The impact of private accommodation on economic development of tourist destination-the case of Dubrovnik-Neretva County

Private accommodation capacities are a growing segment of the lodging industry in Croatia. In private accommodation capacities 2,684 million tourists were registered in 2010, there were 19,4 million overnight stays, which makes 25% of total arrivals and 34% of total overnights. Although studies have been made on economic impact of tourism on a destination (at the national level), the issues of the impact of private accommodation haven't been given due attention. Consequently, the aim of this paper is to estimate the importance of private accommodation in development of tourist destination on regional level through consumption of tourists accommodated in private capacities, as well as to confirm that tourism receipts realised in private capacities have a positive impact on regional economic development.


Introduction
After a period of stagnation in tourism and downfall in international arrivals and revenue from tourism, caused by the global financial crisis and economic recession, the overall results for the year 2010 were positive.World tourism recovered faster and stronger than expected.International tourist arrivals in 2010 reached 940 million having grown by 6.6% percent over the previous year, whileas the revenue from tourism boosted and topped by 69 billion the revenue from the previous year which was 851 billion US dollars (UNWTO Tourism Highlights, 2011 Edition).
Worldwide tourism contributes to GDP some 5% and the contribution ranges from 2% in the countries where tourism does not represent a dominant development sector to over 10% in the countries where tourism plays the leading part in tourism development (UNWTO Tourism Highlights, 2011 Edition).
In Croatia tourism plays a vital role, both from the local and global perspective.It is one of the fastest growing sectors in economy and, having in mind it's impact on other economies, it is the vital instrument in development.Tourism is the invisible exporter and as such provides for foreign currency inflow into Croatian economy, influencing household revenues, employment rate and state revenues.Total revenue from tourism in Croatia in 2010 reached € 6.236,8 million, representing 13.5% of the Oeconomica Jadertina 1/2012.ISSN 1848-1035 36 total GDP (www.mint.hrvisited on 27.07.2011according to data from Croatian National Bank and National Bureau of Statistics).Should we take into consideration the indirect multiplicative effect of tourism, the total revenue from tourism is significantly larger (Pavlić et al., 2010).
The impact of tourism in tourist countries at the national level and it's share in the GDP have inspired many authors to write papers exploring the role of tourism in economic development.Narayan (2004) analysed the impact of tourism consumption on economic development of Fiji, and proved the positive contribution of tourism to GDP and the nation's prosperity and well-being.Most of the papers analyse the situation at the national level (Durbarry, 2004;Figini & Vici, 2010), and at the same time there are few papers considering regional aspects (Cortés-Jiménez, 2006), in particular from the differentiated accommodation capacities perspective (Valdés et al., 2007).Consequently, the aim of this paper is to indicate the importance of private accommodation (householdsrooms, flats, apartments, holiday villas, camping units and rural households) continuously being neglected in the Republic of Croatia in favour of collective accommodation facilities, and to emphasise the significant role and importance of consumption realised by tourists in such accommodation forms.The reason for neglecting the private accommodation should be found in perceiving the same through an exclusively social aspect, i.e. as a source of extra income for households (Petrić & Mimica, 2011).In an analysis of competitiveness of Croatia in the Mediterranean Pavlić (2007) proved that according to the proportional share in accommodation capacities Croatia has a better competitiveness position in the area of complementary accommodation in relation to the basic accommodation capacities, indicating thus the significance of complementary accommodation facilities among which are the accommodation facilities in private ownership.
This paper further aims to establish that realisation of overnight stays and tourism consumption in private accommodation facilities have a positive impact on economic development of other participants in tourism supply.

