Greece Hospitality Conundrum: Is Airbnb the Real Enemy of Hoteliers?

Alexandros Vassilikos, who’s President of the Hellenic Chamber of Hotels, is calling a solid framework to regulate the activities of the short-term rental market in Greece. On the opening day of the Xenia 2019 exhibition, one of Greece’s most successful hoteliers presented the forum and the Greece Hospitality with a unique potential. Here’s my take. aaa

Speaking at the opening of the chamber’s 3rd International Hospitality Forum in Athens, Vassilikos cautioned attendees about the negative aspects of “uncontrolled” short-term leases. While professing the chamber’s support for a “free economy,” the hotel expert also laid down the gauntlet for Airbnb and the “distortions” hotel competition indicates.

The Owner & CEO of the Airotel Group of Hotels, Vassilikos is one of Greece’s most successful hotel entrepreneurs. However, it’s clear he’s taking a hotelier-centric approach to the whole shared economy Airbnb short-term rentals represent. As he should. However, the answers for hoteliers and for the Greek hospitality market are not just a regulatory problem. The whole complexion of Greece tourism is the issue. Vassilikos is a brilliant guy, he admits there is “no turning back the technological clock” of hospitality evolution. He’s quoted by GTP:

“At the end of the day, the success of every hotelier, every hotel, is a benefit for the development of every local economy, for the cohesion of every local community.”

This hotelier-centric approach of Vassilikos’ brings with it great merit, as well as detrimental bias. The Airotel owner hits the nail on the head when he talks about competitive advantages and shielding hotels in a girdle of “quality and sustainability.” The problem for hoteliers in Greece and internationally is that they are not rising to the right challenge. Most hotel owners see Airbnb as the enemy when in reality short-term vacation rentals represent the best quality and sustainability – for many travelers. Note I said, “many” and not “all”.

The problem for hoteliers and the wider sectors of the economy is that growth will come to an end sooner or later. But investors and hoteliers have acted as if Greece has unlimited space and potential. This is simply, not the case. The only real way to a sustainable future is by revamping and coalescing what is already existent. Every day I read about some politicians seeking outside investment to build something new. Seldom is there news that a hotelier like Vassilikos has either drastically upgraded current amenities, or recreated something with outside the box thinking. It’s as if the hospitality industry forgot what vacations were all about.

When I was a kid, a million years ago, our family vacationed at somebody’s seaside apartment. Those are the memories I carry with me, not the ice machine at the Holiday Inn on some overcrowded beach. And herein lies the rub for Vassilikos and all the rest. People like me, maybe half the population of the western hemisphere, they’re seeking a different experience. It’s the other half that Greek hoteliers need to worry about.

The all-inclusive or city breaks enthusiasts who hate cooking their own breakfast. The problem is, Airbnb is not the enemy, hotelier thinking is. Short version, there are too many beds in Athens already, and somebody is thinking about adding more. Hospitalers want the whole pie, and they want the pie to get bigger and bigger. Somebody, please tell me how that is sustainable?

Look at the session of this conference entitled “Rethinking Hotel F&B: Stop thinking of hotel F&B as hotel F&B.” Moderated by Maria Theofanopoulou, CEO, Greek Travel Pages (GTP), the session featured Tim Ananiadis, General Manager/Managing Director, Hotel Grande Bretagne & King George; Thomas Douzis, Co-Founder and CEO, ERGON Foods; and Dr. Cindy Y. Heo, Associate Professor of Revenue Management, École hôtelière de Lausanne. In this segment brilliant people asking the right question. But, I am not sure they have the “outside the box” answers. Food and beverage should be a core value of most hotels. However, this is not about making a cheaper or bigger buffet. It may be about keeping the lobby bar/lounge open past 11 p.m. (Poke at Alexandros from our last Airotel visit)

What about new kinds of accommodations? How about serving well the clients who prefer hotels? And marketing? What about those direct bookings that ensure a higher RevPar? The hotelier associations of Greece should be talking about a higher level of revenue generation, a more profitable one. Instead, convenient enemies like the guy renting his villa demand attention.

It’s a stupid battle when you think about it. You have a couple of thousand hotel owners versus anybody who wants to make money off their second home. It’s a battle where I’ll take the Airbnb team every time. If the citizen owner is not pissed off at hoteliers, then the guests who enjoy these short-term rentals will be. Sustainable hospitality is not just about dropping energy or water usage, it’s about community and new ideas to sustain markets. Sustainability has to be about much deeper economics. I fear the word is just that for most hotel businesses, a public relations move by hotels without a public relations department – hotels who turned to marketers for advice on communications.

Sustainable hotels and Airbnb rentals must be inextricably linked to sustainable tourism, which must, in turn, be totally against overtourism. Here are some definitions from Dr. Rachel Dodds’ Sustaining Tourism effort. I won’t delve into Dr. Dodds’ work here, but I do want to bring up something called “power asymmetry” withing the Greece hospitality. A paper from 2013 entitled “Innovation and sustainable growth measurement in the hotel industry: A hierarchical decision-making model,” supports some of my contentions (PDF).

The paper discusses how boutique and small hotels can compete with the Hiltons of the world with innovative sustainability. It also talks about Turkish hotels, and how they are perfecting their growth strategies based on competencies. In other words, from the microeconomic standpoint. Of particular importance is the section on foreign investment and its long-term effect on the labor pool. This is something Alexandros Vassilikos and the others are discussing, while Greece’s politicians are selling Greece to the highest outside investment bidder in order to boost growth. You don’t have to be an economist to understand what’s going wrong here.

Finally, in any economic sector, there should be winners and losers. The Greece hospitality players who innovate best should be the ones that survive. And woe is the day the hardheaded hotelier wakes up to Airbnb partnerships in between local entrepreneurs. Here on Crete, the day may soon come when residents figure out most big hotels are hurting more than helping locals. The whole F&B issue will become a sore spot for hundreds of taverna owners on this island and others. But, I could go on and on. The point is, Airbnb is not the worst enemy of the hotelier, stagnant thinking is.

To be continued…

Feature image: 1950s Unlimited