The hotel industry in Greece should see the pandemic as an opportunity to move towards “expensive and quality tourism”, according to a study from HVS.
The comments came as Greece announced that it would open to international tourists from 1 July.
The country has brought in a number of measures to help to bolster tourism, including transport duties being lowered from 24% to 13% for the next five months, making boat, plane and bus tickets cheaper during the tourist season.
Greece has no plans to quarantine tourists, but is likely to undertake spot virus tests on arrivals.
Gelina Kordoni, assistant analyst, HVS Athens, said: “It is about time for destination management organisations to step up, take matters in their own hands, and create a setting where the hospitality businesses will be able to exploit the country’s beauty to its greatest potential; an enhanced tourism environment that does not simply content itself to the natural beauty of our land but strives to bring out our culture through practical efforts.
“The consequence of such an initiative will be the provision of more expensive and quality tourism, higher returns to hospitality businesses with increased hotel asset values and most importantly, greater resilience of our industry during such times of uncertainty.”
The study said that lost business as a result of the pandemic was felt most across the Greek resorts, where only a part of the inbound travellers had altered and rebooked their holiday plans. HVS said that city hotels has witnessed only a small erosion in their summer business, mainly due to the fact that the flexible policies allowed guests to only cancel at the very last minute, if necessary.
Kordoni said that Greek hoteliers had been waiting “with bated breath” for governmental instructions on the re-launching framework. Year-round hotels are due to open on 1 June, whereas seasonal hotels and resorts can open from 15 June.
Greece’s Prime Minister also announced a set of measures creating a safety net for tourism businesses. These included regulations around repayable advances to relieve businesses, reduction of advance income tax payments, a framework supporting reduced lease payments by 40% until August, and the granting of working capital loans under state guarantee and at low interest rates through the ‘Entrepreneurship Fund II- TEPIX II’ in combination with the Guarantee Fund and the Development Bank.
Kordoni said: “The last measure seems to be especially appealing to both hoteliers and bankers, as the first ones will benefit from an effective financial solution, while the latter ones will be able to offer a more attractive and competitive product to their clients with undervaluation of loans.
“Are these actions sufficient for hoteliers, or further funding is actually needed? Conversing with them, we understand that although the government is on the right track with well-targeted actions, bigger corporations will most likely resort to financial institutions.”
The country had, prior to the pandemic, become a growing focus for investors. Earlier this year Reuben Brothers acquired La Residence hotel in Kalafatis Bay, Mykonos, Greece, for an undisclosed fee, as part of their continued strategy of investing in premium hotel assets in key European destinations.
Jamie Reuben, a principal at Reuben Brothers, said: "Mykonos' popularity has grown exponentially in recent years and the island is now firmly established as a highly desirable visitor destination for travellers from all over the world, looking to experience the spectacular beauty of the Greek islands.
“La Residence is ideally positioned to provide guests with an exceptional experience during their visit to Mykonos, and we plan to build on its already excellent reputation with further enhancements to its facilities and operations, positioning it amongst the very best hotels in Mykonos.”
Insight: Greece was one of the countries least affected by the virus and it was looking to limit the economic impacts as soon as possible, without allowing summer guests to under its good work on healthcare. The issue is pressing: according to the Greek Tourism Ministry, more than 33 million tourists visited the country last year and forecasts for 2020 had suggested another record year.
For the long term, the view is that Greece needs to be more Spain, an opinion which appears to be shared by the Reuben Brothers. Spain came out of the global financial crisis stronger after its hotel owners and operators seized the need to overhaul their businesses and their properties and since then, Spain has been sizzling hot for visitors and investors.
Spain is being cautious in its reopening after sadly faring worse than Greece during the outbreak. A chance looms for Greece.