Stjepan Burum, owner of the DuBooker agency and the Fashion café, has been working in tourism and rentals for ten years, and gained experience at one of the world’s largest platforms, Booking.com. We spoke with him about what everyday work in this industry looks like, what the main challenges are, and how prices and guest expectations are changing.
Taxes, flat-rate fees, inflation…
When it comes to accommodation, especially apartments, the main topic is always prices, which have recently been discussed even more due to the announced new law on flat-rate taxation, according to which taxes per bed are expected to increase. Renters would therefore have no choice but to increase prices in order to keep up with new taxes, as well as inflation. However, despite the announced new law, Burum said that in their agency no one has stopped renting out properties, and he believes this should not play a major role in Dubrovnik due to the high quality of accommodation, and that only some individuals who do not achieve satisfactory turnover might switch to long-term rentals, as such apartments can be rented for 700 euros per month throughout the year.
— Most renters increased prices this year due to the announced new charges. I suggest a price to each renter, and it is up to them whether they follow it. Prices are not set in stone and we change them daily — if things are going well, we increase them, and if we see they are not, we lower them. On average, I would say most have raised prices by 10 percent, some have increased them by 20 percent, and some have kept them at the same level – Burum revealed, who personally believes that apartment prices in Dubrovnik are not high and that Split and Zagreb have become much more expensive than Dubrovnik.
We are accessible to everyone
As the main advantage of Dubrovnik, he highlights the different prices in the season and pre-season, which makes it accessible to everyone. For example, if someone comes in April, they will pay for quality accommodation significantly less than in the peak of the season.
— We manage properties where in April on Stradun you can sleep for 50 or 60 euros. I don’t think the media claims that prices are too high everywhere in the city are justified. You can get two or three bookings at some unrealistic price, but it is unrealistic for such accommodation to be fully booked throughout the entire season. Whoever raises the price too much will eventually lower it – Burum explains, who describes himself as a supporter of realistic pricing, and says that only when sales are going well should prices be increased. He points to inflation as the main “culprit” for high prices, as it has increased the cost of everything, including cleaning and maintenance services for apartments. They usually solve this issue by renting for slightly longer periods, while avoiding one- or two-night bookings, because in both cases cleaning has to be paid for, and the hourly rate is now quite high for it to be profitable to host guests for only one night. The exception, of course, is those who clean their apartments themselves.
— The difference between pre-season and season, depending on the type of accommodation, can be three to four times. So, if a night in pre-season is 50 euros somewhere, in season it can reach 150 euros, but all of this depends on the renter and the location. This is an example for a studio apartment for two people – Burum compared.
They also manage apartments outside Dubrovnik
The DuBooker agency currently lists around 170 accommodation units, covering different types of accommodation. Their portfolio includes only quality properties that do not necessarily have to be modernly designed or luxurious with a large number of stars, but they must have good reviews. Poorly equipped apartments in lower categories with weak reviews can bring a large number of problems, Burum says, who believes that too much focus and energy would then be directed toward solving these issues, which goes against the agency’s business plan, whose focus is quality and fast service.
— We manage properties with five stars, but also those with three. Apartments mostly have three stars on average. So there are villas and penthouses as well, but also mid-range accommodation. Although we are called DuBooker, we also manage apartments on Hvar, Pelješac, in Primošten, and some in Split – Burum told us, who highlights accessibility for all guest and owner inquiries as the main advantage of his agency, and for that reason he would not take on managing a huge number of properties without additional staff. With the technology we have, we are not limited to working only in our city. Our business model is adapted to both private and legal entities, which I would highlight as a great advantage due to a different and more favorable tax treatment – Burum explained. We were also interested in how they handle possible problems in this business, such as a broken air conditioner in the middle of summer, various guest requests, or damaged property.
— First, we agree on repairs with the owners, and if something cannot be resolved, we suggest a refund or relocation to another property, but these are really rare situations that often cannot be influenced. As for the agency itself and our work, we have not had any problems, only challenges that we have successfully overcome so far – Burum explained.
10 years in this business
—I have been in this business for ten years. I also worked for one of the largest agencies in Croatia, Direct Booker, as well as for the global leader Booking.com. There I gained huge experience in managing various types of accommodation, apartments, hostels and hotels. At Booking I was also an agency advisor, participated in various workshops and webinars, and in that way met many renters. I was motivated to start my own company by the market situation. I noticed there was space to create something that would offer a much higher quality service, and at the end of the 2023 season I founded my own company. Like any beginning, it was difficult – Burum explained to us. His agency handles most tasks instead of property owners, except cleaning and guest check-in, which is carried out through business partners when needed. Their work includes guest communication, sales management where they suggest prices to owners, and financial management, while Burum emphasizes that owners are only responsible for welcoming guests. Owners have access to a user interface and mobile application where they have all necessary reservation information, along with simple guest check-in by scanning an ID document.
If it were expensive, it wouldn’t be booked
Even Prime Minister of the Government Andrej Plenković could not refrain from commenting on prices, stating that Croatia is slowly losing its position as an affordable destination in which it has long been. He also said that analyses show tourism service prices are growing much faster than in Greece and Spain, and warned that caution is needed when setting prices. Burum believes that guests are still much more surprised by the price of other products than by accommodation.
— This summer when I would enter a store I saw foreigners returning items to the shelves because they could not believe how much something costs. We have guests who take more affordable accommodation and think they will additionally save money by cooking, but in the end they are unpleasantly surprised when they realize that it is not really a way to save money. In my opinion, prices of all apartments and attractions are justified, and I also believe that hospitality is not expensive, especially outside the city walls where you can find more affordable places, and tourists can only be negatively affected by inflation. I also think it is not good to make such public statements that will be reported by all global media, while most of us live from this. What can a person from another country conclude if they hear the Croatian Prime Minister saying that his country is expensive?! If it were expensive, it would not be full, and bookings are getting better every year — for our properties, reservation intake compared to the same day last year is about 65 percent higher – Burum expressed his opinion, and when comparing the numbers concludes that this season will be good. Running a hospitality business and a rental agency certainly does not leave much free time. In addition, Stjepan Burum is also a father of five children, and we were interested in how he manages to balance business and private obligations, especially during the season.
— The only downside of working during the season is that you cannot enjoy the summer, which is something special in our city. Friends who come here from Zagreb for a seven-day holiday enjoy it more than I do, even though I am here all summer, and as for time, I believe that with good organization (and a good wife haha) everything is possible – Stjepan Burum concluded.
