ECONOMY

Hotels on brink of bankruptcy

hotels-on-brink-of-bankruptcy

Almost two in every three hoteliers think they might go bankrupt due to the tourism sector shutdown, while the vast majority of hotel owners expect their annual turnover to decline by more than 50 percent this year. They also speak of employment in the sector shrinking 40 percent, which would mean the loss of some 45,000 jobs.

These figures stem from the third phase of the “Covid-19 and Greek Hotels” survey conducted on April 1-10 on a sample of 1,779 hotels around the country, or 18 percent of the members of the Hellenic Chamber of Hotels.

The survey, carried out by the Institute for Tourism Research and Forecasts (ITEP), revealed that 65 percent of hoteliers consider it likely or very likely they will have to declare bankruptcy (46.6 percent say likely and 18.3 percent very likely).

Among seasonal hotels this rate goes down to 51.8 percent (40.5 percent likely and 11.3 percent very likely), while 95 percent of hotels that stay open year-round anticipate a reduction in turnover averaging out at more than 56 percent. If this latter projection is correct, it will mean an annual loss of revenue for the entire industry totaling some 4.46 billion euros in 2020.

Four out of seven (57.3 percent) hotels operating year-round expect employment to shrink 40 percent, while two-thirds (65.4 percent) of seasonal hotels see employment diminishing by 41.5 percent on average. If this were to apply to the entire sector, it would signify the loss of over 45,100 jobs.

Funding needs are estimated at 498 million euros for year-round hotels and 1.29 billion for seasonal units, for a total of 1.79 billion euros, the survey has found.

Alexandros Vassilikos, the chamber’s president, said a set of measures have already been proposed to the Tourism Ministry: They include strict and extensive health measures for hotel operation, labor subsidies and the suspension of payments for overdue contributions, tax breaks including value-added tax cuts and the abolition of the supplementary property tax, bank arrangements with the supply of working capital, and targeted interventions such as the horizontal extension of the 40 percent rental rate discounts whether hotels operate this year or not.