NEWS

Price wars break out between hotels and rented rooms when visitors are fewer and have less cash to spend

Greeks used to dread ending up working as waiters for Europeans. Now a number of them have become waiters, and cheap ones at that. In a country which could have tourists half the year round, the tourist season has shrunk to two months. In a small, beautiful place which suits the development of boutique tourism, mass tourism has developed instead. It offers a cheap, uniform product that leaves Greece with no comparative advantage. Northerners can find sunshine and warm seas cheaply elsewhere. And for Greeks, it costs the same to spend nine days on Rhodes or eight visiting the oases of Tunisia. The beginning of the end Large five-star hotel groups are cheap for some customers, such as the groups brought in by major European tour operators. They secured deals almost as low as cost prices last spring (up to 50 percent below that listed on the door), when the war in Iraq and the SARS epidemic had the tourist industry running scared. Having secured cut-rate prices, they then capitalized on the tourist crisis in Greece to force prices down further (as much as 70 percent below the price on the door). Hoteliers who would not yield to pressure from tour operators that were renegotiating prices nine months after signing their contracts had their contracts canceled altogether. So, even though tourism is down by an average of 10 percent on the large islands, the real losses are greater, because hotels have accepted low prices. And while the large hotels can handle the loss by offering poorer customer services and food, smaller hotels suffer badly. As N. Pouliou, president of the Kos Hoteliers’ Association, told Kathimerini: «This system has sidelined small and medium-sized hotel enterprises. It will cause social problems, because these firms will go out of business. «These hotels were created largely by migrants, who invested their savings and got development grants. Money was slow to come in, hoteliers got into debt and now many hotels are under threat of being auctioned. «A few days ago, the Kos association of debtors occupied the local town hall in an effort to stop the auctions. Foreign and multinational companies have built high-class hotels with hundreds of beds and the island is saturated, but the government won’t stopped issuing permits.» The all-inclusive system is a recent innovation whereby tourists pay a sum to a travel agency in their own country to cover all expenditure on food, drinks and entertainment. An American idea, it came to Europe via Spain in the 1990s. In recent years, small four- to five-star village complexes which offer everything have been starting up in Greece. As Pouliou comments: «The Spanish market cut that system out three or four years ago, because hoteliers began to realize that they were not making a profit, even if they offered poor services. In fact, the Spanish took the tour operators to the European Court, but they lost the case, because it did not come into the category of unlawful competition. The system has come to Greece, and when that market is saturated, it will be the turn of Turkey, Tunisia and Morocco.» The consequences of this system, which is popular with German and British tourists (who make up 75 percent of visitors to the large Greek islands) are overwhelming, as S. Poulimenos, deputy prefect of Corfu explains: «The cry of anguish is uttered by businesses outside these groups, such as restaurants, bars, folk art outlets and jewelry stores. Many of those businesses will not survive on islands where the system is in place.» What can be done? Poulimenos talks of readapting economically. «People must take up other forms of employment, such as growing crops. During the tourist season, we bring in produce from Preveza and abroad. «We are trying to find other ways of attracting tourists all year round,» Pouliou chips in, «developing conference tourism, sports tourism in the modern training facilities built over the past three years, developing the marina to maintain boats.» The Naxos Hoteliers’ Association has set up an office which gets daily updates on what accommodation is available on the island. As the union’s president K. Kavouras says: «There is an attempt to keep prices down in all areas connected with tourism. Good hotels and rented rooms have got customers. The problem is with poor-quality accommodation. But do write that on August 15 there are good rooms available on the island.» The truth is that on the smaller and cheaper islands, which are traditional destinations for Greek travelers, the situation is bad. In most of them, only 40-60 percent are expected to be full in July, and everyone is waiting for August, when Greek families go on vacation, to save them from the slump. Many hoteliers say they are ready to sell up. The average Greek can no longer afford to enjoy holidays in Greece. As N. Manousos, president of the Andros Hoteliers’s Association says: «The people keep the businesses going. And when the people don’t have money, what will the businesses live on?»