One of the basic flaws of the tourist economy in Yugoslavia before the second world war was the fact that it was hardly profitable. This resulted in scarcity of investments in tourist enterprises falling very much short of actual needs. Insofar as funds were put aside for tourist investments, they were generally low and spread over a large number of units and used without any system at all. New tourist buildings did not fit into a broader plan, while residential areas only slowly developed into places with tourist interests. In this spontaneous growth many irrational relationships emerged between various branches, e. g. there was a relatively too fast development of catering industry with the communications and public amenities lagging behind. The result of unsystematic growth of tourist places, especially the result of a very low rate of profit derived from tourism before the war, was already at that time a high degree of wear and tear of fixed assets accompanied by a strong need of further investments.
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