Greece Hotel Units in the Red

Greek hotel owners seem to be unable to pay back the loans they’ve taken out, according to Bank of Greece (BoG) deputy governor Theodore Mitrakos, placing the industry among the top 10 sectors receiving the largest share in bank financing.

Speaking at a day event titled “Business Loans in the Red and Greek Tourism”, Mr Mitrakos said that out of a total of 7.6 billion euros in loans granted to tourist accommodations, approximately half (49.8 percent) have been recorded as non-performing (NPL).

According to September 2015 BoG data, 20.2 percent of the loans issued are considered non-accrual, 19 percent are in arrears and 10.6 percent are already default loans, while 50.2 percent of the total of 7.6 billion euros in loans are stated as performing loans.

Mr Mitrakos underlined that banks and companies have already renegotiated loans of about 2 billion euros, a small percentage of which faces future problems.

Greece’s accommodation sector, particularly hotel units and rooms for rent, are performing below average with the sector having absorbed nearly 6 percent of total bank credit granted to businesses.

The day event was one of three workshops organized recently by the University of Athens’ Jean Monnet European Center of Excellence for its ongoing “Contemporary Trends in Tourism in the EU and Greece” program.

The events brought together sector professionals, experts, academics and banking officials who explored the financing demands as well as the repercussions of the deepening refugee crisis.

“Greece must focus on key areas which promise immediate returns so as to reverse the situation. Tourism is the leading industry that can secure such rapid returns and therefore should be treated as a national priority so that we can finally exit the crisis,” said Giannis Valinakis, president of the University of Athens European Centre of Excellence.

The event was attended by sector professionals including Yiannis Retsos, president of the Hellenic Federation of Hoteliers (POX) and vice president of the Greek Tourism Confederation (SETE), secretary general of SETE George Vernikos, Aldemar Resorts vice president Alexandros Angelopoulos, and Thessaloniki Hotels Association president Aristotelis Thomopoulos.

Founded in 2000, the Jean Monnet European Centre of Excellence is active in research and education on European issues.