ECONOMY

Spa hotels across Greece may be closing shop

Part of the government?s cost-cutting efforts, the recent abolition of subsidized holiday programs run by IKA, the country?s largest social security fund, and the Workers? Welfare Organization (OEE) — which offered low-income Greeks year-round package deals for domestic destinations at highly discounted prices — will put an enormous strain on hotels and other forms of holiday accommodation across Greece, and especially those that rely on spa tourism, according to sector representatives.

Giorgos Politis, head of the Edipsos Hoteliers Association, which is based in northern Evia, said almost all of the hot spring resort town?s 110 hotels (5,000 beds) did business with subsidized holiday programs, and that 50 percent of them will be forced to shut down now that the program has been stopped.

According to Politis, ?people who cannot afford the hotels use the program in order to come here for treatment. These are mostly elderly people, but we also see younger visitors with various complaints.?

The number of visitors this winter season, according to Politis, was down by between 40 and 50 percent, even though the programs were still in effect, while he also estimates that a further drop in numbers will mean the closure of some hotels, which will, in turn, affect employment figures and businesses that have blossomed around spa tourism, such as restaurants, cafes, bars and commercial stores.

The weaknesses of Edipsos, according to Politis, are that it relies mostly on domestic tourism, the roads leading to the town are poor and ferry services are intermittent.

The head of the Federation of Rooms and Apartments for Rent on Evia, Costas Koukouvinos, also sees the future as bleak and estimates that units with five rooms or fewer will be forced to close down following the drop in arrivals that the abolition of the subsidized holidays program will bring.

?Because we specialize in healing baths, most of our customers are eligible for subsidized tourism through IKA and OEE,? said Miltiadis Iliopoulos, head of the Kamena Vourla Hoteliers Association, adding that almost all 55 hotels in the central Greek town are enrolled in the subsidized tourism program.

?We estimate that around 12 to 15 hotels will have to close down because of the abolition of the program,? said Iliopoulos.

In Loutraki and Aghious Theodorous on the coast of Corinth, there are 52 hotels, most of which — especially the cheaper ones — are part of the program, according to Dimitris Pappas, the chief representative of local hoteliers, who says that ?they will face serious survival problems if the subsidies are stopped.?

He added that many hotels have yet to be paid by IKA and OEE since last year, while many ?hotels near the new hydrotherapy center and in the center of the city have zero reservations and the owners are getting desperate.?

Hotel associations all across the country are protesting the abolition of subsidized holidays, while the Hellenic Chamber of Hotels has submitted a proposal on how to keep the programs running in an environment of free competition.