Guy Norton in Zagreb -

A recent television advertising campaign bills Croatia as "The new tourism star of the European Union." And blessed with a sun-drenched climate and stunning coastline, Croatia increasingly ranks among the go-to destinations for growing numbers of travellers from around the globe. But it's also fair to say that while tourism is a key revenue earner for Croatia, bringing in at least €6bn a year or the equivalent of 14% of GDP, the industry remains a plentiful source of controversy, with the future vision of tourism a hotly disputed topic among the local population.

How the country best leverages its undisputed potential has become a matter of increasingly fierce discussion of late, as various factions within the country contest how best to attract free-spending tourists without destroying the country's deeply-cherished natural and cultural heritage.

For example, the island of Pag located in the south of the country off its Dalmatian coast, whose Zrce beach parties and festivals near the town of Novalja have earned it the moniker of the "New Ibiza", was recently the scene of a conference which debated the pros and cons of the annual invasion of hordes of nightclubbers from around the globe. While events such as the Hideout Festival have attracted widespread critical acclaim abroad, with UK daily The Guardian naming it among the best of the European festivals in 2011, there's been a growing groundswell of domestic opinion on the island that sees such events as a curse rather than a blessing.

Local politicians recently convened a public forum entitled, "Novalja and Zrće two worlds - one future," where they debated the questionable merits of the island's party tourism. According to Boris Å uljić, a local councillor, Pag's party scene may benefit international DJs such as Armin van Buren who can command as much as €50,000 a night's performance, but the financial payback for the island from the hordes of clubbers that descend on Pag each year are more questionable, as the island's growing reputation for drug and drink-fuelled debauchery is destroying Pag's formerly family-oriented tourism trade. "They [clubbers] require kebab stalls, not restaurants; tents and not apartments," Å uljić told local daily Slobodna Dalmacija.

Ironically, 20 years ago Å uljić opened the Calypso nightclub that is widely credited with propelling Pag towards party fame and resulting in the fact that the small town of Novalja, which has just 3,700 permanent residents, now boasts over 10,500 apartments. However, the noise and disturbance from landmark clubs such as Papaya and Aquarius is blamed for the fact that apartment rental levels in Pag, even in high season, can be as low as €7 per person as famously socially conservative Croatian families now shy away from the island, whose former claims to fame rested principally on it being the source for PaÅ¡ki Sir, a hard, salty ewes' milk cheese, and PaÅ¡ka čipka, a traditional form of lacework.

Rental levels in Pag are now a fraction of the price commanded in high culture-focused tourist destinations in Croatia such as Dubrovnik, whose chief tourist adviser Pave Zupan Ruskovic was sacked in January by the city's mayor, Andro Vlahusic, for speaking out about "drunken Kiwi and Aussie tourists walking naked down Stradun [Dubrovnik's central pedestrian thoroughfare]."

Dubrovnik's reputation for stunning renaissance architecture combined with classical music concerts and theatrical festivals means that it appeals to an older, more affluent target audience than Pag. However, a planned €1bn golf development overlooking the city, which is clearly targeted at cash-rich audience, has provoked fierce resistance from Dubrovnik residents who claim that it will enrich foreign investors, but not the local populace.

Developmental pains

Meanwhile, in the northern coastal of region of Istrian there's an equally tempestuous debate raging over the development of a series of mega-resorts as part of the so-called Brijuni Riviera project. No sooner had Croatian tycoon Danko Koncar been awarded a 50-year concession to construct a major hotel and marina complex at Sveta Katarina-Monumenti, which is forecast to involve an investment of at least HRK225m (€30m), than the culture ministry promptly announced that there was an outstanding protection order on part of the site, which if fully enforced would require a major rethink of the proposed development.

In response, Ivan Jakovcic, prefect of the Istria region and head of the IDS political party, which is a junior party in the current centre-left coalition government, called for heads to roll at the culture ministry run by Andrea Zlatar-Violic, a member of the HNS party, a fellow coalition partner. Jakovcic believes that self-serving bureaucrats at the culture ministry risk torpedoing a project he has championed for over a decade. "Such behaviour undermines the reputation of Croatia and requires urgent measures and severe sanctions," he told regional daily Glas Istre.

Furthermore, Jakovcic called on investors not to participate in tenders for other tourist concessions in Istria at Hidrobaza in Pula and Pineta in Fazana, because he couldn't guarantee them legal and investment security "until all dubious relations in the relevant ministries have been cleared up."

Koncar's spokesman, Goran Veljović, told Croatian daily Vecernji List that his boss might review his participation in the Sveta Katarina-Monumenti project. "We will not give up if the project can be realised. But if the new rules produce financial losses for us, we will abandon the project."

Yet another disgruntled investor, Croatian property developer Pelagius, has appealed in an open letter to the government to intercede on its behalf with regard to its proposed HRK700m golf course and 200-bed hotel development in Istria, which has been on hold for six years because of demands from the culture ministry. The company claims it has met these demands in full, but even so it's unlikely to receive the go-ahead for its project from the local town of Umag before the end of 2013. Pelagius director Ljubica Marfan claims that bureaucratic intransigence is depriving at least a 100 local people of a job at a time of increasing unemployment in Croatia.