The fairy-tale walled city of Dubrovnik, the 1,000 sparkling Dalmatian Islands, and all the other tourist attractions of this surprisingly varied land brought in $1.1 billion last year. It was a welcome offset to Yugoslavia's large trade deficit.
Officials like Ivan Avzner, secretary-general of the Tourist Association of Yugoslavia, hope receipts will reach $1.5 billion this year and go on rising in the 1980s.
For a country with soaring inflation on top of prices already approaching Western European levels, this seems an optimistic hope. Yet neighboring Greece's tourist income last year was $1.7 billion, Italy's was $8.9 billion, and neighboring Austria's was $6.4 billion. Why shouldn't Yugoslavia's expand accordingly? It has beautiful seashores and mountains like those in Greece, Italy, and Austria.
Inducements to expanding tourism include the south European sun and sea along 380 miles of Adriatic shore; a taste of exotica in the 10th-century monasteries of Lake Ohrid or the 15th-century mosques of Sarajevo; easy accessibility by train, bus, and car; and an off-season slack in use of facilities that could be better exploited.
The restraints on expansion include the relentless inflation; full high-season bookings in many of the coastal hotels, with their 700,000 beds and campsites visited by an annual 10 million Yugoslavs and foreigners; a world economic recession that makes tourists count their dinars (the Yugoslav monetary unit); and a lack of those Western cultural monuments prominent in Italy and Greece.
Last year's 37 million overnights by 6.5 million foreign tourists was a 7 percent rise over 1979. Receipts rose 35 percent over the bad earthquake year of 1979, to $1.115 billion. Additional, unregistered receipts brought the total income to an estimated $2 billion.
For 1981, Mr. Avzner hopes Yugoslavia will attract 7 million foreign tourists with spending of $1.5 billion and unregistered spending of $500 million. An even more upbeat observer, Vinko Mir, who is assistant foreign trade secretary, thinks tourism can be doubled in a year. Reaching such targets depends largely on the West Germans, who constitute a hefty 33 percent of the country's foreign tourists.
Yugoslavia's hopes for attracting still more tourists focus on three areas: the Adriatic in the off season, the mountains in winter, and ''continental'' Yugoslavia year round. ''Continental'' Yugoslavia is the conspicuous stepchild in the trade, currently drawing only 15 percent of tourists.
As usual, sophisticated Dubrovnik leads the way in attracting off-season guests. Reduced hotel rates (so low that even some Dubrovnik residents move into hotels in winter rather than heat their own homes) have persuaded West German firms to contract for 15,000 winter tourists. A new convention center is scheduled to open next year. And despite all the construction, care is being taken to keep the new buildings well away from the picturesque walled city - and low and subdued enough so as not to spoil the coastline.
As for winter tourists, all hopes are pinned on the 1984 Sarajevo Olympics. The publicity should alert European skiers not only to the facilities available at Sarajevo, but also those in Serbia, the Slovenian Alps, and elsewhere. Tourist officials would be pleased if 1984 could mark a turn away from the current distribution of 58 percent of all foreign tourists arriving in July and August, 11 to 13 percent in June and September, and the remaining 30 percent in the other months of the year.
Expansion of facilities to accommodate the projected tourist growth between now and 1985, according to Mr. Avzner, should include construction of 80,000 new hotel beds - half on the coast, half inland. Current available beds of all sorts equal more than 1 million.
Tourist construction over the past two years has had to include rebuilding of four hotels destroyed in the 1979 earthquake in the southern Adriatic. The hotels are now finished, but they have 3,500 fewer beds than before; the number won't be made up before 1984 at the earliest.
Investment in hotel expansion presents some problems in a capital-short period. But it's easier to get approval and loans for projects that will eventually earn hard currency than for projects that won't. Firms that are building hotels must put up 30 percent of the investment themselves before they can raise the rest from loans or from unrelated firms (such as oil companies).