Interest by budget air carriers plus a reduction in value-added tax and social unrest are seen as critical factors
Greek hoteliers are sounding the
warning bell for the viability of their
enterprises and banking on budget air
carriers, shrewd diplomacy, a reduction in the value-added tax rate and
and a dose of good luck for a recovery
in revenues for 2011.
“There will be a steep increase in
loss-making hotel enterprises in 2010
as compared to to 2009,” says Giorgos
Tsakiris, president of the Hellenic
Chamber of Hotels (XEE).
According to a study presented at
the 26th Philoxenia International
Tourism Exhibition in Thessaloniki on
Thursday, an estimated 50 percent of
Greek hotels offered lower rates this
year than in 2009, resulting in a 7-8
percent reduction in overall revenues.
Tsakiris says the reductions were
unavoidable and were essential to
stem the loss of visitors to other destinations.
“The sole marketing tool we had
was hotel prices... but next year we
must have more at our disposal.”
Tourism operators were encouraged by the 2 percent rise in the number of visitors for the August-September period, after the steep fall earlier
in the year – partly the result of adverse publicity due to riots and strikes
in the spring.
“We managed to overturn this
very negative image only with large
discounts,” Tsakiris points out.
Arguing for a reduction in VAT on
tourism services, hoteliers cite Bank
of Greece Governor Giorgos Provopoulos, who reported that a 1 percent increase in the price of the tourism
product has been found to cause a 3
percent drop in the number of visitors.
It has been emphasized that in the
Dodecanese, where VAT rates are
lower, state revenues increased – in
contrast to the Ionian Islands, where
VAT is higher.
Foreign tour operators are currently pressing Greek hoteliers for a
freeze in prices for the 2011 season.
At the same time, the strong interest shown by low-cost airlines is a major source of optimism for both the
industry and the government. Entrepreneurs are urging the government to pursue “high diplomacy” so
as to tap this interest without upsetting relations with the powerful
foreign tour operators or encroaching on the turf of the two main
Greek carriers upon which they also
rely.
Already, more than 10 foreign
budget airlines are reported to have
shown interest in starting or adding
flights to Greece, including Ryanair,
easyJet, Transavia, Air Berlin, TUIfly,
Wizz Air, BelleAir, Condor and Germanwings. The sharply stronger interest is attributed to the budget carriers’ realization that there is a broad
untapped capacity that could accommodate large numbers of tourists,
especially in the off-season.
Ryanair is reportedly driving a
hard bargain with Greek authorities,
arguing that it could bring 1.5 million
tourists to Greece next year and
promising to start flights to Rhodes
and Kos on March 17.
An industry leader has noted that,
if Greece secured a 75-80 percent capacity utilization for its 750,000 beds
for six months, this would add 4 million visitors to the current number.
“Greece is now a competitive destination in relation to Turkey and other European destinations,” says
Tsakiris. “Barring events that could
turn people away, next year is bound
to be better than 2010.
This Article belongs to: Athens Plus, Weekly newspaper published by The International Herald Tribune & Kathimerini SA • No126 • Friday, November 19, 2010
