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Analysis of FDI in the tourism sector: The case study of the Republic of Croatia

The structure of foreign direct investment worldwide has shifted towards services. In the context of this work it is necessary to emphasize that tourism is major service industry and it is a priority sector in an increasing number of developing countries’ economic strategies. Foreign direct investments are one possible source of funding of the tourism sector. FDI in tourism plays a quite important role in tourism sector of many developing countries. Tourism is believed to be the key impetus for the development of Croatian economy. According to EBRD, Croatia would benefit from efforts to increase FDI in particular in sectors, such as tourism, where consumers are willing to pay more for higher quality services and introduction of well known brands. With tourism accounting for more than 22% of Croatian GDP, upgrading and expanding the country’s infrastructure to support its holiday industry is of crucial importance. Due to lack of domestic capital, the Republic of Croatia needs foreign direct investment in tourism industry. Given the above, a central topic which will be addressed in this article is the analysis of FDI in the Croatian tourism sector and what to do to increase their inflows.

FDI; FDI in tourism sector; competitiveness

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