group has grown from two hotels to 12 in the last decade. The hotels range from the six-person Villa Agave that was once a summer home for famed archeologist Arthur Evans (of King Tut fame) to the palatial flagship Hotel Excelsior. All of ALH's hotels are located in existing buildings, they've built nothing. Dubrovnik and its surroundings are at the center of ALH's properties, though Marinovic says the company is now looking to grow into Zagreb and Split.

Dubrovnik dates back to the seventh century but reached its apogee as a midway port between maritime Venice and the Ottoman Empire. It was an independent city-state until Napoleon conquered it. It still remains Croatia's top destination and cruising amidst the more than 1,000 islands off the coast has become a major attraction, as has the capital of Zagreb and the villa-rich agro-touristic Istrian Peninsula.

Culturally Croatia sits at the seam separating the Slavic culture of the Balkans and the Latin Mediterranean culture. Geographically it borders Hungary to the northeast, Serbia to the east, Bosnia and Herzegovina to the southeast, Montenegro to the southeast, the Adriatic Sea to the southwest and Slovenia to the northwest. The Croatian government is investing heavily in hotels especially in emerging rural areas, with plans to add 60,000 beds by 2020. Croatia became the 28th member state of the European Union in 2013, but still uses its own currency, the Kuna.