Drop in domestic tourism hurts hotel revenues

Hotel revenues have shown a decrease of about 23 percent over the last five years, according to data released on Wednesday by the head of the Panhellenic Hoteliers Association, Yiannis Retsos.

The rate of the decline is identical to that observed in domestic arrivals at the country’s airports over the last four years, which illustrates how much domestic tourism has shrunk. In contrast, arrivals from abroad during the same period have actually increased by 2.5 percent. The number of available rooms has declined by 12.1 percent in the least five years, data showed, mainly due to hotels opting to stay open for fewer months in a bid to cut losses.

For this year, Retsos said that he believed the targeted record figure of 17 million tourism arrivals from abroad is attainable. Last year ended with a decline of less than 3 percent, as the arrivals inflow improved significantly in the latter half of 2012.

On the draft law currently being prepared by the Tourism Ministry, Retsos said it is in the right direction, noting that it is trying to offer solutions in entrepreneurship, introduce new forms of tourism investment such as condo hotels etc.

He also branded as a “significant development” the fact that the Association of Hellenic Tourism Enterprises (SETE) has been recognized as an equal social partner and stressed that tourism is the most dynamic and rapidly expanding sector in the Greek economy, which has contracted by 25 percent in the last five years.

“Tourism consists of enterprises that cannot run away from the problems of a problematic and constantly shrinking economy, with a reduction in consumption, excessive taxation, inflation that is disproportionate to the recession and a bankrupt credit system that renders funding extremely expensive or impossible,” said Retsos.

He went on to state that for the country to make the most of the potential of the tourism sector in the medium to long term, it will have to immediately apply policies that will keep enterprises operating, stop the decline in employment and then lay the groundwork for an increase in the number of tourism jobs in the future.

The president of the Hoteliers Association underscored that tourism enterprises have loan obligations that add up to 7.5 billion euros, but tourism receipts on an annual basis amount to 10 billion euros. In this context, he has asked the Finance Ministry for the doubling of the repayment time for the sector’s corporate loans, the majority of which are medium-term ones.

He also cited a study by hotel associations in northern Greece which concluded that after the increase in the price of heating oil, their energy costs now amount to 35 percent, thereby exceeding salary costs in their list of expenses. The Panhellenic Hoteliers Association has requested that the issue be dealt with centrally, stating that the imposition of a higher tax on heating oil has not brought in the expected revenues. He also noted the commitment by Prime Minister Antonis Samaras for the reduction of value-added tax in food catering once the state budget posts a primary surplus.

Meanwhile the Municipality of Santorini announced on Wednesday that 2013 will be the Year of Gastronomy on the popular Aegean island, in a bid to capitalize on the fact that it is located among some of the top gastronomic holiday destinations. The initiative was presented yesterday during an event at the Acropolis Museum in Athens.