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Legal regulations in the operations of travel agencies in Croatia
In the Republic of Croatia, travel agencies, hotel caterers, transport companies, tourist guides and others involved in tourist
activities operate in accordance with laws relating to the Croatian economy in general, as well as with regulations relating to
tourism and catering. They also operate in accordance with the Code of Practice on hotel/travel agency relations drawn up by the
Croatian Chamber of Economy in 1995. defining common practice in the hotel and travel industry. In their foreign operations,
travel agencies act in accordance with the Code of Practice on hotel/travel agency relations drawn up by the International Hotel
Association - IHA (now IH&RA) and the Universal Federation of Travel Agent's Associations - UFTAA, unless otherwise explicitly
agreed between the parties. Travel agencies and others providing tourist services, who are members of UHPA - Association of Croatian
Travel Agencies - also act in accordance with the regulations of UHPA Code of conduct on the protection of users and suppliers and
prevention of unfair competition and recognize the arbitration of UHPA in possible disputes with the clients.
The Law on Travel Related Activities, regulating the foundation
and operation of travel agencies, was passed on 8 February 1996. This law contains the EU Council's main directives on package travel,
package holidays and package tours, which means that foreign tour operators and their clients are similarly protected in Croatia as
in the EU countries which act in accordance with these directives.
Passing this law was necessary for various reasons. The change of political system in Croatia and the transition to market economy,
since 1990, in addition to the existing agencies (some of which were already privately owned, and some were in state ownership which
were transformed and privatised), has brought about hundreds of new agencies - tour operators and retailers. It was necessary to
define the rules for their business activities as well as on how to protect consumers and to implement EU guidelines on package
travel, both for Croatian and foreign clients.
In its first part, the Law on Travel Related Activities defines the tourist activities, services of travel agencies, their types
and conditions for providing those services, as well as procedure for establishing and the reasons for closing an agency.
Section 8 of the Law reads as follows: "Travel agency is a company, a sole trader or a craftsman who can provide services of a
travel agency in order to make profit subject to fulfilment of duly prescribed requirements by this Law".
By Croatian Laws, in order to establish a limited liability company (abbreviation "d. o. o." after the name) a minimum stock capital
of cca. 19,250.00 HRK is required. A stock capital of cca. 115,500.00 HRK is necessary to establish a joint stock company
(abbreviation "d. d." after the company name). Since the Company Law requires the firms to include the basic capital and the number
of their local currency and foreign currency accounts in their letterhead, and the Law on Travel Related Activities requires them to
include their ID code (as the licence number) on all their printed papers, the agency letterhead, for agency established as limited
liability or joint stock company, will show clearly the activity for which the company is registered.
By the type of service they provide, travel agencies are either tour operators or retailers identified by the
A or B code. Most Croatian travel agencies are registered as AB, i.e. tour operator and
retailer. The agencies select the category in which they will be registered. This registration must be recorded with the county
authorities. In any case, in the part of their activity which provides package holiday service, the travel agency must provide all
services to each and every client who has paid for the holiday, or compensate for the costs incurred in case the services were not
provided due to the agency bankruptcy. For that purpose the tour operator is obliged to provide a guarantee in the form of insurance
policy, cash deposit or bank guarantee for every package holiday. Another novelty in the Law is the prerequisite for establishing
a travel agency by which its manager should have passed a special examination as determined by special regulations, passed by
the Ministry of Tourism, now the Ministry of the Sea, Tourism, Transport and Development.
The Law also defines the compulsory contents of the program, prospectus or catalogue of the tour. The travel agency providing the
services of a package tour, excursion program or passenger transfer is obliged to use the means of transport in which the passengers
and their luggage are insured, and the catering facilities in which the service users are insured. Croatian travel agencies are
obliged to offer insurance against injuries, illness, death and loss of luggage to all their clients, both Croatian and foreign,
who buy package holidays and tours, during their travel and stay. They also have to offer health insurance to Croatian travellers
while travelling abroad and to foreigners travelling within Croatia or vacationing in Croatia if they have bought the package tour
or holiday directly from a Croatian tour operator. A package holiday is defined as a pre-arranged combination of at least two of
the following: accommodation, transport and other tourist services not ancillary to transport or accommodation but forming a
significant part of the package. They must be sold at an inclusive price for a stay of over 24 hours or include overnight accommodation.
The Law and special regulations also define minimum technical conditions of business premises for the agencies, their equipment and
the way of providing services of the agencies and the complaints book. The Ministry of Tourism has passed 11 different regulations,
which, among others, define technical and other conditions for agency registrations, the conditions for tourist guide registration
and registration of the agreement for tourist representative in Croatia, the program, and method of examinations for branch office
managers, for tourist guides and tourist escorts and animators. Three regulations have been passed relating to nautical tourism -
Regulation on tourist services provided in nautical tourism, Regulation on the classification and categories of harbours for
nautical tourism, and Regulation on types and categories of vessels for nautical tourism.
The Law defines services in nautical, rural and other forms of tourism, as well as other tourist services, inspection and penalty
provisions. The inspection is done by the state inspectors specialised for tourist and catering services, and their work is regulated
by the Law on the State Inspectorate passed in 1999.
Foreign tour operators and travel agencies can obtain further information on the provisions of the Law on Travel Related Activities
and its implementation regulations from the Ministry of the Sea, Tourism, Transport and Development, their partners in Croatia,
from UHPA - the national association of Croatian travel agencies, or from its counselling office.
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