The hotel industry in Greece is struggling to overcome the “vise” of energy costs and the uncertainty of the forecasts created by the war in Ukraine this year. The forecasts for Greek tourism in 2022 may still be optimistic, but the risk for most hotels will be their viability, as increases in fuel and raw material prices will gnaw at cash flows. according to industry sources.
With 2019 prices, hotels will try to exceed energy costs
This is a “balance of terror” in the finances of hotels as, as explained by the president of the Panhellenic Federation of Hoteliers Grigoris Tassios, operating costs seem to be 25% to 30% higher compared to 2021, with energy starring in this equation in 2022. It is characteristic, Mr. Tassios continues, that hotels based on the mass model of attracting customers (most of them) have signed contracts with Tour Operetor’s (travel organizers), which have locked prices of 2019.
The “locked” contracts are signed by the hotel companies one year before the start of the new tourist year and of course there is no room for overdue increase. Prices are being raised by the short-term lease industry, adds Mr. Tassios. In the past two years, adds Mr. Tassios, there have been no price increases on contracts due to the pandemic and the effort to keep the tourism package competitive. “Tourism and the hotel package is not a package that you find on the shelf. The price of the package on the shelf increases whenever it has to be done. On the other hand, hoteliers do not have this luxury, because they close deals one year before the beginning of the year. “, typically states the president of POX.
Remaining in the field of operating expenses, the president of the Institute of Tourism Research and Forecasting Konstantina Svinou emphasizes that now 40% of the turnover of a hotel is directed to energy costs. In fact, he adds that the big blow is borne by the hotels of continuous operation, which with minimal occupations try to succeed. It is characteristic that a hotel in Athens with low occupancy wastes 70% of its turnover. “Under these conditions, the hotel is not viable,” notes Ms. Svinou.
ITEP President: “The hotel is not viable under these conditions”
Given that 70% of hotels that are 1,2,3 stars and can not make price changes upwards, it is certain that the hotel industry will work for energy costs in 2022, as he says. However, any intention to increase prices in existing units is postponed to 2023 and always guided by the competitiveness of the tourism package. In fact, this year the tourist package for the candidate tourist will be charged by the transport costs and not by the hotels, with Mr. Tassios emphasizing that only the air ticket will increase from 50 euros to 100 euros due to fuel. Of course, the concern is passed on to the cost of travel by car, with all that this implies for the road destinations of the country.
An important road destination is the Peloponnese, with Dimitris Pollalis, president of the Laconia Hoteliers Association, expressing his optimism that even with these difficult conditions, a car vacation can be a lifeline for a family of four. And even more so when the prices will be attractive to domestic and international tourists.
The industry is requesting an extension of the loan obligations
When asked what the hotel industry is asking for in order to deal with the current situation, the president of POX asks for decisions to be taken at the interbank level, so that ETEAM loans, given due to Covid, go from 5 years to 7 to 10 years. , as it is also an EU decision. At the same time, he asks for the possibility of horizontal adjustment for other obligations, with payment of even 100 installments. For her part, Ms. Svinou pointed out that the aid should not be given horizontally but targeted where needed.
Regarding now that the bookings for Greece are moving in the middle of the war, Mrs. Svinou expresses her optimism that everything will go smoothly this year, as so far there are no cancellations, but of course there is no flow of new bookings. At this point, Mr. Tassios adds that the market wants security to move. In fact, after peace in Ukraine, it will take 15 and 30 days for the change in the number of reservations to be seen, he notes. Of course, the big question remains when will Greek tourism start dynamically, with the hope that it will probably be postponed to May, according to Mr. Tassios.
Starting in April for the Resorts in Crete
In any case, the hoteliers of the country will be ready much earlier, with Andreas Metaxas, CEO of Metaxa Hospitality Group, emphasizing that the group’s units in Crete will open from April. Specifically, Creta Maris will open on April 2, Candia Maris on April 9, while in Santorini Santo Maris Oia will open on April 20. In this difficult economic environment, Mr. Metaxas emphasizes that the group is not going to limit costs related to staff, since as he notes, people are the ones who give value to companies. In fact, he points out that now more than ever it seems how important is the investment of hotel businesses in the digital environment and in the reservations that do not pass through the paths of Tour Operetor’s.
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