ECONOMY

Slump in demand drives top hotel prices to rock bottom

Spurred by a slump in foreign demand in mid-summer, major domestic hotel chains are offering extensive discounts on inclusive packages to Greek customers. A 10-day package for a four-member family at an A class hotel in Rhodes, including the ferry fares, yesterday was quoted as 1,000 euros. The prices for other seven-day packages at major tourism destinations (without fares) now vary between 440 and 700 euros. The fall in demand in June is estimated at 12.5 percent compared to the same month last year. In an interview with Kathimerini last week, Andreas Andreadis, a member of the Panhellenic Hoteliers Federation (POX) noted that among other problems, hoteliers also have to deal with Greece’s «bad reputation» abroad for expensive accomodation. He argued that the high-cost reputation, which may hold true in specific cases or during high season, is on the whole unjustified, and seems more apt for other, out-of-hotel expenses incurred during a holiday. Citing data from a study of 35 luxury, A and B category hotels all over Greece, Andreadis said that high-season price increases for individual customers averaged just 5.9 percent year-on-year. Many hotels tend to adjust their prices according to demand, usually making better offers as the season progresses, meaning that at the end of the day, price increases could be totally erased or even turn into decreases, he added. Inexpensive vacation packages to Greece, which are widely offered abroad, seem not to attract many foreign tourists anymore, as past experience shows that their vacation budget could increase by up to 100 percent due to other daily expenses. This has led to an increasing number of hotels in Greece adapting toward the «all-inclusive» package system, meaning that tourists are able to calculate the total cost before leaving home. Andreadis notes that this is a «one-way street» solution for many hoteliers who are trying to increase demand and, in many cases, just financially survive after a three-year slump in the tourist market. Yet, this solution has many repercussions for local economies and especially for hotel «satellite» businesses. With tourists spending very little beyond the bounds of the hotel, the income for such businesses is strongly limited. Like other representatives of the tourism industry, Andreadis laments the «tragic mistakes» of the recent past, insisting that this summer’s Athens Olympics were never promoted within the context of overall tourism. He insists that the promotion of the Greek tourist market abroad must be drastically restructured. Andreadis says that while each destination in Greece must preserve its «identity,» advertising campaigns waged abroad by local authorities must be congruent, or have a common theme with the promotional approach of the central government. He also sees a pressing need for the upgrade and modernization of infrastructure in the main tourist areas. He notes, for example, the difference between Athens International Airport and that of Iraklion, Crete’s major tourism destination, pointing out that the two facilities are worlds apart in terms of quality. Yet, arrivals in the Cretan airport during the month of May equaled 70 percent of those of the Athens facility. Many such serious infrastructure shortcomings, especially in the road system and in port facilities, can be detected in other major tourist destinations in Greece.