Ho­tels forced to sign cut-price deals

Kathimerini English - - Focus - BY STATHIS KOUSOUNIS

Cash flow prob­lems are forc­ing Greek hote­liers to sign con­tracts with for­eign tour op­er­a­tors that last for many years and lock prices at low lev­els.

The in­cen­tive for hote­liers is the down pay­ments they re­ceive from the tour op­er­a­tors that op­er­ate like banks for the lo­cal ho­tel en­ter­prises. Tourism mar­ket pro­fes­sion­als speak of hote­liers who have “mort­gaged” their rooms for rates from as lit­tle as 15 eu­ros per night for con­tracts last­ing up to 2021.

The same pro­fes­sion­als stress that the profit mar­gins that can be se­cured on an an­nual ba­sis play a de­ci­sive role in de­ter­min­ing for- eign tour op­er­a­tors’ pol­icy to­ward des­ti­na­tions, as these are com­pa­nies that are listed on in­ter­na­tional stock mar­kets and are al­ways seek­ing to im­prove their fi­nan­cial re­sults. They have re­al­ized that there are op­por­tu­ni­ties in Greece for them to raise their prof­its, in some cases se­cur­ing mar­gins of up to 300 per­cent, the same pro­fes­sion­als add.

This ex­plains the trend of ar­rival numbers in­creas­ing while rev­enues per vis­i­tor have been de­clin­ing, as was the case in 2016.

Greek Tourism Con­fed­er­a­tion pres­i­dent An­dreas An­dreadis es­ti­mates that in­com­ing tourism this year will post sin­gle-digit an­nual growth in per­cent­age terms. He con­sid­ers it pos­si­ble that the tar­get of 28 mil­lion vis­i­tors in 2017 will be achieved, even though cruise pas­sen­ger ar­rivals are ex­pected to shrink by 500,000 from 2016.

Pos­i­tive fore­casts for ar­rival numbers are backed by the in­ter­na­tional tourism mar­ket: On Mon­day Ger­many’s Die Welt daily re­ported that Ger­man book­ings for Greece are ex­pected to rise 70 per­cent this sum­mer com­pared to 2016, con­firm­ing an es­ti­mate by Reuters ear­lier this month for a 67 per­cent in­crease. Both me­dia out­lets cite data from GfK re­searchers and point out that Greece now ranks se­cond in Ger­mans’ hol­i­day choice for this sum­mer af­ter the Balearic Is­lands.

At the same time Thomas Cook has re­it­er­ated that its book­ings for Greece are up 40 per­cent on last year.

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