Summer Outlook: Greece Ready for Hosting Conferences and Incentives

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Athens.- The Hellenic Ministry of Culture and Tourism in collaboration with the Hellenic Association of Professional Congress Organizers HAPCO, assures that Greece remains a safe and affordable destination for conferences and incentives, despite current economic restrains.

All strikes and protests that took place in the first days of May 2010 in Athens, were definitely limited in a relative restricted area in the centre of the city. Moreover, no such demonstration occurred nor affected, any of the traditional tourist destinations throughout Greece.

The typical calm atmosphere is back along with the renowned nice Greek weather. Despite momentary difficulties, the Greek conference market is still strong. Its product is highly competitive with a clear ‘value for money’ orientation and with the very well known disposition of Greek Professional Congress Organizers. We do not only guarantee, but we also look forward to assist overcoming any further challenges.

HOSPITALITY PERFORMANCE

According to the GBR Hospitality Quarterly Newsletter, on Greek hospitality industry performance for 1st quarter of 2010, international arrivals during Q1 at Athens airport decreased by 3.0%. Thessaloniki Airport saw an increase of 12.5% compared to last year’s Q1 but this is probably due to the fact that Thessaloniki Airport does not distinguish between domestic and international arrivals and the former increased sharply due to the forced closure of the Athens – Thessaloniki motorway at Tempi for a few months. Arrivals at all Greek airports also increased by 2.8%. In April, however, figures deteriorated sharply, largely due to the early Easter which discouraged foreign tourists from coming to Greece as well as due to the closure of the European airspace due to the volcanic ash from Eyjafjallajokull in Iceland which led to many cancelled early holidays.

The performance of the hospitality industry during the first quarter showed marked deterioration for Athens and Thessaloniki, though not for the Resort Hotels which, during Q1, were of a non-seasonal operation. Athens overall RevPAR decreased by 7.0% in Q1, Thessaloniki by 12.9%, while (non-seasonal) resort destinations had an overall increase of 12.8%. However, April was very bad for resort hotels (which now also included a significant number of seasonal hotels) mainly due to airport closures caused by the volcanic ash and early Easter which discouraged holiday-makers to fly to Greece.

The opening of the Met Hotel in Thessaloniki has improved the hospitality infrastructure of the city; however, the addition of 212 rooms in the 5* category supply, making it the second largest hotel in the city, has put pressure on occupancy and rates overall.

Due to the early Easter many seasonal resort hotels have delayed their opening, not only because demand for Easter holidays was reduced but also because of the long time gap between Easter Holidays and the beginning of the spring/summer holiday season.

Although the impact of the eruption of the volcano Eyjafjallajokull in Iceland was largely negative, it also had a positive impact for some hotels (particularly in Athens) whose customers extended their stay until the opening of the airports and/or where stranded tourists checked-in while waiting for airports to open again.

The comparison of the performance of Athens, Thessaloniki and Greek Resorts with other comparable destinations shows their disadvantageous position. In particular, in April there was a reversal of the until then mostly negative trends to positive across Southern Europe, while in Greek hotels the negative developments became more pronounced and included the resort hotels as well.

Airtraffic controllers’ strikes in April caused significant cancellations as well.

Things to consider for the next Quarter

* Last minute reservations are expected to limit the poor performance of resort hotels compared to last year’s performance.

* The avoidance of further violent demonstrations in Athens and extensive, and often unfair, coverage of them in the international Press and Media will further help redressing the ground lost so far this year.

* Athens hotels should get a major boost during the biennial Poseidonia shipping exhibition in June.

* The opening of the Athens seafront will boost the city image as a city break destination.

* The Greek Government has announced the lifting of restrictions on manning cruise ships (‘cabotage’ rules). The draft law keenly awaited by the tourist industry was submitted last week and all new ships were able to dock without any demonstrations.. Due to these rules and despite the Greek seas being a favorite for cruises – there are over 1,000,000 passengers in the Greek seas annually, only 6.5% of European cruise passengers originated from Greece while Italy benefited by 60%. Athens hotels and the Athens airport are expected to be the main beneficiaries of the much anticipated liberalization.

* The further increase of the VAT on hospitality services to 11% from July 1st, 2010 (from 9% at the beginning of the year) will have a negative impact on the profitability of the industry overall, particularly in combination with the price reductions taking place due to current market conditions.