Market Report Greece

GBR Consulting Reports Greek Hospitality Industry Performance 1st Quarter 2016 (PDF Download)

Big challenges ahead for the Greek economy

GBR Consulting

  • The Athens International Airport recorded an increase of 10.1% yoy in international arrivals in Q1 2016. 
  • However, this increase is not reflected in the occupancy of the Athens hotel sector as an improvement of only 3.5% yoy was recorded in Q1 2016. 
  • As depicted in the graph, the gap between international airport arrivals at the Athens International Airport (AIA) and occupancy levels in Athens is widening as from 2015 in terms of percentage change. The Athens Hotel Association contributes this difference to the booming sharing economy in Athens, where the supply on platforms like AirBnB is increasing at a rapid pace. In the winter periods the difference cannot be contributed to tourists leaving directly to the islands. 
  • In Thessaloniki arrivals at the airport in Q1 2016 were on par with the same quarter last year as drops in January and February were offset in March.  
  • In terms of international traffic at the Thessaloniki airport, Ryanair was market leader in 2015 with a share of 26%, followed by Aegean Airlines with 22% and easyJet with 7%. The top 3 airlines transported 55% of all incoming arrivals from abroad. 
  • Furthermore, the Thessaloniki hotel association revealed that Cyprus was the main source market with a share of 12% in terms of overnight stays at hotels in 2015, followed by Turkey with 8%, the United States with 7%, Germany with 6% and Serbia & Montenegro with 6%. In this top 5, Cyprus and the United States recorded double digit growth numbers compared to 2014, namely 12% and 15% respectively. 
  • International arrivals at airports other than Athens and Thessaloniki increased 37%, but only representing an additional 9,200 arrivals. 
  •  For those resort hotels that were in operation during Q1 2016 a drop of the total revenue per available room of 7.9% was recorded, compared to the same period last year. 
  • Internationally, RevPAR for South Europe improved with 6.9% yoy. Madrid had a particularly strong first quarter with an improvement of RevPAR of 15.6% yoy. 

Big challenges ahead for the Greek economy 

  • The first review of the third adjustment programme agreed last summer, is currently stalled. Intensive technical negotiations are continuing, but difficult reforms are still outstanding. These include another round of savings in pension entitlements, increased social security contributions, tax increases for farmers and the resolution of non-performing loans. 
  • In addition to the current impasse, the Greek Government also has to identify additional fiscal savings amounting to 1% of GDP to close the fiscal gap in 2017 and 2018 to achieve the current programme target of a primary surplus equal to 3.5% of GDP in 2018. 
  • Given the front-loaded nature of the adjustment programme, Oxford Economics expects GDP to fall by 1.2% this year and then to be broadly flat in 2017. Only in the final year of the programme a recovery is expected, contingent on Greece implementing the necessary structural reforms. 

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GBR Consulting is a leading Greek business consultant firm. GBR Consulting supports clients develop their businesses in a structured manner leading to growth. The firm offers their clients, who are mainly active in the tourism, retail, food, construction and energy sectors, lasting solutions in the field of strategy, marketing, organisation and finance, while also delivering litigation support.

GBR Consulting
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T (+30) 210 36 05 002
F (+30) 210 36 06 935
www.gbrconsulting.gr
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