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Luxury hotels are least damaged by the crisis

11 November 2010 / 12:11:39  GRReporter
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Most recently, Greek media broke the news that the world famous tour operator Thomas Cook has taken unilateral decision to pay local hotels 5% less than the amounts due for the 2010 season. GRReporter met the President of the Hellenic Chamber of Hotels George Tsakiris to give more details on the case and tell us a little more about the tourist business in times of crisis.

What exactly is the problem with the company Thomas Cook? How did it all begin and why do they want to pay 5% less than the amounts due for August and September 2010?

At the end of September this year many hoteliers in the country informed us that the tour operator Thomas Cook has requested a 5 % reduction of the invoiced amounts for August and September 2010 before signing the contracts for the next season. The company had not officially informed the Chamber, nor had it sent a letter to inform us what the reason for this reduction was. After discussing the matter, the Hellenic Chamber of Hotels as an official representative of the sector decided to advise hoteliers in the country not to agree with this proposal.

Was this requested only from Greek hotels and have other countries encountered the same problem?

It became clear at a meeting of hoteliers, restaurateurs and owners of bistros and cafes within the European Union, HOTREC, held in Budapest on October 28-29 this year, that other countries have encountered the same problem. Colleagues in Spain, Italy, Cyprus, Malta and Portugal have received the same notice that Thomas Cook wants to pay 5% less than the amounts due for the last two months of the season. We decided at the conference the concerned parties to make a joint statement refusing to agree with this delayed requirement of the tour operator for lower prices.

Do you think that the five percent levy have something to do with the difficult summer, which we all faced this year in Greece – the series of strikes, protests, fires and other similar events?

This could be the reason if this discount was requested only from Greece but there are many other countries facing the same problem. At the same time, we do not have any formal notice from the company. All we know comes from its partners (the hoteliers – author’s note) in Greece. We didn’t receive anything from the company to know exactly what they want. We recommend hoteliers not to accept the proposal. Announcing the issue in public helps support this position.

If hoteliers do not accept the proposal of Thomas Cook, won’t they risk to loose the tour agency as a partner for the next season?

I think it will be very difficult the individual hotel units to encounter similar consequences after the joint coordinated statement of the six affected countries in the European Union.

How did the crisis affect the hotel business in Greece this year? The VAT was increased twice; there were difficulties during the tourist season due to protests and other woes. Is the drop in the profit serious?

This year was definitely very difficult, but the truth is that we expected it to be much worse than it actually was. In other words, nevertheless, things turned out better than expected. VAT on hotels was increased twice but the sector absorbed these increases and did not allow them to affect the end price. We still hold the same price levels. If there is increase in the prices until the end of the year it will be 1% to 2%, not more. Revenues are definitely less because hotels have operated mainly based on best price levels this year. Generally, I could say that we managed well this year. It was not a disastrous year.  

What are the prospects for 2011 in your opinion?

I think the next year will be much better for tourism and hotels in Greece. This will certainly happen if some very serious problems and socio-political upheavals don’t afflict the country. There will be no price increase and I think it will help tourism largely.

Which hotels were the least affected by the crisis during the 2010 season?

Big four and five star hotels that offer All Inclusive in certain areas like Dodecanese (Rhodes, Kos and others.), the island of Crete, which adjusted the prices to the demand and obtained good results, and also Kefalonya, suffered the least damages from the crisis. This year was more successful for all these areas than the same 2009 season and the reason was that they were more flexible in terms of package prices.

Tags: EconomyMarketsTourismThomas CookVictoria MindovaHotelsPricesBankruptcies
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