Greek hotel owners are facing huge losses this year as Tui AG, the largest leisure, travel and tourism company in the world, is deferring the payment of monies due to them this year — until March of 2021.
The Anglo-German tour operator has issued several contract amendments requiring the hoteliers to hold off until March to receive three-quarters of the money due to them for stays made this year.
Speaking to Greek Reporter, Grigoris Tasios, president of the Hellenic Hoteliers Federation (HHF) estimates TUI’s total debt to hotels nationwide at 140 million euro, accumulated from August 2020 onwards.
“TUI’s contracts with Greek hotel owners were providing for repayment 60 days after invoicing. In contrast, the company announced to them at the end of October that they would either sign an agreement to receive 25% of the owed amount now and the remainder in March/April 2021, or get nothing,” he explains.
Tasios believes that Greek hotels will inevitably need state financing to overcome this newly emerging crisis.
Passed on to the hotels’ own financial obligations towards their employees and the state, the debt incurred from the breach threatens the sustainability of the affected Greek businesses.
Tasios is adamant that other tour operators, even smaller ones, which are also hit by the impact of the pandemic, are fully cooperating with Greek hoteliers to settle any outstanding debts on a reasonable timeframe.
“TUI is the only one, in our opinion, to have resorted to the above abusive process,” he states.
The HHF did not only flag the issue as far back as September, but also gave warning to policy makers in writing when the hotels had reopened in June, with the aim of preventing such incidents.
“At that moment when the Greek state, rightly, cut a deal to co-advertise Greece with a big tour operator like TUI, the necessary insurance policies should have been included, especially since we had requested in our correspondence for certain things to be brought to the table,” Tasios adds.
Reiterating that TUI received its second government stabilization package from the German state in September, the president of the HHF notes that there is obviously a financing gap at the Anglo-German tour operator and stresses that the company’s problem is international.
Fear of another Thomas Cook-style collapse
He believes that now it is too late for the situation to be resolved, and he prays that history won’t repeat itself with another bankruptcy in the style of the Thomas Cook collapse in 2019 — from which the Greek hotel industry still hasn’t recovered.
“We have discussed (the TUI issue) repeatedly with the Ministry of Tourism and Minister Theocharis himself. Although he does realize the extent of the problem, he states that those were private sector agreements between businesses. On the other hand, however, (state officials) should bear in mind that Greek hotel owners will be forced to ask them for help again.
“Given that the only aid that we hoteliers have in the pandemic is borrowed money, either through bank loans or in the form of repayable advances, one can understand how major the problem is and what an impasse we are at,” Tasios emphasizes.
While his colleagues haven’t even had their VAT and profits from their Thomas Cook deals written off yet, despite the respective provisions, he concludes that policies such as agreement guarantee funds should be considered by the Greek state once the country exits the pandemic.
“At a time when the country is fighting to save the health of its citizens, what the business world needs in its entirety is a survival fund, not recovery. First, it needs to survive — not just the hotels, but touristic businesses in general. Recovery only seems possible beginning in 2022.
“In the meantime, the financial and social fabric of Greece need to keep a good level and survive. And that leads to a non-repayable funding rationale,” Tasios states.