Greek hotels brace for fallout from debt crisis

Greek hotels are bracing for a public relations nightmare from the country's crisis with revenues expected to drop 15 percent this year as stays plunge 10 percent, industry associations said Tuesday.

Against an already "very difficult" backdrop, the president of the Greek Chamber of Hoteliers George Tsakiris regretted the tourism minister's resignation the previous day over her star husband's unpaid tax bill.

Hotels in the Athens region were suffering the worst so far from the economic crisis, according to Alexandros Vassilikas with the city's association of hotielers.

He said 27,000 overnight stays were cancelled after three people died on May 5 in a bank firebombed on the margins of a protest against austerity cuts demanded by the EU and IMF in return for a 110 billion euro (136 billion dollar) bailout.

Cancellations were not only "hitting May and June but also threatening conferences in 2011," he warned.

After a 6.4 percent drop in tourist visits in 2009 and a 15 percent fall in revenues last year, Greece's tourism industry is anxious about the fallout for the country's image from daily headlines about its debt crisis.

"There were recovery signs in January but after reservations took a hit when the crisis first set in, the drama in the bank totally held back everything," said Vassilis Menaidis of the Union of Rhodes Hoteliers.

"Tour operators are putting pressure on prices and demanding us to absorb the increase in value added tax" from 19 percent in March to 23 percent," he added.

Hoteliers also urged the Greek National tourism Organisation to pay 100 million euros owed to foreign media for publicity campaigns over recent years.

"It's a priority issue. We cannot ask people to whom we owe money to see us in a good light," said Tzakiris, adding that the previous government had begun addressing the issue in February 2009 before dropping the issue.

Vassilikas did not rule out that foreign media's frustration at not being paid was playing a role in negative coverage of Greece's debt crisis.