Hotel capacity stagnates as short-term rentals expand, Greek hoteliers warn

Speaking in Thessaloniki on the occasion of POX’s participation in the international tourism exhibition Philoxenia, Mr Hatzis warned that, despite the sector’s positive performance in terms of arrivals and tourism receipts, the conditions required to sustain tourism growth over the next decade are not being established.

“We are not seeing any alarming signs regarding the performance of tourism in 2027. However, there are worrying indications that, under the policies currently being pursued, Greece will not experience another period of tourism growth over the next ten years,” he said.

His criticism focuses primarily on the Special Spatial Planning Framework for Tourism and the rapid expansion of short-term rentals, which, in his view, are reshaping the market and restricting opportunities for the expansion of organised hotel operations.

One Million Short-Term Rental Beds and Growing Restrictions on Hotels

In particular, the POX president argued that approximately one million short-term rental beds have been added to the market since 2018, while hotel capacity has increased by just 3%, reaching approximately 800,000–850,000 beds.

Combined with the restrictions arising from spatial planning regulations, this development is creating an environment in which the construction of new hotel units is becoming increasingly difficult, particularly on the Greek islands.

As he noted, the proposed restrictions on the size of new hotel developments could discourage investment, as they may undermine the financial viability required to develop hotels in destinations such as Rhodes.

“Kalamata cannot become Rhodes in two years, nor can Corinth become Crete in three,” he remarked, questioning whether further tourism growth can be achieved without new investment in organised hotel infrastructure.

He was particularly critical of the study underpinning the new spatial planning framework. According to Mr Hatzis, the study cost just €50,000, yet it will largely determine the investment environment over the next decade. He believes its provisions pose significant risks to the spatial development of island destinations.

More Arrivals and Higher Revenues, but Per-Capita Spending Remains Stagnant

At the same time, the quantitative growth of tourism is not being matched by a corresponding increase in the economic contribution of each visitor.

For 2026, according to estimates presented by the POX president, international and total tourist arrivals are expected to increase by approximately 4% compared with 2025, while tourism receipts are projected to rise by around 10%.

However, average per-capita visitor spending is expected to be slightly lower this year, a development linked, among other factors, to the length of visitors’ stays in Greece.

As Mr Hatzis pointed out, average tourist spending has remained virtually unchanged for approximately 15 years, meaning that rising arrivals are not translating into a proportionately greater economic contribution per visitor.

One of the main reasons, in his view, is the substantial supply of lower-cost short-term rental accommodation, which generally offers lower prices than hotels. Meanwhile, the growing importance of road tourism is also affecting the overall picture of per-capita spending.

Road Tourism and Illegal Rental Accommodation

The POX president argued that visitors travelling to Greece by road often come from markets with lower GDP per capita, spend less than those arriving by air and tend to stay in the country for shorter periods.

He also referred to the large number of accommodation properties that, according to his claims, are being rented out illegally, particularly in Northern Greece.

As a characteristic example, he cited villas in coastal areas around Alexandroupoli and Kavala, which have been purchased by Balkan owners and are rented to visitors from their countries of origin.

According to his account, in certain cases these visitors even purchase their groceries from supermarkets in their home countries, meaning that only a limited proportion of their overall tourism expenditure flows into the Greek economy.

Similar practices, he added, have also been observed in areas of Pieria and Halkidiki, describing the phenomenon as “organised crime”.

What the Industry Expects from 2027

Regarding the next tourism season, Mr Hatzis struck a relatively reassuring tone despite ongoing geopolitical uncertainties.

As he explained, current flight schedules from Greece’s main tourism source markets indicate a slightly lower number of scheduled flights for 2027 compared with 2026. Nevertheless, the difference remains limited and is not expected to have a substantial impact on bookings. He also left open the possibility that next year could ultimately prove more successful.

Commenting on geopolitical developments, he noted that travel decisions are not necessarily affected by every new crisis, particularly when events occur some time before the holiday season.

He cited Poland as an example, where, despite the war in Ukraine and attacks on Lviv, charter flights continued to operate with high occupancy rates, even in areas relatively close to the conflict zone.

“Everything has an impact, but over the past few years people have, to some extent, become accustomed to crises,” he said, arguing that geopolitical instability does not automatically translate into cancellations or changes to travel plans.

POX’s Position on Overtourism and Taxation

The POX president also rejected the view that Greece is facing a widespread problem of overtourism, arguing that discussions about restricting tourism activity fail to adequately consider the productive and economic contribution of organised tourism.

In his view, the more opportunities to develop new hotel units are restricted while the market increasingly shifts towards short-term rentals, the greater the pressure on local communities and residents of popular destinations.

“Organised tourism is a productive economic activity, and I cannot accept that this activity should be restricted without a serious justification,” he stressed.

Finally, he referred to the increased tax burden on hotel businesses, noting that taxation in the sector has risen by 250% over the past three years, while revenues have increased by 14%.

Despite these pressures, he emphasised that the hotel industry remains profitable and retains considerable potential for further growth, provided that a more favourable and stable environment for investment and development is established.