Hoteliers fear for future
Greek hoteliers yesterday voiced reservations about the development of holiday housing complexes on a large scale, now being promoted by the government. Speaking in Athens at the international realty conference «Modern Forms of Investment in the Realty Market,» Gerasimos Fokas, president of the Greek Hoteliers’ Chamber (XEE), said the return on invested capital of most Greek hotel enterprises has been negative for years, as shown by their balance sheets. He attributed the phenomenon to hotels’ pricing policy, a high burden on their costs in the form of taxes, municipal rates and social insurance contributions, and inflexible labor regulations. Fokas maintained that Greek hotels have the highest labor costs in the European Union, accounting for more than 50 percent of their total operating costs. Social security contributions are also the highest in the EU, he added. A further important reason is the excess supply of hotel beds throughout the Mediterranean, which is also cited by foreign tour operators. «The above reasons explain why the large multinational hotel chains opt for managing Greek hotels rather than acquiring them. We have been hearing of major foreign investments in Greek tourism for years but have not seen one being implemented. When looking at the plans for such investments, one essentially finds that interest is focused on the construction and sale of holiday accommodation,» Fokas said. «For this reason, XEE, which represents more than 9,500 hotel enterprises, has strong reservations about any legal provisions that would favor, in terms of zoning arrangements or economic incentives, any type of accommodation that would lead existing hotels to economic decline,» he added. Fokas said however that XEE was in favor of the mixed model of holiday housing and hotel complexes, but only if combined with special tourism infrastructure, particularly golf courses, in order to bolster the viability of such investments which broaden the facilities that the industry can offer. Separately, a recent study has concluded that the hiring of college graduates by firms in the tourism sector helps them increase their turnover significantly. According to the report, prepared by EFG Eurobank’s Economic Studies and Forecasts Department, a 25 percent increase in the number of graduates working in tourism enterprises increases their turnover by up to 47 percent. Interestingly, tourism firms employing higher percentages of college graduates have slightly lower operating costs as a percentage of their turnover, compared to those employing more school leavers. College graduates represent 25.4 percent of employees in the Greek hotel industry; 59.1 percent are high or lower school leavers and 15.4 percent have a professional diploma in tourism or other specialization. College graduates represent 19 percent of the total Greek work force.
