Hotels are forced to sign cut-price deals


Cash flow problems are forcing Greek hoteliers to sign contracts with foreign tour operators that last for many years and lock prices at low levels.

The incentive for hoteliers is the down payments they receive from the tour operators that operate like banks for the local hotel enterprises. Tourism market professionals speak of hoteliers who have “mortgaged” their rooms for rates from as little as 15 euros per night for contracts lasting up to 2021.

The same professionals stress that the profit margins that can be secured on an annual basis play a decisive role in determining foreign tour operators’ policy toward destinations, as these are companies that are listed on international stock markets and are always seeking to improve their financial results. They have realized that there are opportunities in Greece for them to raise their profits, in some cases securing margins of up to 300 percent, the same professionals add.

This explains the trend of arrival numbers increasing while revenues per visitor have been declining, as was the case in 2016.

Greek Tourism Confederation president Andreas Andreadis estimates that incoming tourism this year will post single-digit annual growth in percentage terms. He considers it possible that the target of 28 million visitors in 2017 will be achieved, even though cruise passenger arrivals are expected to shrink by 500,000 from 2016.

Positive forecasts for arrival numbers are backed by the international tourism market: On Monday Germany’s Die Welt daily reported that German bookings for Greece are expected to rise 70 percent this summer compared to 2016, confirming an estimate by Reuters earlier this month for a 67 percent increase. Both media outlets cite data from GfK researchers and point out that Greece now ranks second in Germans’ holiday choice for this summer after the Balearic Islands.

At the same time Thomas Cook has reiterated that its bookings for Greece are up 40 percent on last year.