Galery

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Another increase in the average indicator of VAT is expected by the end of the month, which is imposed on hotel and tourist services. Its value was 9% at the beginning of the year and then it rose first to 10% and now it is 11%. The VAT you pay will be 13% from 2011 on. What does this increase mean for the hotel business?

This is a serious problem. Prices are not so flexible. Most hotels in the country have reached the limit of their financial capabilities. Any additional burden on the expenditure side of their budgets will reflect very negatively on the hotel business. We are now only trying to earn enough for the costs to keep the business alive. Any additional increases will put many hoteliers in the red zone.

There was a message in the media this week that six old hotels in Athens have ceased activity. I would like to ask you why hotels go bankrupt in a tourist capital such as Athens?

Because of the crisis. In fact five hotels have shut down and the sixth is to close by the end of the year. The hotel business has expenditures, large though – you have to rent a building, then to repair it and of course to cover not only operating costs but also to repay the credits for this whole business. The moment the prices fall more than expected and costs can not be covered you close the hotel in order not to incur additional losses.

About 50 percent of the hotels only in Athens are in buildings not owned by the entrepreneur, but rented. Rent payments are one of the biggest costs of the hotel business in the capital. In many cases, even if the owners of the buildings are ready to make a rent rebate, it is not enough to keep the business.

Do you think the fall in turnover is due to the reduced number of tourists?

The problem is the price level. We sell cheap in Athens. Of course, we have a little less tourists this year, but they are also cheaper. The combination of these is the reason for lower revenues.

Do you support the idea of the Hellenic Chamber of Commerce a uniform VAT of 15% to be introduced? In other words, we will benefit from some things and loose from others. What do you think about the proposal for reducing the main VAT value of 23% and all goods and services which directly or indirectly affect you be charged 15% VAT?  

You should ask the economists in the country. I think that 11% VAT is recommended before any other higher value. But what is most important in relation to VAT is what other countries competing Greece in tourism are doing with the VAT. VAT on tourism in Turkey is 8%, the level in Spain is almost the same as in Turkey, and hoteliers in France and Cyprus pay only 5.5% VAT. It is logical that we should do something in Greece but most likely it is not to increase VAT again

You mentioned Turkey and I would like to ask you do you think that our eastern neighbor has become a dangerous competitor to Greece over the years concerning tourism?
 
I don’t think so. Turkey is dollar destination and it has always been cheaper than Greece. Now things are almost equal. There is no big difference in prices and each country has its own tourist flow.

What is the role of government in tourism development? However, this sector contributes directly and indirectly about 20% of GDP each year.

Hoteliers themselves are trying to do whatever they can to compete on the market, but it is important the offered package to be attractive. So, we are not just talking about hotels. When tourists arrive in Greece they will come down at the airport, use the highway, the ferry and the public transport. This whole package should be of high quality, comfortable and attractive. The state is to guarantee the high level of these services throughout the country. Speaking of Athens, I think that measures should be taken to improve infrastructure and reduce traffic so that the city becomes more comfortable and easily accessed by tourists, and safer. Ports need to be improved. Museums need to be opened longer. The state plays an important role in tourism development and all these details together create the face of the country.