ECONOMY

2004 hospitality program gasping

The two officially approved consortiums involved in the provision of hospitality services during next year’s Olympic Games, Alpha Hospitality and Hellenic Hospitality, and a number of other bodies involved are reportedly making hard efforts to salvage the schemes formulated so far from collapsing, after a recent circular of the National Greek Tourism Organization (GNTO) on accommodation specifications exacerbated an already complicated situation. The two official consortiums, led by Alpha Bank and EFG Eurobank respectively, beyond the very significant amounts they spent on letters of guarantee (3.2 million euros) in order to win the approval of the Athens 2004 organizers, subsequently saw the legalization of schemes to be operated by property brokers and travel agents that did not participate in the original tender. Indeed, the latest rumor is that they have agreed to join forces and set up a joint company in order to minimize losses. In the new company, Alpha Bank is said to hold a 29 percent interest, Eurobank 22 percent, a number of travel agents 13 percent, but the remaining part is not specified. The process of finalizing schemes had already been held back by a legislative delay in designating GNTO as the general overseeing authority of the program, responsible for surveying and approving apartments. Then GNTO, without consulting the parties involved, issued the controversial circular which, opponents charge, aims to boost the finances of GNTO employees’ pension fund. The circular provides for an unspecified levy -or «processing» fee- (estimated between 100 and 200 euros) on every homeowner interested in applying to lease his property, but does not provide for any prior inspections by GNTO. Earlier this week, a number of the agencies involved, the Panhellenic Federation of Property Owners (POMIDA), the Athens-Attica Association of Real Estate Brokers, and the Hellenic Association of Tourism and Travel Agents (HATTA) issued a joint statement proposing modifications to the circular, including those regarding accommodation specifications. They propose that the levy does not exceed 50 euros and should not burden the property owner. Another issue in the GNTO circular causing a great deal of friction is the very tight deadlines for submitting the applications for leasing property – June 30, when the circular was drafted only 45 days ago. According to sources, GNTO chairman Yiannis Patellis has already agreed for the deadline to be extended, but it remains unknown if he is prepared to accept February 29, 2004 as the new date, as called for in the common statement. Others argue against a deadline, with a view to meeting last-minute demand. One of the documents required of applicants in the circular is an engineer’s certificate that the property was not damaged in the 1999 earthquake, which was not asked of any hotels and is now seen as impossible to verify anyway. The circular also excludes as unsuitable for leasing properties built before 1981, which leaves out most houses in the center of Athens, or two-thirds of the number registered so far by the two official consortiums. It also excludes studios, specifying a minimum of three bedrooms and two bedrooms for each property. Critics also argue that such specifications will push up prices and undermine demand, pointing out that studios are especially suitable for the large number of young couples who are expected to show interest in watching the Games.