Airbnb eats… hoteliers

A well-known hotel owner in the hotel industry takes a taxi from the airport to his destination. On the way, he talks on the phone on business matters, and when he finally ends the call, the taxi driver politely asks him what his job is. Our friend replies that he works in a hotel. “And we are colleagues,” the taxi driver replies.

To a reasonable question from the hotelier “What do you mean?”, he replied: “I have five apartments on Airbnb,” implying that he also works in the hospitality industry, leaving his interlocutor open-mouthed. He adds that he doesn’t want to have more because he can’t manage them, and ends his speech with the following phrase: “This year you hurt us because you raised prices and scared people”!

This real fact reflects one aspect of the current situation in which tourism finds itself in the capital and beyond, as well as the competition that the hotel industry in Athens and throughout Greece is experiencing from the short-term rental market, which is expanding but remains unregulated.

average price
At the same time, the average price per room will decrease as the supply of “non-regulated units” with minimal commitments and costs, compared to organized hotels, will increase. That is why, in the run-up to the municipal and regional elections, hoteliers are trying to involve candidates for local authorities in the discussion on measures to regulate short-term rentals.

“We’ve got bookings, there’s an increase in visitors, but there’s no corresponding increase in occupancy because there’s an increase… the leak on Airbnb, hoteliers say. – In addition, prices may have risen, but at the same time, costs have risen exorbitantly due to inflation.”. In any case, they add, “Athens remains one of the cheapest capitals in Europe”.

It is a fact that this year Athens is experiencing the best year in its history as a tourist destination in terms of number of visits. In the first half of 2023, the number of international arrivals at the Athens airport for the first time in history broke the barrier of 10 million people, an increase of 6.9% compared to 2019, which was a record year for Greek tourism.

Occupancy rates
However, hotels are not reaping the full benefits of this growth, with a significant portion of bookings coming from the 11,049 short-term Athens hotels scheduled for July 2023 by AirDNA. This is an accommodation that has been booked for at least one day or has been available for a month.

The occupancy rate of the capital’s hotels in the first half of the year, according to the Athens hotel association Attica Argosaronic and GBR Consulting, was 73%, which is 24.1% higher than the occupancy rate for the same period in 2022 (an increase of 24.1%) and almost 3% lower indicators for 2019.

The average room rate/ADR was €129.75, an increase of 17% compared to the first half of 2022 and 26.5% compared to the same period in 2019. It should be noted that compared to 2019, about 1600 new rooms were added in the center of Athens, according to the Athens Chamber of Hotels.

However, hoteliers compare these figures with the rest of the European market. In terms of competing cities, June 2023 data shows: Athens is in the “quartet” of cities with the lowest room rates (Athens, Vienna, Berlin, Madrid).

At the level of the first half of the year, the average room rate/ADR in the capital reached 129.75 euros, an increase of 17% compared to the first half of 2022 and 26.5% compared to the same period in 2019.

In June 2023, it amounted to 175.92 euros (an increase in the average price per room / ADR of Athens hotels by 19% compared to June 2022 and by 40% compared to June 2019).

The corresponding average room rate in Istanbul in June 2023 is €185.42 (up 92.8% compared to 2019), in Barcelona €208.33 (up 19.9% ​​compared to 2019), in Rome – 307.33 euros (an increase of 68.8% compared to 2019), in Paris – 467.69 euros (an increase of 60.1% compared to 2019).

At the semi-annual level, the conclusions are similar, but Athens is even lower, i.e. in the “trio” with the lowest average price (Athens, Vienna, Berlin), since in Madrid the average price of a room for 6 months in 2023 was 146.04 euros (an increase of 25.5% compared to 2019). As noted by one of the hotel agents, Athens remains one of the cheapest destinations among competing cities.

Season extension question
In terms of booking progress for the coming months, market participants note that, apart from a brief hiatus in August when traffic is traditionally down, September is back with strong demand as many conferences are scheduled in the city during this time.

The question is what will happen from October, with the concern being how much tourism will be affected by the general economic situation and energy costs, which seem to be rising again.

However, short-term rentals are also in high demand. According to Madeleine Parkin, a public relations specialist for AirDNA, according to ot.gr, there are currently 39% more nightly rooms booked in Athens for September-December than in the same period last year (end of August). As with many other places this year, she adds, tourists seem to be planning trips outside the high season to avoid crowds, high prices and excessive summer heat.

It should also be noted that the average price of short-term housing in Athens this year increased compared to last year: in July it was 110.87 euros, which is 7.7% more than last year (July 2022 – 102, 97 euros).

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