GBR: Israel-Hamas War May Impact Tourism to Thessaloniki

Thessaloniki. Photo source: Unsplash.

Thessaloniki hoteliers may be faced with declining occupancy levels in the coming months as the Israel-Hamas war continues to affect Israeli tourist arrivals to the city, found a report released this week by analytics firm GBR Consulting.

According to the “Greek Hospitality Industry Performance 2023 Q3 (third quarter)” report which examines performance of the country’s hotel sector, Thessaloniki may soon be impacted by the war as the Israeli market is the northern port city’s leading international source market.

Indicatively, in 2022, Israeli travelers spent a total of 126,000 overnight stays and 186,000 in pre-Covid 2019.

Source: GBR Consulting.

At the same time, Israel is one of Greece’s most promising markets accounting for 1.3 percent of overnight stays in 2022.

“The war, which is currently three weeks under way, might not end soon and could therefore also impact the real estate market as well,” said GBR.

Demand for hotel stays in Thessaloniki dropped in the nine months to September compared to 2019 with occupancy levels down by 4.3 percent year on year. Room rates increased by 25 percent for the same period. Compared to a year ago, occupancy levels improved on very low occupancy levels in 2022.

Thessaloniki. Photo source: Unsplash.

Compared to Q3 2022, occupancy levels this year were lower. Overall, RevPAR improved in the nine months to September 2023 compared to both 2022 and 2019 by 24.0 percent and 19.5 percent, respectively.

Meanwhile, hotels in Athens registered a strong third quarter with stable occupancy levels compared to Q3 2022 and slightly lower levels compared to Q3 in 2019.

However, significant increases in average daily rate (ADR) were reported compared to both 2022 and 2019.

In the September 2019-September 2023 period, occupancy levels declined by 2.4 percent but average room rates increased by nearly 31 percent driving revenue per available room (RevPAR) up by 27.5 percent.

Source: GBR Consulting.

The report also reveals that Greece’s resort hotels reported a significant improvement in total revenues. According to a sample of 24,714 resort hotel rooms, total revenue generated in the April-September period increased by 14.0 percent compared to the same period in 2022 and by 38.6 percent over 2019.

GBR analysts add that the 2023 season started in April with significantly lower occupancy levels compared to 2022 and 2019, but a stronger supply of rooms. Occupancy levels for the April-September period dropped by 0.5 percent compared to the same months in 2022 and by 1.7 percent over 2019. Total sales per occupied room however increased by 8.5 percent compared to 2022 and by 44.2 percent over 2019.

Looking ahead, GBR analysts expect 2023 to be a record year for the Greek tourism sector, estimating that travel receipts could reach 20 billion euros this year including the cruise sector compared to 18.2 billion euros in 2019.