Square Lime’s review of the season highlights the differing performance of Greek tourist destinations during this year’s peak season, with Santorini facing greater pressure on hotel rates while Paros and Naxos maintained their positive momentum.
As Vasilis Lapanaitis, founder of Square Lime, the Greek boutique hotel and villa management company, told Euro2day.gr, the picture that had taken shape at the start of the summer was largely confirmed. Demand ultimately proved more resilient than it had initially appeared, but bookings were made much closer to arrival.
The picture, however, was not uniform across the market. As he explains, in some cases growth came mainly from higher average rates, in others from increased occupancy, while some markets required greater flexibility in pricing.
In particular, “Paros and Naxos maintained positive momentum”, as interest recorded earlier in the season ultimately translated into actual bookings. By contrast, pressure was more pronounced in Santorini, particularly on average rates, making greater adjustments to hotel pricing necessary to support demand.
“Travellers are much more rigorous in assessing the relationship between price and experience. They are not necessarily looking for the cheapest destination. They may be willing to pay a high price if they feel the overall experience justifies it”, he says, explaining that the shift is more about the relationship between price and value than a general move towards cheaper destinations.
“I would not describe it so much as a shift from ‘expensive’ to ‘cheap’ destinations, but rather as a shift from price to value. Travellers now consider the whole trip — accommodation, dining, transport and experiences — and that is ultimately what determines each destination’s value for money”, he adds.
17% of revenue from last-minute bookings
One of the defining features of this year’s season was a significant shortening of the time between booking and arrival, a trend that had already begun to emerge at the start of the summer.
“One striking feature of the data we track is that around 17% of total revenue comes from bookings made less than 21 days before arrival. We are not presenting this as a figure that represents the entire Greek hotel market, but it is a clear indication of how important the short booking window has become.
I would still be cautious about describing this change as permanent. But it is now significant enough that hotels need to incorporate it into their commercial and revenue planning”, he says.
According to V. Lapanaitis, this change is linked to travellers’ greater ability to compare options and prices before booking. This development “forces” hoteliers to reassess how they evaluate booking trends compared with previous years.
“A room that remains unsold 60 days before arrival does not necessarily mean today what it did five years ago”, he notes, explaining that a significant share of demand now materialises much closer to the arrival date.
This shift made more active revenue management necessary during this year’s season. Prices did not fall across the board, but adjustments were made more selectively, according to date, room type and booking pace.
“When you know demand is there but is materialising later, you should not react too soon by cutting prices across the board. You need to know when to intervene and when to protect your rate. In that sense, revenue management is also about managing patience”, he says.
The challenge of profitability
Beyond booking trends, this year’s season also highlighted the different financial performances that hotels with similar occupancy levels can record.
“Two properties may have similar occupancy and completely different financial results. The real bottom line emerges when we look at occupancy, average rate, revenue per available room, the cost of acquiring the booking and, ultimately, the margin left to the hotelier”, he says.
High commissions and distribution costs are also now in focus, as they can significantly erode hotel operators’ profit margins. “The next challenge, then, is not just occupancy or the average rate, but how much of the revenue generated ultimately stays with the hotel”, he notes.
Extending the season
Meanwhile, according to Square Lime’s founder, September and October are becoming more important to the tourist season, with some demand deliberately shifting away from the peak months of July and August.
However, as he stresses, “there is a genuine extension of the season only when the destination as a whole remains active, with transport links, dining and experiences.”