The Greek tourist market is forecast to fall 20% year-on-year in occupancy rates from Q1 2009

Aug. 1, 2009 - PRLog -- The Greek tourist market is forecast to show further marked falls of 20% year-on-year in occupancy rates from Q1 2009. After relatively strong annual growth in foreign tourist arrivals of 8.5% in 2007, the report now expects slight negative growth in 2008. This is based on official data which record a marginal decline year-on-year (y-o-y) in the number of foreign tourists visiting Greece between January and October 2008. In addition, considering the wave of political unrest, which manifested itself in street violence across the country at the end of last year, this is likely to have had further damaging consequences for the tourism industry.

The Greek hospitality sector is experiencing a major downturn. Following sharp falls in occupancy rates in Athens and the greater Athens area at the end of last year, the most recent data for Q109 show further marked falls of 20% y-o-y in occupancy rates, with just 49% of rooms in three- to five-star hotels occupied over the period. This compares with 60% occupancy rates in Q108.

Forecast Scenario As recent data confirm, the Greek tourism sector is likely to face an extremely difficult year in 2009.

Moreover, in line with further downward revisions this quarter to the eurozone and UK real gross domestic product (GDP) growth forecasts - the key source markets - we have revised down our expectations for foreign tourist arrivals this year, and now anticipate even more marked negative growth of 14% y-o-y. We believe though that there will be a slight recovery in foreign arrivals next year, as the economic downturn in the most important markets bottoms out, but more significant recovery in arrivals is only likely to take place from 2011.

Athens International Airport Total passenger numbers at Athens International Airport (AIA) show a worsening trend. The most recent data are for Q109 and record passenger traffic down nearly 8% y-o-y, while numbers fell a marked 12% in March, compared with the same month in 2008. Most noticeably, the number of international passengers declined over 12% y-o-y in the first quarter and fell a considerable 16% y-o-y in March.

Olympic Airlines The long drawn-out process of privatising Olympic Airlines has finally been settled. In March 2009, the state approved the sale of Olympic Airlines' ground handling unit to Greece's Marfin Investment Group (MIG), shortly after it had agreed the sale of the carrier's flying and maintenance operations to the firm. The total cost for the carrier is EUR107.2mn (US$138mn).

Aegean Airlines Recently released 2008 financial results for Aegean Airlines show revenues were up a healthy 27% y-o-y to EUR611.7mn (US$899mn), resulting from a significant rise in international passenger traffic and high load factors sustained on both the domestic and international networks. The airline, however, recorded a net profit of EUR29.5mn (US$43mn), down 18% on the previous year. The fall in profitability was mainly due to a 54% annual rise in fuel costs that reached EUR148mn.

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