Hoteliers: how they increased their income despite pressure from Airbnb

In 2023, many more tourists arrived in Greece compared with previous years, and especially with 2019, but hotel occupancy levels have decreased slightly.

However, this did not stop hoteliers from achieving increase in revenue from the number, thanks the higher average tariff they were able to secure. The equation of more arrivals, less occupancy, more revenue has worked out positively for hoteliers as they finally recorded higher revenues at a time when operating costs appear to have risen due to rising energy costs and strong inflationary pressures.

Airbnb Pressure and Occupancy Rates

At the same time, pressure from short-term rental housing (Airbnb) is becoming increasingly evident. This was reflected in occupancy levels, which declined despite a strong increase in arrivals, which, including cruises, were estimated to top 35 million, up from 34 million in 2019.

The recovery in Athens hotel occupancy levels has stalled in 2023, despite demand in the capital reaching record levels, GBR Consulting notes.

Specifically, in 2023, compared to 2019, occupancy fell by 1.5%, while the average room rate (ADR) increased by 29% and, as a result, the average revenue per room (RevPAR) increased by 27%. . The upward trend in hotel rates began in June 2022, GBR reports.

In Thessaloniki hotels, overall occupancy remained below 2019 levels, but ADR improved significantly. Year-over-year in 2023 compared to 2019, occupancy was down 4.2% and ADR improved by 25%. Thus, RevPAR in 2023 increased by 19.7% compared to 2019.

A similar picture is observed at resorts, where in 2023 and 2022, between April and October, occupancy levels were slightly lower than in 2019. In 2023, compared to 2019, occupancy decreased by 1.8%, but total sales per occupied room increased significantly – by 45%. As a result, total sales per available room increased by 42%.

The decline in occupancy can be attributed to more hotels operating in 2023, but it is mostly due to a surge in short-term rentals.

Airbnb takes the lead

According to the annual report on Greek tourism prepared by the Institute of the Hellenic Association of Tourism Businesses (INSETE), in July 2023 there were 212,199 short-term rental properties in Greece, with 392,118 rooms and 939,167 beds. These figures compare with hotels, which have 10,087 units with 443,835 rooms and 885,624 beds. In other words, hotels are behind by 53,543 beds.

The forecast for the 2024 tourist season is positive. Last year showed that Greek tourism was not affected by high inflation, declining disposable income, a slowdown in the global economy and geopolitical conflicts. Following record revenues in 2023, Greece’s dependence on the tourism sector has further increased, and thus its vulnerability. Major challenges such as climate change and demographic changes will have a significant impact on the Greek tourism industry in the long term, so both issues require a long-term vision that goes beyond the 4-year political time frame.

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