Federation of Hoteliers President: Greek Hotel Profits Under Pressure

(Photo by Eurokinissi/Yorgos Kontarinis)

Demand for Greek tourism product, estimates for economic growth in European countries, ‘tourist tanks’ for Greece, climate change, and the future of short-term leases (Airbnb) in line with the rules of operation of online booking platforms (Booking), are determine factors for the profitability of hotel companies in 2019 and 2020.

As the president of the Panhellenic Federation of Hoteliers Gregory Tassios explained to Athens-Macedonian News Agency, this year is already running at a 10% to 15% drop in overnight stay rates across all regions, undermining this year’s revenue effect. Despite the positive signs of September and October, the year is lost in revenue. Mr. Tassios emphasized that prices and contracts with international tour operators are already 20% lower than in 2018. At the same time, the sustainability rate is pushing the hotel business more because of high insurance contributions, but also the current situation in the banking system which does not favour the rationalisation of the obligations of hotel companies.

Against this background, Mr. Tassios said, hotel companies will be at a disadvantage in negotiating with tour operators for the 2020 season, as international tourist agents will not increase their contracts and Greek businesses will remain stuck at -20% in 2019 compared to 2018. The positive in these first signs for bookings in the year 2020 are the advance payments given to Greek hoteliers, which essentially help to meet their obligations, he said.

The behaviour of the English market due to Brexit procedures remains unknown for the new year, according to Mr Tassios, who noted that from October 2019 to February 2020 this market will be out of reservations. It is noteworthy that by September 30, English tour operators are making great efforts to secure bookings promising a money back guarantee. As Mr. Tassios explains, hoteliers are essentially in the midst of slums. On the one hand the unregulated environment of short-term leasing and on the other there is a big issue with commissioning in Booking.

“Booking puts conditions that can no longer be tolerated. Especially in the way of pricing of hotels. Booking fees from hotels cannot be at a fair price, “Mr. Tassios said. After noting that Booking has helped highlight Greek destinations and put the booking of hotels and rooms on the map, he said that Greek hoteliers will try to rationalize the existing situation in the supply side. Lastly, on the question of whether the existing Greek tourism product can generate more revenue with less arrivals, Mr Tassios pointed out that this cannot be achieved at this time. “It takes at least a five-year period for that to happen”.