Greek Hotel Sector Needs Favorable Tax Policy to Attract Investments, Says Alpha Bank

The Greek hotel sector needs a more favorable tax policy in order to attract investments and improve the quality of offered services, Alpha Bank said in its weekly bulletin on Friday.

According to the bank’s analysts, the imposition of a higher VAT rate at 13 percent from 6 percent in 2015 applicable across most of the country has curbed competitiveness, with tourism businesses forced to absorb a substantial part of the increase in order to keep their prices “friendly”. The Alpha Bank study noted that in comparison to main rival markets, VAT in Greece in the accommodation sector is considerably higher depriving the country of its competitive advantage.

To address the challenge, the report suggests the implementation of a favorable tax scheme in order to keep hotel rates competitive in terms of price and quality, pave the way for the creation of new jobs, attract investments to improve the quality of services, tackle competition from shot-term rentals, reduce the prices of hotel services and overcome the issue of seasonality.

Backing the concerns is Greek Tourism Confederation (SETE) President Yiannis Retsos, who agreed with Alpha Bank’s findings noting via his twitter account:

”Correct analysis by @Alpha_Bank. Reducing VAT on accommodation-F&B-transportation will attract investment, can lead to an increase in market share internationally, but above all will shield future supply in case there is a possible reversal of the positive trend, which I believe is not far away.”

In the meantime, Turkey is quickly making up for lost ground marking a 30.36 percent rise in arrivals in the first half of 2018, with Greek hotel professionals telling Naftemporiki that they expect the rival destination to break all records in 2019 leaving the Greek market behind.