Number of small budget hotels dwindling
Three in four Greek hotels belong in lower categories of one to three stars, representing 50% of the country’s total capacity in terms of rooms, according to data from the Institute of Tourism Research and Forecasts (ITEP) of the Hellenic Chamber of Hotels.
More specifically, Greece has 210,000 one-, two- and three-star hotels, which account for 74% of the total number of units and 47% of the country’s rooms. What’s more, the number of small budget hotels is declining, especially in the lower two categories, as units are either closed down, sold or in some cases upgraded by their owners, usually using their own capital, as bank credit tends to be hard to come by for such small businesses. In fact, according to ITEP’s report, the number of two-star hotels decreased by 28% and one-star hotels by 20% in the 2013-2023 period.
These hotels may have up to 50 rooms, though the average for three-star units is about 35 rooms, for two-star units 26 rooms and for one-star hotels 19 rooms. These are small units that, nevertheless, accommodate a disproportionately large portion of international arrivals, especially Greeks who choose them for their vacations mainly due to their lower prices.
Their geographical dispersion is indicative: 22% of two-star hotels and 20% of three-star hotels are concentrated in the Southern Aegean and 29% of one-star units are in Central Macedonia.
With a small number of rooms and low prices, they obviously have a lower turnover than their higher-category competitors, yet in 2022, they invested in repairs, renovations and maintenance amounting to €621.21 million or a percentage greater than 10% of their turnover, ITEP’s data showed. This is much higher proportionally compared to four- and five-star hotels, where such expenses range from 5.9% to 6.4% on average.
