Study: Lower Category Greek Hotels Need Access to Funding Programs for Upgrades

ITEP President Konstantina Svinou, Hellenic Chamber of Hotels President Alexandros Vassilikos and ITEP Scientific Researcher Sofia Panousi.

Lower category hotels in Greece, which are mainly frequented by domestic travelers, need access to funding programs and grants in order to meet the challenges of their quality, technology and energy upgrading, the Hellenic Chamber of Hotels said on Wednesday.

Citing data from a study by the Institute of Tourism Research and Forecasts (ITEP), the chamber’s president, Alexandros Vassilikos, said Greek hotels of 1-, 2- and 3-star categories must have the same opportunities and the same financial tools as 4- and 5-star hotels in order for them to make the necessary sustainable improvements to keep up with the times.

1-, 2- and 3-star Hotels: 74% of Greece’s total hotel capacity

Data from the chamber’s registry reveals that Greek hotels of the three lower categories represent 74 percent of Greece’s total hotel capacity and 47 percent in terms of rooms. The vast majority of 2 and 3 star hotels have up to 50 rooms.

More specifically, of Greece’s 10,000 hotels, 1,185 belong to the 1-star category (11.8 percent), 3,313 to the 2-star category (33 percent) and 2,919 to the 3-star category (29 percent), while the total of their rooms exceed 200,000. The average size of 3-star hotels is about 35 rooms, 2-hotels 26 rooms and 1-star hotels 19 rooms.

“The hotels of lower categories, all the way from Tzoumerka to Nisyros, are the backbone of Greek hospitality and are the ‘guardians’ of local tradition that make a significant contribution to the local economy and employment,” Vassilikos said.

Greece’s distribution of hotels based on category – 2023.

According to ITEP’s findings, the specific hotel categories make a significant contribution to local economies and the local job market.

Greek products consumed by 1- to 3-star hotels amount to 90-94 percent of their total purchases, with 38 percent of these products coming from producers within the prefecture the hotels are located. Also, 86 percent of employees in 2-star hotels and 76 percent in 1-star hotels are locals.

It is noteworthy that the hotels of these categories attract a higher share of Greek visitors compared to higher categories, which shows that they also support domestic tourism needs.

According to the data, 22 percent of 2-star hotels and 20 percent of 3-star hotels are concentrated in the South Aegean Region. Twenty-nine percent of 1-star hotels are concentrated in Central Macedonia.

The vast majority of 2- and 3-star hotels in Greece have up to 50 rooms, according to the data presented by ITEP Scientific Researcher Sofia Panousi.

Solutions for green transition, energy and technology upgrading are too expensive

Greece’s lower category hotels spend a significant percentage of their turnover on repairs, renovation and maintenance but also on energy saving actions (3-star hotels spend more than the national average) and ITEP’s findings reflect their intention for further modernization and upgrade.

However, the high cost of efficient solutions for green transition, energy and technology upgrading is the main obstacle for such investments to be carried out in these hotels, which is why the chamber considers the launch of appropriate funding programs and grants necessary.

ITEP Scientific Researcher Sofia Panousi presenting the main problems Greek hotels of the two lower categories face.

17% do not have a website

It also should be mentioned that 83 percent of 1- and 2-star hotels have a website compared to 98 percent of the average for the other three categories.

According to ITEP, these hotels have expressed interest in acquiring modern management systems, however the need for further technology upgrades remains high.

Regarding the main problems faced by the hotels of the two lower categories, high operating costs are at the top, followed by competition from short-term rental accommodation and rooms for rent and the short duration of the Greek tourism season.

Vassilikos: Their upgrade will boost the quality of the tourism product

ITEP President Konstantina Svinou, Hellenic Chamber of Hotels President Alexandros Vassilikos and ITEP Scientific Researcher Sofia Panousi.

“The results do not mean that these hotels must become “five stars”, but that they should fulfill specific quality criteria to contribute to the overall quality upgrade of our tourist product,” Vassilikos said when commenting on ITEP’s findings.

“We are obligated to support the hotels of these specific categories when we want to offer a full quality product, especially when we are talking about half the rooms in the country,” he said, reminding that Greek hotels of the three lower categories represent 47 percent of Greece’s total room capacity.

“Ensuring that lower category hotels have access to funding programs is fully consistent with the aims of the country’s tourism policy for an extension of the season and also for tourism development in sustainable terms. In order to achieve these goals, 1-, 2- and 3-hotels must also have the available tools for their quality upgrade, digital and energy transition,” Vassilikos added.