Literature review
The term private accommodation originates from private ownership.Bronzan (2003) states that a much more acceptable term for private accommodation is private hospitality, for the simple reason since accommodation as a neutral word indicates roof over your head while hospitality has a significantly wider meaning and delivers the message that a much more personal approach is being offered.Users of the services and products cannot be offered a sole physical supply component such as autochthonous buildings and meals, but, to the contrary, the visitors must be conveyed the emotions, the intensive feeling of joy, as well as activities characteristic for the relevant area (Šostar et al., 2009).Private accommodation in Croatia refers to accommodation units such as room, studio apartment, apartment, holiday villa and camp in private ownership, in which only accommodation is provided with a possibility of additional services such as breakfast, supper etc.Recently, the term private accommodation is quite often replaced with the term "B&B", the international synonym for "bed & breakfast", regardless the fact that in private accommodation in Croatia breakfast is not necessarily included.
The elements adding to significance of private accommodation for tourists and bringing forward the advantages are: innovations and flexibility, better and higher quality bond with users of such type of accommodation and the society as a whole, maintenance of better competitiveness of larger business subjects, high quality investments in employees, self-employment.Due to their size the holders of private accommodation supply adjust to the market changes simply and promptly, and as such they are much more flexible in relation to larger business subjects in tourism.In a prevailing number of cases the accommodation facilities are owned by a family controlling all aspects of the business, consequently, the presumed vision and mission are focused on providing a long-term existence.They are also the source of new ideas, materials, processes and services that large business subjects are Oeconomica Jadertina 1/2012.ISSN 1848-1035 unable to offer.They offer high quality service, authentic supply, and warm and friendly interaction with the client.The possibility of individual approach to guest results in better contact with users of their services, the so called marketing ''one to one'', which has been attracting much more guests lately than the price reductions.Friendly atmosphere and more data about a guest open the possibility for the guest to become a client and one-time visit to turn into repetitive visits.Emerick & Emerick (1994) had carried out a research through a period of six years by submitting questionnaires and collecting information from owners of private accommodation facilities, attendees of conferences on private accommodation and private accommodation travel agents.The results showed the degree of private accommodation occupancy of 45%, and repeated visits of 25%.Monty & Skidmore (2003) used the hedonic pricing method to prove that tourists are prepared to pay more for private accommodation with special, additional characteristics.Ingram (1996) interprets the importance of private accommodation and the quality of service being offered by taking into consideration the opinions and standpoints of owners of private accommodation facilities in order to obtain highest quality standardisation of private accommodation capacities.
Advantages of private accommodation supply for development of tourism in a destination are multiple (Portolan, 2010):  forms a link among other subjects in tourism supply within a destination (restaurants, rent-acar and rent-a-boat agencies, souvenir shops etc.).
The importance of private accommodation in exploitation of otherwise undeveloped rural regions was elaborated by Warnick & Klar (1991), who predicted that this form of accommodation with be expanded and turn into a serious business factor within the accommodation industry.
Kozak & Rimmington (1998) and Rogerson (2004) see the small entrepreneurs as the basis of economic 'health' of developed and undeveloped countries.Furthermore, they point out the importance of small entrepreneurs in tourism as creators of pleasure and positive image of a destination.
Smeral (1998) having realised the importance of small entrepreneurship considers the small and medium sized entrepreneurship in tourism will suffer the greatest consequences from globalisation and stresses the need to support small entrepreneurship in tourism as an important generator of employment and factor influencing the tourism demand.
Many theoreticians in tourism have been proving in their work the positive impact of tourism onto economic growth of the best-performing countries in tourism supply.Balaguer & Cantavell-Jorda (2000) analysed the situation in Spain and used statistical methods to prove that revenue from international tourism has a positive influence onto economic growth in Spain.They also ascertained the impact of tourism on the major part of tertiary sector and consumables sector.
Oeconomica Jadertina 1/2012.ISSN 1848-1035 38 Kim, Chen & Jang (2006) studied the case of Taiwan and proved that tourism and economic growth mutually support each other.Hazari & Ng (1993) analysed the impact of tourism consumption of product and services that are not traded to the benefit of local population.Lee & Chang (2008) used the relation between revenue from international tourism and GDP per capita to analyse the connection between tourism development and economic growth in OECD and non-OECD countries, and used statistical methods to prove the existence of the same.
All the stated authors, and many more (Zhou et al., 1997;Brau et al, 2003;Eugenio-Martin et al, 2003;Padure & Turtureanu, 2005;Sequeira & Nunes, 2008) analysed the impact of tourism on the economic growth of a country with special emphasis on the national macro level.
The consequences and results of globalisation have influenced the transport links between countries worldwide narrowing the role of tourism from national macro level onto regional and micro level of business subjects.For example, the Republic of Croatia does not compete with Spain and Italy in cruising tourism, but it is Dubrovnik that competes with Barcelona and Venice.Consequently, it is necessary to monitor the role of all individual forms of tourism in economic development of regions and cities.
Since one of the main features of tourism is ''on-the-spot export'' and since according to traditional national accounting the tourism consumption at destination in domestic economy is considered as export, this paper will consider it as such.In strategic planning of tourism supply (Mok & Iverson, 2000) it is of utmost importance to understand the model of consumption and tourist activities when visiting a destination.Divisekera (2009) analysed the economic perspective of consumer behaviour of foreign tourists and reached the conclusion that in future it would be necessary to carry out research of tourism consumption from a disaggregated level, such as accommodation and transportation.
Heterogeneity and elasticity of tourism demand have lead to creation of a large number of differentiated forms of tourism.Regional tourist destinations therefore cannot allow the existence of a unique positioning strategy for all market segments.Analysis of tourism consumption gives an insight into structure of the same, and possibilities are opened to form concrete, strictly targeted positioning strategies (according to Woodside & Dubelaar, 2002).
Consequently, by continuous monitoring consumption in private accommodation it is possible, by a strictly targeted positioning strategy, to realise an increase in the number of arrivals and overnight stays in this complementary form of accommodation and thus significantly influence the economic growth in a destination.
In Oeconomica Jadertina 1/2012.ISSN 1848-1035 39 is not adequate due to a large number of unregistered private accommodation capacities and unregistered tourists staying in them, resulting in a higher percentage of grey economy as adequate efforts are being made to diminish or eliminate it, both on the national and regional level, by imposing flat-rate tax and sojourn tax.
Private accommodation was registered in Dubrovnik as early as the 14 th century when private owners accommodated foreigners in their houses with ready beds for them.In the 16 th century this form of accommodation absolutely prevailed and the authorities in Dubrovnik took special care to monitor these private accommodation premises making sure, under severe penalties, that nothing immoral was going on there (Šubić, 2008).
According to a research carried out by the Croatian Institute for Tourism (TOMAS -Summer Survey 2010) the average consumption of tourists staying in the Dubrovnik -Neretva County private accommodation facilities is € 56.37, which means that a revenue in the amount of € 8.730.746 is realised in private accommodation making 19.8% of total revenue.Every temporary visitor spending available funds earned outside the tourist receptive region on the tourism supply products and services instigates a series of inter-related economic activities and interactions (Kesar in Čavlek et al., 2011).Therefore, if an indirect multiplicative effect created by instigating economic activities is added to the revenue realised in private accommodation the amount will be significantly increased.The Table shows that tourists staying in private accommodation have larger expenditures outside accommodation facilities in comparison with hotel guests, influencing thus to a greater extent the economic growth of other subjects in tourism supply (restaurants, shops, museums, tourist agencies etc.).

