Market Report Greece

GBR Consulting Reports Greek Hospitality Industry Performance 2nd Quarter 2016 (PDF Download)

  • The continuous growth of international tourist arrivals at the Athens airport from May 2013 has come to an end in April 2016, when a drop of 1.2% yoy was recorded. As a result, occupancy levels dropped from February 2016, but due to mild increases in room rates, RevPAR improved with 1.2% in Q2 2016. 

  • In Thessaloniki international arrivals at the airport increased 6.2% during Q2 2016, which had a positive effect on occupancy levels in the city, while room rates mildly increased. Up to June 2016 RevPAR improved 4.8%. However, the crisis in Turkey will affect tourism flows from Turkey to Thessaloniki and to Greece in general. For Thessaloniki the Turkish market is the second major source market after Cyprus in terms of overnight stays on the basis of 2015 data and latest available data of H1 2016.  

  • Overall, resort hotels have performed well so far during H1 2016, but there are major regional differences. Lesbos has been severely affected by the negative image of arriving refugees, but even though the situation has calmed down, tourists are staying away this year as indicated by the drop of 63% yoy of international arrivals up to June 2016. The island of Samos recorded a drop of 39% and Kos a drop of 18% over the same period.  

    On the other hand the 4 airports of Corfu, Zakynthos, Kefalonia and Aktio serving the Ionian islands recorded an increase of 10% in international arrivals up to June 2016 compared to the same period last year, while Crete received 11% more international arrivals, Rhodes 8% and Santorini & Mykonos together 16% during H1 2016 compared to last year.

  • Internationally, Madrid continues its positive course with an improvement of its RevPAR of 9.5% during Q2 2016, while Rome showed a small drop in RevPAR of 1.2% during the same quarter, as demand weakened from May onwards and in June room prices started dropping.  

    Cairo was on a track of recovery, even though the tourism industry in Egypt as a whole is severely affected by the attack on a Russian plane leaving the town of Sharm el Sheikh in October last year. However, the crash of an Egypt Air flight from Paris to Cairo in May 2016 and the hijacking of another Egypt Air flight from Alexandria were another major blow to the country's tourism sector including Cairo, which recorded a drop in occupancy of 28% yoy this June. 

Outlook

  • It is unclear how H2 of 2016 will develop as there are many uncertainties. According to SETE some major airlines schedule a reduction of the number of seats on some Greek destinations for 2017. 

  • In addition, increased taxation will impact the competitiveness of the Greek tourism product. The standard VAT rate increased from 23% to 24% as from 1 June 2016 and two groups of islands have lost a reduced VAT for tourist accommodation and are now paying 13%, like the remainder of the country. 

  • Finally, as per January 2018 an accommodation tax will be imposed as part of the austerity package passed in May, which will consist of a levy of € 0.50 - € 4 per roomnight depending on the hotel category.

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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.

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