ECONOMY

Uncertainty keeping potential hotel investors away

Potential investors in the Greek hotel industry are currently taking a wait-and-see stance due to the prevailing feeling of uncertainty with regard to the local economy.

According to Andreas Andreadis, president of the Association of Greek Tourism Enterprises (SETE), while a number of hotels are currently up for sale, no major transactions have been recorded so far, with few exceptions.

For instance, while about 15 hotels of all categories have gone on the market in the broader region of Thessaloniki in the last two years, only one sale was made, at a particularly low price.

?At this point in time, it is predominantly Balkan and Russian investors who are showing an interest in the purchase of tourist accommodation,? noted Andreadis. This is also due to the fact that certain areas in northern Greece are no longer defined as high-security border zones where foreigners are not able to purchase property.

This summer season the local hotel industry managed to make up part of their financial losses incurred during the 2009-10 period.

Andreadis estimates that up to July, the rise in the turnover of local hotels nearly equaled that of tourism revenues – about 10 percent.

The SETE president predicts that the figures for August will show that the rise in turnover was lower than the equivalent rise in revenues from incoming tourism. He puts this down to the fact that hotels had lower revenues stemming from the local market in August.

Under the pressure of the economic crisis, some Greeks chose to forgo a vacation altogether, while others stayed with friends or relatives, and some stayed at hotels for a shorter period and spent less money at their destinations.

As a result, hotels which are more dependant on the domestic market faced greater problems.

Meanwhile, hotels operating in areas popular with foreign tourists saw an increase in turnover, a trend which was not the case at hotels in Athens and Thessaloniki, where losses reflected the shrinking of the professional tourism pie.

In northern Greece, a large percentage of the decrease was covered by tourists from Balkan countries, according to Andreadis.

This was the case for a number of seaside resorts stretching from Epirus to Thrace.

Andreadis?s prediction for this year is that Greece will show a record number of 16.5 million foreign tourist arrivals.

He estimates that the increase in the number of holidaymakers arriving in Greece by car will reach over 10 percent, higher than that of arrivals from abroad at the country?s principal airports.