Sani Resort chief says this year has proven Greece has a great tourism future, despite its economic woes. By Lee Hayhurst
The chief executive of Sani Resort in Halkidiki says tourism’s resilience in the country has been remarkable, as Greece targets a €6 billion increase in annual income from the sector to €20 billion by 2020.
Dr Andreas Andreadis said this month’s VAT hike on restaurants and hotels from 5% to 13% would be absorbed by hoteliers, but a crackdown on properties using the likes of Airbnb to avoid tax was expected in return.
Andreadis expected the VAT rise to hit firms’ bottom line but Greek hoteliers would look for government assistance, whether tax breaks or easing of regulation, to help them continue to invest.
“We have to overcome this VAT issue,” he said. “It would be a strategic mistake to pass this VAT rise on to the customer.
“The momentum we have seen will be stopped, which will create issues for Greece. Tourism has performed impressively in the past three to four years, despite all the issues Greece has faced.
“If Greek tourism shows this level of performance and resilience in these times, you can imagine what it can achieve in a more normal situation when the economy is growing.
“I think there is a real golden future for Greek tourism.”
Andreadis is chairman of Greek Tourism Confederation (SETE), which has appointed KPMG to investigate hospitality providers that are avoiding tax.
He said in July that test bookings had identified 1,000 villas and apartments considered likely to be operating illegally.
“The key is to force everyone to comply with tax rules,” he added.
“In the EU, there are strict anti-competitive regulations, so subsidies are not on the table, but there are many ways in which small businesses could be helped to offset the impact of VAT.”
Speaking before the recent snap general election that led to anti-austerity party Syriza returning to power, Andreadis said what Greece needed most was political and economic stability.
The Greek econony has shrunk by 25% during the economic crisis, and is predicted to contract by a further five percentage points.
Andreadis points out the British economy shrank by 20% after the Second World War, which resulted in prime minister Winston Churchill losing the next election.
“How can you expect any prime minister to handle this level of recession?” he asked.
However, Andreadis is convinced Greece’s future lies within the eurozone, despite the demands from creditors such as the European Commission, and the inability to control its own currency.
“People don’t understand that Greece needs to be under the protection of the eurozone to mature politically,” he added.
“The main issue is our political structure and culture. We need to understand that the free lunch is over – we cannot borrow for ever.
“This is far easier to do when you can get guidance from your lenders, rather than doing it alone in a drachma situation.”
Greece has the third-highest income per capita from tourism in the world and this year is set to record a record number of visitors, breaking the 25 million mark.
Within five years, the country aims to have increased annual tourism income to €20 billion, representing another five percentage points on GDP and creating 300,000 more jobs.
Andreadis said the Greek tourism sector was the world’s 15th largest and ranked 32nd globally for competitiveness, compared to the country as a whole which is 82nd.
“What tourism has achieved has been remarkable over the past five years – it’s become far more competitive. The tourism industry is leading the way,” he said.
“Greece is the world’s 41st-wealthiest country, so you cannot also be 82nd for competitiveness. Something has to give.
“We cannot become a country of 10 million people with debts of €300 billion. How can you have people impoverished on monthly incomes of €300 and provide high‑quality tourism?
“You cannot have all-inclusive ghettos. People love Greece because they mix with the locals.”
Sani Resort, which was established by Andreadis’s father 40 years ago, remains hugely popular with Brits, who accounted for 38% of guests last year.
This year, a 20% fall in the number of visitors from Russia, the second-largest source market, has been negated by a similar rise in the number of British visitors.
The biggest single source of bookings is a strategic partnership with The Vertical Group’s Your Holiday Booking, which accounts for 20% of its business.
Andreadis said the partnership, under which Your Holiday Booking markets the resort in the UK online and through its agents, offered Sani the advantages of trade distribution and a direct-sell channel.
“I’m surprised that other big hotel chains don’t develop similar relations with companies such as Vertical,” he added.
“It combines all the knowledge of a specialist operator in the UK with agents who are knowledgeable, so customers understand the product, and it’s quick to [get us to] market. It’s like a direct booking.
“You have to keep a balance [between direct booking and indirect]. Rate parity is the secret and protecting your network is extremely important. But people get greedy.”
Sani Resort has tried to set up similar arrangements in countries such as Germany, but found agents had less flexibility than in the UK, as well as struggling to find the right partner.
The Your Holiday Booking partnership has allowed Sani to address an over-reliance on Tui and Thomas Cook.
Asked if Sani would consider becoming an exclusive operator property, as Aphrodite Hills in Cyprus did with Tui’s Sensatori last year,
Andreadis said: “Hotels branded by tour operators make total sense for the operators themselves; they need integrated product to protect their margins.
“But the weakness is they cannot give us the scale. As an owner, you provide the services the operator requires – it’s not possible to go above that quality. What you can do is limited.”
Next week, the industry will focus on Greece as 500 delegates gather in Costa Navarino for The Travel Convention.
Andreadis said the event will be a boost ahead of next summer.
“It’s a real opportunity. I’m sure it will be a success,” he said.
“We will create something special for them.”