Energy and raw materials are cutting hotel turnover this year

By Vicky Kourlimbini

On the one hand the great losses of the pandemic with two tourist seasons lost for the most part. On the other hand, the spike in prices for fuel and raw materials, as a result of the Russian-Ukrainian war. The loss this year for the turnover of tourism companies and especially hotels – which will operate at pre-agreed prices in tourist packages as stipulated in the contracts with tour operators – is considered a given by local entrepreneurs.

The increase in the operating costs of accommodation this year is estimated at at least 30% compared to last year. As noted in Capital.gr by hoteliers, it can be even larger in units with increased catering needs, for example in accommodations that operate with the model of all inclusive.

However, there is no room for increase in packages. The hoteliers remind that the agreements with the tour operators are concluded at least a year earlier, with the latter buying rooms at a standard price, so no changes can be made in time. The majority of hoteliers, according to the report, have closed the prices of the packages at the same levels as in 2021.

What entrepreneurs now expect is to ask for increases for next year’s packages. However, as the tourist environment is characterized by liquidity and great competition, especially in terms of Mediterranean destinations, the scope for negotiation is not large.

The tourism market is betting even on the increase of arrivals in the coming months and by the end of the year to reach the levels of 2019 to approximately 30 million visitors from abroad. In the field of revenues, forecasts can not be made yet, but due to rising inflation and price increases, it is estimated that tourists will be “sparing” in their expenses this year in addition to the tourist package.

The footprint of the pandemic

As shown by the annual survey of the Institute of Tourism Research and Forecasting entitled “the performance of Greek hotels in 2021” on behalf of the Hotel Chamber of Greece, last year operated 96% of Greek hotels, with an average occupancy of 68% and the average price of a double room 68 euros. Three out of four hotels opened between May and July, while their total turnover amounted to 5.48 billion euros, ie 35% lower than the corresponding turnover of 2019. It is noted that the hotels in continuous operation showed an average reduction of turnover by 57%.

At the same time, in 2021, hotels received an average of 79% less down payments compared to 2019, which corresponds to a deficit of 590 million euros. In fact, taking into account that 50 million euros were left to be returned by the vouchers, the deficit in the cash of the hotels was 640 million euros. This deficit concerns a large percentage of resort hotels.