See, you are talking about sea clearness, nature etc - you are looking at it as someone looking for a holiday home. Investors are looking at ROI, timeliness, risk, exit routes, finance, hassle etc.

To give you an example: I brought 3 people from City investment fund from London with me to Croatia (Istria) last January. After only 4 days there, they were so impressed that they all booked their holidays in Croatia for this summer, but none of them put their money down because the numbers didn't stuck up. As simple as that. So they will put their money in Romania where you probably wouldn't even dream of going for a holiday, but will come to Croatia to enjoy its beauty. And current government policies and laws will not allow you to make any money from that tourism.

You are right that there is not sufficient promotion for Croatia - that's another example of incompetent government.

Here are my comments to the rest of your post:

2. Government planning laws are not very favourable for developers. this also is partly true but also depends from place to place, case to case

Well, the laws are same across the board. The only difference can be how competent are the staff at each planing office. But whole Croatia has T1 and T2 zones that killed all the investment potential. How will investors make money if they can give land tittles?

3. Bureaucracy is a killer -also yes, but also changing and getting simpler

I have to disagree. Yes, they brought outline planing law for buildings under 400m2, but at the same time they said that any building plot in 'neizgradjenom djelu gradjevnog podrucja" requires UPU urbanistic planning. Total mess! There are only 13 offices in whole of Croatia that can do that. EVERY single 'yellow building zone' requires that planning. How on earth will that work out? But thats not all. Local council is meant to finance that planing. However, since they are skinned, they will not do it. So, if you have a land in that area and want to be able to apply for planning permit, you will need to finance it your self. But not only for your plot, but for the whole area. Lovely. There goes your profit margin.

So much about things getting simpler.

4. Your net rental returns will struggle to pay your mortgage (if you can get it as non-resident) - also depending really on location, but I agree, is hard to find profitable system if investment is full mortgage

We are talking 70%LTV mortgage. You could perhaps do it in Zagreb, but it will still be hard. As a foreigner, you are left only with Hypo-adria bank rates, which is not much of a choice. But then you also need to consider the lack of professional letting agencies and property management solutions, unfriendly tax laws for buy-to-let - hardly worth your hassle.

On the coast, you have season of 3 months. No golf courses, no other facilities besides beaches. Its hard to break even with only 90 days average occupancy.
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To give you an example, you can buy land in Provence for 80eur sqm (great location), it will take you around 2-3 weeks to get planing.
In Croatia, you will struggle to find land for that price at equal location, and you will need around 2 years minimum to get your planning, if you are really lucky.
I heard of such delays many time, but also lately can be done in few months, I managed in 2 months, not on seaside but still...

Presently, if your plot is in the area that needs UPU, you are stuck. No one knows what to do. If you go to the planning office, they are clueless. You will be lucky to get planing in 2 years now.

With hotels, its very tricky. That can work out only as a small family business, and you will struggle to bring a big operator to run a hotel with less than 100 keys. If you bought a building, renovated it, whom will you sell it to for significant profit to make it worthwhile? There is no exit route.
small family business facility I had in mind, as Croatian goverment is financing part of the investment and giving programmed financing support/credit as still more than few hundreds small hotels are needed on the Croatian coast. Your remark of no exit route can still be true but, but if there is market for booking small hotels, should be a market to sell it also.

Another example of governments incompetence. It will be very hard to make the effort worthwhile with 3 months of season. If you could get the golf courses and other facilities, then it would make sense. But look at the golf situation - Ladic is working on Merlera for almost 10 yrs, and still no permit. There isn't a single golf course that has final planing permit till this date (unless something changed very recently). According to data from Ministry of Tourism, to design a golf course in Croatia it will cost you 2-3 times more than anywhere else in Europe. And the authorities will make it 3 times more complicated than anywhere else.

We need to ask ourselves why there are no big hotel brands in Croatia. Why are they not interested? And than I was just discussing yesterday with a friend of mine who is a hotel operator about Iraq. There is a huge hype about Kurdistan part of Iraq. So many big hotel names are fighting to get in. Iraq vs Croatia? Obviously something wrong, eh?

To conclude, I can sympathise with you. I was in exactly same mind frame till 6 months ago when I realised all of this. It all looks great till you start doing feasibility studies and see that numbers just dont stuck up. I invested a lot of my time and energy over last two years trying to package investment deals all the way up to 600m eur worth. Now I'm looking to fine a nice place for me and my family to go for holiday, but I go elsewhere to make money.

Anyway, nice to meet someone from Croatia here. Keep in touch mate.