Hotels forced to shut their doors as arrivals drop by 5 percent; earnings reduced by 25 percent

A drop of 5 percent in arrivals and a much greater reduction of 25 percent in earnings from tourism is this year’s reckoning in Greece. In many tourist destinations, such as Crete, some accommodations never actually opened, while on others, such as Kos, some stores will close down this winter. Simultaneously, agreements with large international tourist agencies have been renewed for the 2004 tourist season at the same ridiculous prices that were set this year. In some cases, prices dropped by 20 percent, while only in very few instances – such as in Halkidiki – did Greek hoteliers manage to increase prices by 2 percent. In tourist destinations with a large turnover of visitors, estimates to date (given that the season ends at the beginning of October) suggest that Halkidiki was the least hit by the fall in tourist numbers. President of the Halkidiki Hoteliers Association M. Athanassopoulos told Kathimerini that the drop in arrivals from abroad was expected to reach 5 percent and turnover was projected to fall by 10 percent. He attributed the peninsula’s better performance to its advertising abroad, noting that «in collaboration with the local authorities, we are implementing programs that promote the prefecture at a cost of 650,000 euros. This has been done without the Greek National Tourism Organization (GNTO) clarifying how much it would contribute – though the program is for 2003 – nor the regional authorities making clear what they aim to do.» The peninsula features in 19 exhibitions throughout 2003-2004, «while we maintain public relations offices in England and Germany. This year especially, the big advertising campaign we carried out in Russia and countries bordering Greece – Serbia and Montenegro, the Former Yugoslav Republic of Macedonia, Bulgaria and Romania – has brought results.» Crete appears to lie at the other extreme. K. Kaloutsakis, chairman of the Hoteliers Association of Iraklion, told Kathimerini that «by the end of the tourist period, we hope that the drop in tourist numbers will have been held at 7-9 percent. We estimate the fall in turnover to have reached 20-40 percent, since companies worked at very low prices so we could deal with competition from other countries.» He predicted a hard winter for smaller hotels «while large hotels will lose out to competition.» With first-class hotels charging 20 euros per person in September (with breakfast), operating costs such as wages and taxes would obviously be hard to meet. As for next year, Kaloutsakis said: «Prices, which are written into contracts signed with tourist agencies for 2004, are the same as this year’s, or even up to 20 percent lower.» Indicatively, tourist agencies this year refused to sign contracts guaranteeing occupancy of rented rooms and apartments. S. Polycratis, chairman of the Business Federation of Rented Rooms and Apartments of Greece (SEEDDE), said that «in some areas, like the Peloponnese, the drop was as much as 25 percent, while in areas like the Cyclades – where the fall in the number of foreigners was as much as 30 percent – Greeks saved the situation, although prices fell by 20-30 percent.» He stressed that hotels that had modernized had less of a problem. «We drum it into the ears of our members that modernization is not undertaken to increase prices but to keep us in the market. «And to the 40,000 accommodations owners, we add that they have to be polite, hospitable and helpful because 54 percent of our clientele comes to us through recommendations and only 25-30 percent through advertisements.» The main needs of the sector, Polycratis said, are upgrading accommodation, «which is possible through the business competitiveness program. Some 2,500 applications have been made, the grants are generous (40 percent) but bureaucratic processes have caused serious delays.»

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