| Journal: TWUK | Section: |
| Title: | Issue Date: 12/06/00 |
| Author: | Page Number: 13 |
| Copyright: Other |
Fighting for accommodation has pushed up next year’s prices on some Greek islands by more than 20%. This will have a devastating effect on these small resorts
Fighting for accommodation has pushed up next year’s prices on some Greek islands by more than 20%. This will have a devastating effect on these small resorts
Noel Josephides
Our contracting in Greece for next year is well under way and I do not like what I hear.Prices are being forced up dramatically by companies that are expanding and need to pick up accommodation at any price. On some islands, prices are being pushed up by over 20%.
These companies will have to sell cheaply in order to sell all the extra volume they have taken but at the same time, they are paying more for the beds.
I wonder where it will end? As long as they are expanding, there is no problem. It’s when we hit a bad patch that the too thin margins bite back.
This is not the first time we have gone through this in Greece. At the moment, the country is flavour of the month, which means too much capacity and too much irresponsible contracting for next year. We just have to sit through the cycle as we have done many times before and wait for it to run out of steam.
The cheaper companies are moving into Kefalonia and, this year, there is too much capacity there. Skiathos has also been hit.
Some islands are changing rapidly now and it becomes harder year by year to find those pockets of calm which appeal to our clientele. Operators are moving into areas which cannot take the volume. It doesn’t do any good to a destination when you force feed clients into it.
We are all looking for new resorts because our traditional haunts are getting oversubscribed and margins thinner. However, a new area takes years to develop. In the meantime, existing operators featuring that area lose some business to the new entrant. And then the new entrant, hoping to cash in on a different revenue stream, is disappointed because it’s just not working fast enough.
At the moment, we are all looking for fresh green pastures and I have no doubt most of us will be disappointed.
A perfect example is the fate of the Magic of France programme. I noticed that, in the same edition of Travel Weekly Thomson announced it was axing the programme, it won the award among agents for the best programme to the country.
The reason given by Thomson is that the programme did not achieve critical mass. Over the last three to four years brochures on France have proliferated but the market has not really grown. In fact, the market has not really grown substantially for any of us. We are simply taking bookings from one another.
Fifteen years ago, probably more, when we started featuring pousadas and manor houses in Portugal, there was a good steady stream of bookings. Growth has now stopped and we are just treading water. Every Tom, Dick and Harry now features flydrives to manor houses and pousadas in Portugal and everyone is getting a smaller slice of what is a very slowly growing cake. There is no freshness in that market any more, no sparkle.
So, we all hang on until one day one of us gets fed up (like Thomson has done with Magic of France) and just calls it a day. We are all dabbling in everything, hoping we can hit a rich vein of revenue. If anyone finds one, let me know!
“Everyone is getting a smaller slice of what is a very slowly growing cake. There is no freshness in the market any more, no sparkle.”