Data and methodology
In order to determine the importance of private accommodation and positive impact of tourism receipts realised in it on regional economic development, primary data was collected and compiled alongside the collection of secondary data.Empirical research was carried out using a sample survey taken from among 550 randomly-chosen tourists (only foreign) that stayed in the Dubrovnik-Neretva County.The research was carried out from April 1 st to October 1 st , 2009 and from June 1 st to September 1 st , 2010.In total, 700 questionnaires were distributed out of which 551 were valid.
A semi-structured questionnaire, including 20 questions, was used.The first group of questions collected data on the socio-demographic profile of tourists.Second group of questions dealt with travel characteristics.The third group of questions was regarding the stay in the destination and motivation, while the fourth group of questions was about tourist expenditures (structure, average daily and trip expenditure and share of expenditures for different services).The data obtained from the survey were analysed using different analytical tools, including methods of analysis and synthesis, inductive and deductive methods, method of generalisation and specialisation, and different statistical methods.As dependent variable was measured on ordinal scale Kruskal-Wallis test was used.All statistical analyses were made using an SPSS package version 17.0.
The goals of the research aimed to prove or reject the following hypotheses: H1: Tourists using private accommodation have a higher total consumption in destination than those staying in camps and in tourist settlements H2: Tourists staying in private accommodation have a higher daily consumption than those using camps and tourist settlements H3: Tourists using private accommodation in destination spend more money on food than those staying in other types of accommodation facilities.

