ECONOMY

Hotels place 600-million-euro bet

The news was hair-raising. Around 500 tons of asbestos, a potentially cancer-causing building material, was removed from the Athens Hilton during its recent renovation, Greek engineers revealed in June. The Hilton is not the only hotel in the Greek capital that radically broke with its past to show a shiny new face in time for the 2004 Athens Olympics. Sensing a golden business opportunity as the world’s spotlight focuses on the city, local hotel owners plunged their hands deep into their pockets to catapult their establishment’s infrastructure from an outdated state directly to the digital age. «In May, Athens’s hotel facilities will be the best in Europe,» a confident George Tsakiris, president of the Greek capital’s Athens Hotel Association (EXA), told AFP. Its members have invested more than 600 million euros (680 million dollars) to bring their hotels up to scratch, he said. Bank loans and the hotel owners’ own savings covered much of the investment. Substantial advance payments from Olympics organizers, who have booked around 80 percent of the hotels’ total capacity to host officials and journalists during the Games, also helped. But before putting their money on the line, hoteliers made sure they kept the lucrative, Olympic business pie to themselves. «Ask the current owners why no new hotels were built in Athens ahead of the Games,» said the frustrated executive of a Greek casino group which planned to put a luxurious new hotel complex close to the main Olympic venue. According to Greek Hotel Chamber figures, Athens offers visitors a paltry 30,000 hotel beds. The city has such a thin hotel capacity because the vast majority of some 12 million tourists coming to Greece every year prefers to head directly to seaside resorts rather than dwell in the chaotic, smog-ridden city. So when the government announced three years ago it would lift a 14-year ban on the construction of new units in the area, top-heavy players, including the property-rich Church of Greece, rushed to table 67 proposals for glitzy new hotel outfits. But existing hotel owners cried foul, raising fears of hotel overcapacity. When the building ban was eventually lifted, they successfully resisted a softening of building regulations that was needed to erect new hotels. «It would have been unfair competition if new players were allowed to build with emergency legislation, while we had stuck to the old rules. We just couldn’t accept that,» Tsakiris explained. «Just because the State needs extra accommodation for a 20-day period (during the Olympics), people shouldn’t be looking at ways to profit from the situation,» an EXA official went on record as saying. But fending off unwelcome new competition alone will not suffice to recoup the hoteliers’ investment. The average occupancy rate of Athens hotels hovers just above the 50 percent mark, Tsakiris said. «We need business. There must be more business,» he stressed. In order to fill their expensively revamped hotel rooms, the hotel business is hoping the Olympics will turn Athens into a hub for culture and business conference travel. In addition to hoping the 2004 Games will turn the less-than-laid-back Greek capital into a destination for high rollers, hotel owners are pressing the government to stop dragging its feet on a number of issues. The state-run Greek National Tourism Organization has been unable to stage effective promotion campaigns abroad, they complain. Hoteliers also want an increase in investment depreciation rates to ease their renovation bill. Last but not least, a revival of stalled plans to bring Greece’s hotel-rating system in line with the internationally established five-star scale is needed, they say. (AFP)