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Can Game of Thrones Save Croatia?

Recession has been a dagger for the Balkan nation, but a blockbuster HBO show filmed there has helped keep tourism dollars flowing.

More than two decades after Serbian-Montenegrin forces shelled Dubrovnik’s medieval ramparts, the sounds of battle are once again rumbling within its storied walls. Only this time, they’re welcome. 

The red-roofed city on Croatia’s southern coast, Bloomberg Markets reports in its May 2015 issue, is drawing new visitors as a filming site of HBO’s Game of Thrones. The hit show, based on George R.R. Martin’s fantasy series A Song of Ice and Fire, has gained legions of fans for its intricate story, power-obsessed characters, and gratuitous nudity. The fifth season, which was also shot in Spain and Northern Ireland, was set to premiere on April 12 in more than 170 countries.

Daenerys Targaryen (played by Emilia Clarke) is one of the most popular characters in Game of Thrones.
Daenerys Targaryen (played by Emilia Clarke) is one of the most popular characters in Game of Thrones.
Macall B. Polay/HBO

Dubrovnik, already Croatia’s top tourist destination, plays the part of King’s Landing, a city teeming with the Machiavellian Lannisters. The production has provided thousands of jobs to extras, support crew, and businesses riding the surge in tourism. “I hope that Game of Thrones will do for Dubrovnik what the Lord of the Rings films did for New Zealand,” says Andro Vlahusic, the city’s mayor.

That would be a boon for both Croatia and its investors. The country of 4.2 million, which was the 11th-most-promising frontier market in Bloomberg Marketsannual ranking, joined the European Union in 2013 hoping to boost a living standard that’s 61 percent of the bloc’s average. But with the economy having plunged 12 percent in a recession that has lasted since 2009—the EU’s third-biggest contraction, after Greece and Cyprus—it’s needed all the help it can get. Buoyed by a bond rally across the Continent, the country’s five-year debt is still yielding 3 percent, the EU’s third-highest level, again behind Cyprus and Greece.

Tourism is crucial to Croatia’s economy, making up about a sixth of output, and the country boasts the third-highest number of foreign visitors per capita in the EU. Foreign tourism arrivals rose 6 percent in 2014 to about 13 million. In Dubrovnik, along with other Game of Thrones filming sites such as Split and Sibenik, where Roman-era ruins dot the Dalmatian coast, the series is making a difference. “Dubrovnik’s tourism in recent years is growing at 10 percent a year, and I think Game of Thrones is responsible for about half that growth,” Vlahusic says. While he says the show is adding $10 million a year to Dubrovnik’s tourism revenue, it’s the buzz that the show is creating that Vlahusic and his countrymen hope can help raise the nation’s international appeal. Indeed, while the show’s producers have only spent $14 million shooting in Croatia, Dubrovnik has already attracted other film projects, not to mention a planned Game of Thrones theme park.

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With the Croatian currency, the kuna, having weakened 10 percent against the dollar this year through March 20, foreign tourists can snap up bargains. Three-hour tours take visitors through the sets of King’s Landing in Old Town Dubrovnik, including a walk on the walls overlooking the site of the Battle of the Blackwater. Enterprising tourists also stroll to the abandoned Hotel Belvedere, where a graphic fight scene between the Mountain and the Red Viper of Dorne was filmed.

For Croatians such as Gina Pecotic, an extra who’s played a peasant as well as a noblewoman, the show has been both a fun ride and a reason to hope the country can emerge from its recession. “When they asked me to come for a costume rehearsal, I quit my job and told myself, ‘Girl, now it’s your time to have fun,’” Pecotic says. “This series has energized Dubrovnik, and it’s great fun and a privilege to be part of it.”

This story appears in the May 2015 issue of Bloomberg Markets.

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