Results
The results of the descriptive statistical analysis of the questionnaire indicate that 30% of the respondents used private accommodation as type of accommodation, equally male and female.70% of respondents who used private tourist accommodation were in age group between 15 and 40.The education structure showed that 82.2% of respondents completed high school and higher education, which indicated that a large proportion of private accommodation users were well educated.There was an equal number of respondents using private accommodation who flew to the destination (36.8%).
The respondents arriving to the destination by car attributed to a significant cash flow into the local cash office through purchased parking tickets, and those who flew to the destination used rent-a-car agency services and local transportation.Thus, the significant role of private accommodation in the economic growth of the destination is confirmed.80% of users of private accommodation arrived in their own arrangement, and 20% of them used travel agency services.Tourists staying in private accommodation mostly stayed between one and seven days (45.4%) of respondents stayed in the destination between one and three days, 31.9% between four and seven days), but there was a high percentage of those who stayed in the destination between eight and 11 days (16%).Users of private accommodation when choosing destination and accommodation facilities most often use the information recommended by relatives and friends (43.6%) and by Internet (23.9%).In the accommodation facility in most cases they use only the overnight stay services (57.7%) and sometimes breakfast (30.7%).Taking into consideration that they only spend the night in the accommodation facility, they buy food and beverage in local shops and prepare and consume them in Oeconomica Jadertina 1/2012.ISSN 1848-1035 41 the unit or use restaurant, coffee shop, fast-food, pizzeria or similar services.This additionally confirms the hypothesis on positive economic impact of private accommodation on other subjects in tourism supply at the destination.
Total consumption of the largest number of respondents using private accommodation were between € 601 and 1.500 (80%), and 59% of them spent between € 31 and 100.
The tables below show results obtained using the Kruskal-Wallis test.
H1: Tourists using private accommodation have a higher total consumption in destination than those staying in camps and in tourist settlements.-Chi-Square = 51,835 -Df = 3 -Asymp.Sig.= ,000 p=0,000 which is lower than 0,005 and shows that there is statistically significant difference in total consumption between tourists who used different types of accommodation.Those tourists who stayed in hotels spent the most.The applied method shows that tourist who used private accommodation spent more than those who stayed in camps and tourist settlements, which indicated that H1 is accepted.
H2: Tourists staying in private accommodation have a higher daily consumption than those using camps and tourist settlements Oeconomica Jadertina 1/2012.ISSN 1848-1035 42 p=0,000 which is lower than 0,005 and shows that there is statistically significant difference in daily consumption between tourists who used different type of accommodation.Those tourists who stayed in hotels spent the most during the day.The applied method shows that tourist who used private accommodation spent more than those who stayed in camps and tourist settlements, which indicated that H2 is accepted.
H3: Tourist using private accommodation in destination spend more money on food than those staying in other type of accommodation facilities.p=0,000 which is lower than 0,005 and shows that there is statistically significant difference in percent of food consumption between tourists who used different type of accommodation.The applied method shows that those tourists who stayed in private accommodations spent more on food that those who used other type of accommodation, which indicated that H3 is accepted.

Conclusion
According to the research carried out, the conclusion can be reached that private accommodation as secondary type of accommodation can not be neglected.The amount of expenditures realised in private accommodation closely follows those in hotel accommodation.Taking into consideration that hotels in the Republic of Croatia are mostly in foreign ownership and the income realised in this form of accommodation is mostly withdrawn from Croatia, the importance of private accommodation is even bigger.Total consumption realised by users of private accommodation is regional, influencing through direct, indirect and induced effects the economic growth of a destination.The direct impact of consumption of users of private tourist accommodation is the income earned by owners of accommodation facilities.The indirect impact is covering of raw material supply costs, half-products, products and services, while the induced impact is increase of purchasing power of resident population.
This research proved the importance and large role of private tourist accommodation as complementary, secondary form of accommodation and the positive impact of consumption realised within it (accommodation, food and beverages, various tourist services) on the economic development of a destination as a whole.Consequently, further research work is necessary in the form of methodology of forming accommodation prices in private accommodation facilities.

References:
Balaguer, J., Cantavella-Jorda, M., (2000), Tourism as long-run economic growth factor: The Spanish Case, Instituto Valenciano de Investigaciones Economicas, June 2000, V-2576-2000 enables rather fast and simple valorisation of otherwise undeveloped regions  extends the existing supply in already developed destinations  assists in preservation of urban and rural centres  increases the employment rate  stops depopulation  has a positive influence on economic development of other subjects in hospitality services, and the Republic of Croatia in 2009 55% of the total number of beds was in collective accommodation facilities, and 45% in private accommodation facilities (situation on 31 August, 2009 The National Bureau of Statistics www.dzs.hr,01.09.2011).During the same year in hotels and similar accommodation facilities 33% of the total number of overnight stays was realised, and in private accommodation 33.4% of total overnight stays.In 2009 in comparison with the previous year the number of overnights in hotels and similar accommodation facilities decreased while in private accommodation capacities (rooms, apartments, holiday villas, camps and rural households) a growth in the number of overnight stays was recorded.
Commerce according to data from the Croatian Bureau of Statistics), but the hotels realised 58% (2.652.954overnights) from the total number of overnight stays while the private accommodation realised only 32% (1.432.158overnights) which indicates the extreme seasonality in private accommodation.The indicator of the number of arrivals and overnight stays in private accommodation

Table 1
Average daily expenditure of tourists in Dubrovnik-Neretva County according to type of accommodation (TOMAS -Summer Survey 2010)

Table 2
Correlation between total consumption in destination and type of accommodation

Table 3
Correlation between daily consumption in destination and type of accommodation

Table 4
Correlation between expenditures on food (in %) in destination and type of accommodation