NIKOS DANDOLOS

At the top of the Greek tourism, leisure and entertainment industry

Basic logic requires that development planning should be a factor in overall long-term tourism planning, a fact which is unfortunately not the case in Greece.

"We are less than 10 months away from an immense challenge, that of successfully hosting the 2004 Olympic Games. This is no time for criticism, but some things could have been done better. We will focus on our own sector, tourism, leisure and entertainment," points out Mr. N. D. Dandolos, Management Consultant of Hyatt Regency Hotel & Tourism Company (Hellas) S.A. and Managing Director of the company Lampsa Hellenic Hotels S.A. points out. “Despite the fact that 2003 was a terrible year for tourism the Hyatt Regency recorded satisfactory financial results while one of our overriding goals is to create the best entertainment complex in Europe on the site of the present Mont Parnes casino.”

The overall results for the 2003 tourist season were negative for the entire hotel sector. How did the season end for the hotels in your Group in terms of occupancy rates and receipts?

Admittedly, 2003 was a bad year for tourism due to the particularly unfortunate international economic and political circumstances. Despite that, we are quite pleased with the year to date results for our hotels. For example, the Hyatt Regency Thessaloniki Hotel had an occupancy rate in the order of 67.5% for the first 9 months of the year. That is a reduction of around 7% compared to the same period in 2002 but we managed to increase the average room rate by around € 10 compared to last year to € 142. The 9 month receipts were slightly down by around 3% compared to 2002. Hotel Grand Bretagne in Athens reopened its doors last March following a 15 month period of renovation. Of course it was not the best timing but despite that we achieved the very best. Year to date room occupancy rates at the hotel are above 46% but what is exceptionally interesting is the average room rate which exceeds € 225, the highest rate on the Athens market. This has been possible for two reasons, firstly the important increase in the number of suites the hotel has, which are priced at a higher rate, and secondly because of the exceptional quality of the renovation with the result that we have in effect been given the opportunity to recalibrate the hotel's pricing policy. Based on evaluations by experts from the hotel industry and other criteria used by the international Starwood chain, to which management of the hotel has been assigned, the Grand Bretagne is one of the top five city hotels in Europe. Of course, in addition to its hotel activities, our Group is also involved in the leisure and entertainment sectors. At Hyatt Regency Hotel & Tourism Company (Hellas) S.A. level the net earnings before tax for the 9 month period (01.01.2003 - 30.09.2003) were up 9.7% and stood at € 45.3 million compared to € 41.3 million for the same period in 2002. Note that all earnings come from net operating profits. At the same time, despite the poor international economic environment, Company turnover also increased by 2.95% reaching € 131.1 million as did gross operating results (profits) which increased by 5.5% compared to the same 9-month period last year.

A few months ago you took over rebuilding and later management of the Mont Parnes Hotel and Casino. What does that means for the Company? What is the current situation?

Following the enactment of Law 3139 of 30.04.2003 the process for privatizing the Mont Parnes Hotel Casino complex was completed and we have been running it since last May. More specifically, the Greek State transferred 49% of shares in the former state-run company Hellenic Mont Parnes Casino S.A. to Athens Resort Casino S.A., a company in which the Hyatt Regency Hotel & Tourism Company (Hellas) S.A. has a 70% holding along with the Elleniki Technodomiki Group company Technical Investments S.A. which has a 30% holding. Given the nature of this concession arrangement, management was also assigned, which has been taken over by Hyatt. Undoubtedly our new activity places the Group at the top of the Greek tourism, leisure and entertainment industry. Our objective is to create the best entertainment centre in Europe on the site of the current Mont Parnes casino. The in-depth renovation of existing building facilities will commence in the months to come once the relevant architectural designs have been approved. We have already started upgrading facilities and this process will be completed in a short while. Our Group is primarily known for the quality products it provides to its customers and we considered that a direct, substantive intervention was needed to upgrade existing facilities in aesthetic and quality terms, which we took possession of in a very poor state of repair.

The Minister of Finance has unveiled the new development law. What do you have to say about it?

