ECONOMY

Oversupply hurts Attica hotels

oversupply-hurts-attica-hotels

The increase in the number of hotels in Athens and the even steeper growth in accommodation available through online short-term rental platforms have started to affect occupancy rates and revenues per room at the capital’s hotels.

That’s in a period when arrivals at Athens International Airport have been breaking record after record: In 2019 AIA registered its highest passenger traffic ever, at 25.57 million passengers, up 1.4 million or 6 percent from 2018.

However, there was a 2.2 percent decline in occupancy rates at Athens hotels last year, a reduction of 1.4 percent in revenues per available room and average room rates saw annual growth of just 0.9 percent.

According to data from the Athens-Attica & Argosaronic Hotel Association, every single month of 2019 showed a drop in hotel occupancy rates, which reached up to 8.8 percent, with the exception of August and September, which were at the same level as 2018.

One explanation lies in the constantly increasing number of available rooms and beds at hotels, as investment in new units in Athens and its suburbs continues unabated.

Based on data from the local hotel association and the Hellenic Chamber of Hotels, the number of available rooms in the center of Athens rose by 7 percent from 2015 to 2019. Over the same period they increased by 3 percent in eastern Attica, by 1 percent in southern Athens and by 5 percent in northern Athens.

At the same time the number of properties registered on Airbnb as short-term rentals in Greece amounted to 91,200 early this month, up 25 percent from a year earlier, according to figures Airbnb supplied to Kathimerini.

From June 2018 to May 2019, Airbnb and HomeAway were offering 170,542 properties for short-term rental on their platforms, a number that is much higher than a year earlier, according to a study by the Institute of the Greek Tourism Confederation (INSETE).

These figures explain why the number of air arrivals in Athens grew while revenues per room and occupancy rates of hotels declined last year.