Authors: Nikolaos Kartalis, Panagiota Kyriakopoulou

Title: Bank loans and non-performing loans in the hotel business and their impact on economic development of Greece

Abstract

It is a fact that tourism in this difficult period of the economic crisis is the main export industry in Greece with significant effects on the whole economy. Hotel business, in fact, is on the rise and the competition is intense and multilevel. On the contrary, the non-performing loans of the sector did not experience the expected decrease and according to the bankers the number of respondents was limited, so that a solution could be found for the economic restructuring of their hotel business.

This research aims at analyzing the levels of non-performing loans in hotel businesses in Greece in the recent years of the financial crisis. Its parallel objective is to record the management and the views of bank employees who work in the business sector and deal directly with bank lending. The necessary data collection took place in two phases due to the nature of the data; statistics were collected by the Bank of Greece and ICAP Group and analyzed through secondary research while the answers of bank employees were gathered through the interviews conducted with the aim of our primary research and analysis of our research issues.

A major limitation on this research is the small number of published related data as it is banking secrecy that prevents further information from being processed in research. As a result of the survey, it was found that from 2016 onwards there is a downward trend in the level of non-performing loans in the hotel sector and that, moreover, bankers follow mostly the guidelines of the European Union and the Bank of Greece for the management of non-performing clients exposures of hotel businesses. The interviewees also believe that there are well-founded hopes for a further reduction in non-performing loans in this sector, given the continuing growth in tourism in Greece in recent years.