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Greek Bailout Deal Leads to Higher Hotel PricesJuly 22, 2015
A recent bailout package approved by the Greek parliament includes hefty austerity measures. The meat of the deal involves Greece dividing and selling $54 billion of the country's assets to the private sector in order to recapitalize its banking sector, on top of raising the pension age and cutting payouts. Other changes include hikes to value-added-tax (VAT) for some sectors, which mostly hurts businesses.
The VAT rate on hotels is currently 13 percent, but the government is expected to raise it to 23 percent. Hotels are starting to recoup these costs immediately, increasing prices for guests who are already staying in hotels and even further if their rates include meals.
In June, the head of the association of restaurant chains SEPOA, Thanassis Papanikolaou, warned in the Greek press that the VAT hike would cost thousands of jobs and businesses.
"We have the experience from 2011 when the increase from 13 to 23 percent in food service brought the shutdown of 4,500 enterprises and the loss of 40,000 jobs," Papanikolaou said to Greek news outlet Ekathimerini.