Two sides to tourism in 2023
Large hotels expect brisk trade, while smaller ones may face same struggles as this year
The prospects for tourism in Greece in 2023 based on the first booking data from major and minor hotel groups, as well as surveys of Europeans’ intentions regarding travel in an environment of inflation and energy insecurity, are showing a two-sided picture. In any case, however, Greece remains among the top five choices of Europeans for next year as well.
The large Greek hotel chains that target higher incomes are already aware of increased demand for summer 2023, even more so than the same time in 2019 – i.e. before the outbreak of the pandemic. In fact, demand for these luxury complexes, most of which offer upgraded infrastructure and services, is so strong that some hotel managers are opting to keep an increased share of their capacity free in order to maintain their ability to make it available at even higher rates, and not through packages.
“That decision is taken after this year’s experience, which showed that those who adopted such tactics managed to get much higher prices as the summer approached. In contrast, some four- and mainly three-star hotels, and even more those of a lower category, are facing serious problems in negotiations, both in terms of prices and the number of rooms they can make available,” market sources report to Kathimerini.
That is due to the fact that pressures on the disposable income of middle and lower income travelers across Europe from inflation and, potentially, heating costs are eroding the demand of this market at both the levels of holiday duration and travel budget. But the pressures on these Greek businesses of lower capacity and hotel category translate into much greater pressure on their gross profit margins, which may now also move to loss-making levels. That picture is not much different from that of this year, which showed the high end of the market posting record performances, in contrast to a large number of lower-end properties. Greek tourism sources say these trends are leading to further concentration in the sector, since large groups can find a window for acquisitions, while smaller companies are trying to avoid losses.
