Hoteliers Against New Subsidies

Hoteliers are voicing strong opposition to a clause in the new investment incentives law that provides for subsidies of at least 15 percent for the construction of new hotels in Athens and Thessaloniki.

Gerasimos Fokas, the president of the Hellenic Chamber of Hotels, criticized the government, suggesting that never before have there been any subsidies given for the construction of new hotels in Athens, nor is this needed now, as the hotel sector in post-Olympic Athens is now fully modernized.

Such a prospect would be “perilous,” according to Mr. Fokas, as Athens and Thessaloniki have been attracting investment interest, new hotels open all the time and if demand does not grow a merciless price war is set to follow.

He added that, despite the objections by the chamber and other bodies, new five-star hotels have been subsidized in the country’s established tourism resorts. The biggest investment plans out of the proposals by the Greek National Tourism Organization concern five-star hotels mainly on Crete, Rodos and Kos. As many as 40,000 new beds will be created within the next two to three years in this category of hotels by the projects subsidized under the previous investment incentives law.

The operation of those new five-star hotels will create unbearable pressure on older hotels, with several of them finding it hard to adjust to the ever-more-competitive tourism market conditions, the head of Greek hoteliers argued.

Calculations by the Hellenic Chamber of Hotels show that the existing number of beds would require some 20 million tourists in Greece every year for occupancy to be at a viable level.

As we go to press, the country’s tourism minister, Fanni Palli-Petralia, and its minister of economy, Georgos Alogoskoufis, say together they will work on a way to cancel the legislation concerning subsidies for new hotels in the Athens and Thessaloniki areas.