Greek Tourism: Less Revenue in 2016, More Challenges in 2017

The president of the Hellenic Federation of Hoteliers, Yiannis Retsos, expects no increase in tourism revenue for Greece this year, despite the rise in arrivals to the country.

Speaking to journalists during a media briefing on Wednesday in Athens, Retsos said that 2016 was a very difficult year and that it would be highly unlikely for Greece to see an increase in tourism revenue, following the five percent drop in travel receipts (346 million euros less) during the January-July period, compared to the previous year.

Hellenic Federation of Hoteliers President Yiannis Retsos. Photo by GTP

“This loss is very difficult to be covered with revenue from August to October… I believe it is impossible”, Retsos said.

According to the federation’s president, the negative development in tourism revenue has resulted from the decline in the average stay of visitors in the country, the fact that Greece did not benefit as much as expected from Turkey’s loss in tourists and the impact of overtaxation on tourism enterprises.

“When you increase the VAT on tourism and the whole travel package becomes more expensive by 10 percent, visitors will either avoid the destination or just spend much less than usual”, he said.

Retsos added that the shadow hospitality (unregistered short-term rentals) has also done its part in depriving revenue from the state and creating conditions of unfair competition for tourism enterprises that operate legally. “This market has become an international trend and has a following”, he said, adding that a legal framework for the operation for short-term rentals was long overdue.

2017: More challenges expected

In regards to next year, Retsos said that he expects even more challenges for the sector as competition is expected to be even more intense.

“It is certain that Turkey will do what ever it can to regain the tourists it lost this year”, he said.

Referring to Greece, he said the country’s tourism product will be less competitive (more expensive) due to tax burdens and the lack of tourism investments since the relevant law has no “investment logic” for the hotel sector.

“There is a prospect that things will turn out better, as long as key issues are resolved to reverse the situation”, he said.

According to Retsos, the proper management of the refugee and migrant crisis, which recently has taken a turn for the worse, is vital to the country’s destination image.

“The state must handle the situation correctly and local governments and communities must have a responsible attitude as this can create a big problem for us”, he stressed.

Retsos also said that next year Greece must regain its share of Russian visitors and improve relations between banks and hotels through the proper management of the so-called “red” loans.