The provisions of the new development law would definitely appear to be a move in the right direction. Moreover, we are all in agreement that the currently applicable maximum level of investment needs to be readjusted upwards, that incentives for major investments need to be improved, and that the subsidies for creating new jobs need to be increased. Besides, who doesn't agree that the bureaucratic procedures for approving and granting aid need to be simplified? The rational implementation of the provisions in the new law by public services will play a defining role in whether or not the new law becomes effective. I want to give you an unfortunate example relating to our Group. Despite the fact that our investment to renovate the Grand Bretagne Hotel was in excess of € 85 million it was not possible for us to receive a subsidy of € 4.5 million for purely bureaucratic reasons. Approaches and practices of this type by public services in relation to how development provisions are implemented should be eliminated, so as to create real incentives for substantive investments. The views of the sector’s collective representatives are divided and that is only natural since they represent different, conflicting interests. The old enterprises want incentives for modernization and the new enterprises want provisions supporting special forms of investment in tourism. All of this springs from the fact that no clear tourism policy has been devised with the result that every party or individual sector wants to defend its own interests. Basic logic requires that development planning should be a factor in overall long-term tourism planning, a fact which is unfortunately not the case in Greece.

Your company is primarily active in America and Europe but not exclusively so. Do you believe that in Greece investors in the tourism sector are treated in an appropriate manner? What could be done to attract investors?

The international Hyatt Group has a dynamic presence on all five continents. Consequently it has immense experience in green field projects in many countries both in terms of hotels and entertainment complexes. As far as your specific question is concerned, I would say that all investors or potential investors - regardless of their field of activity - are looking for the following conditions to be met by the Greek State:

A stable legislative and institutional framework

Guarantees on the transparent origin of capital

Simplified licensing procedures

In most privatizations, absolutely transparent tendering procedures.

Despite the fact that there have been substantive interventions made by the State over recent years with the enactment of modern legislative and normative provisions and the creation of bodies such as the Hellenic Centre for Investments, there continue to be many problems with all the issues I mentioned above. The idea of a one-stop-shop for potential investors has unfortunately not yet been accepted by public services. The fact that the political leadership is attempting to create the appropriate infrastructure to attract investments does not suffice. Greek public administration, and I am referring in particular to top bureaucrats, need to understand that creating a friendly (yet at the same time strict) environment for investors is a condition for generating real results. The role of civil servants should not be to discover or generate problems for investors but to resolve issues in a rapid, substantive, transparent manner in line with the law.

In less than 12 months the Olympic Games will take place in Greece. What mistakes, omissions and right moves have been made to date both by the State (Greek National Tourist Organization, Ministry of Development, Athens 2004) and by the private sector?

As a country we are now less than 10 months away from an immense challenge for all of us, in other words the successful hosting of the 2004 Olympic Games. This is no time for criticism and second guessing the measures which have already been taken or are currently being implemented by the Organising Committee and the State. Some things, both in terms of planning and in terms of implementation and control of the cost, could have been done better. We will focus on our own sector, tourism, leisure and entertainment. Our objective is to offer the best possible product to all our guests. We consider that in terms of infrastructure we are the best. Another challenge for us is to provide the highest standard of services. Employees in our Group, who are our most important resource, will do their very best - we are firmly convinced of that. All of us need to reflect on the undoubtedly major responsibility of the private sector not only in the successful hosting of the Olympic Games but also in the future of the tourism sector in general.

Minister of Development, Mr. Tsochatzopoulos, decided to abolish the rules on hotel saturation in many cities in Greece including Athens and Thessaloniki. Do you agree with the specific measure? What will your future plans be if this decision is implemented?

Look, we are now living in a globalized economic environment, in a free market so the possible removal of the rules on hotel saturation not only does not bother us, but will be dealt with by us as a challenge.For some years now Hyatt has expressed its interest in creating a 5 star hotel complex in Athens and we are also seriously examining the possibility of extending the Hyatt Regency Hotel in Thessaloniki.However, we believe that the State should go ahead with these new reforms with particular care. I repeat once again how definitive the need for long-term planning is. Both the type of tourist product and the number and quality of hotel / tourist facilities and infrastructure are absolutely dependent on how clear long-term tourism planning is.