Increase in Revenure for Croatia's Suncani Hvar

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. October 14, 2008

OCTOBER 2, 2006. Suncani Hvar has recorded a significant increase in operating revenues despite the reduced capacity due to the hotels' renovation.

For example hotel Adriatic which is closed for eight months, hotel Riva which opened on July 24 and hotel Amfora which has been open since May 31. 2006.

Although the August results for Croatia's tourism sector are down, Suncani Hvar Hotels have achieved a room revenue increase of 57% compared to August 2005.

It should be emphasized that this was in spite of a reduction of 11% capacity over the mentioned period for Suncani Hvar compared to last year.

The renovated hotel Riva opened its door in June 2006 and regardless of the soft period after the reconstruction, room revenue is three and half times higher than last year.

With an average room rate of 204 euros including breakfast, the occupancy rate in Riva reached a very good 90,1%. In total, 5.280 million euros was invested into the Riva reconstruction, which is more than 95 000 EUR per room.

The room revenue increase was achieved in other hotels with an average occupancy of 87.2% in August.

The importance of introducing new services and contents as well as investing in employees' education and effective management, made an obvious impact in the excellent results of the unrenovated hotels. H

otel Palace attained a room revenue increase of 70% compared to last year, with the capacity of 93.7% and an average daily rate of 108 EUR per room including breakfast.

Furthermore, revenues at hotels Delfin, Pharos and Dalmacija, as well as the renovated Amfora have significantly increased in season keeping the occupancy above 90%.

The forecast shows that at the end of the year, with the 17% less capacity, the total operating revenue will increase by about 20% compared to last year's results.

New investments have enabled new vacancies, therefore in August 2006, 242 more employees were hired compared to the same period last year, 65 of which have a full time contract. 111 new employees come from the island Hvar while just three are foreigners.

50 new full-time positions were created in the renovated hotels Amfora and Riva and another 51 in the newly-opened facilities such as the beach Bonj and the Amfora beach bar. Organizing management in accordance with the world standards brought to the reorganization and considerable increase of management positions whereby a part of the responsibilities and duties was transferred to the middle management.

The revenue increase has brought a remarkable salary growth for the employees without a management contract. In addition to the increase in the number of employees with a collective contract, the average salary in August 2006 rose by 45,5% compared to last year.

The adjustment to world salary standards has begun and will continue alongside the increase in the company's income and the service improvement.