The Euro crisis—far from being resolved—is attracting negative media attention on the Greek economy. And the travel and tourism sector along with it.
The tourism industry and the hotel sector could prove to be key contributors to the country’s recovery, with a 4% expected contribution to Greece’s gross domestic product during the next three years.
The travel industry represent 15% of Greece’s GDP and is employing more than 746,000 people across the country. Therefore, I believe the travel sector, and particularly the hotel industry, should be among Greek politicians’ top priorities in 2012.
While it might require a little more than a simple PR exercise, working on the country’s image abroad certainly will help bring travelers into Greek’s hotels and guest houses. And given the state of the country’s balance sheet, an increase in foreign liquidity could prove essential.
But to get there, politicians, tourism boards and hoteliers will have to court travelers to the country. Greece welcomed more than 13.2 million arrivals during 2010, led by Germany, the United Kingdom, France and Italy.
Greece’s hoteliers have returned to positive revenue-per-available-room growth in 2011 following two consecutive years of decline, and this year will be a test year for the country’s hospitality industry to maintain its appeal and fill some of the 763,000 daily beds around the country.
Hotel performance in the country’s two main economic centers, Athens and Thessaloniki, behaved differently. This was especially apparent during the worst time of the global economic crisis
Thessaloniki—located in the northern part the Aegean region and famously known for its maritime trade and its position as the second economic hub in Greece—reported a slightly better position for hoteliers than their counterparts in Athens in terms of RevPAR since 2008. The effect of the economic crisis only started biting hoteliers in Thessaloniki during 2009, when RevPAR performance dropped 6.8%, which was mainly led by declining occupancy.
In Athens, hoteliers started feeling the Euro crisis a little sooner. The city experienced a 4% decline in occupancy during 2008. By year-end 2009, occupancy had dropped another 11.2% to 60.4%, fueling a RevPAR decrease of 23.6%.
As the global economy began to improve during 2011 despite lingering shadows of volatility in the eurozone, visitors began returning to Greece; occupancy improved in both Athens (+9%) and Thessaloniki (+7.1%).
However, the challenges for hoteliers in both cities are far from over. RevPAR has continually declined between weekends and weekdays (which is often a good indicator to identify patterns between leisure and business travelers) since the second half of 2011.
The trend also seems to indicate that during the toughest discussions with France and Germany over a proposed bailout, which led to street protests in Athens, the hotel industry suffered through terrible negative PR.
So as travelers begin planning their next summer vacations, it’s unsure whether Greece will emerge as a viable holiday destination. For travelers who do make the trek, not only will they be able to enjoy the country’s rich cultural heritage but also take solace in the fact they’re contributing a direct investment to the future of the Greek economy.
David can be contacted on dgrossniklaus@strglobal.com. Follow him on Twitter @dgrossniklaus.
The opinions expressed in this blog do not necessarily reflect the opinions of HotelNewsNow.com or its parent company, Smith Travel Research and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.
