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Impacts of the refugee crisis on the hotel industry: Evidence from four Greek

islands

Article in Tourism Management · August 2018

DOI: 10.1016/j.tourman.2018.02.004

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Varna University of Management

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Impacts of the refugee crisis on the hotel industry: Evidence from four Greek islands

Stanislav Ivanov

Professor, Varna University of Management, 13A Oborishte Str., 9000 Varna, Bulgaria, tel:

+359 52 300 680, e-mail: stanislav.ivanov@vumk.eu

Theodoros A. Stavrinoudis

Assistant Professor, University of the Aegean, 8 Michalon Str., 82132 Chios, Greece, tel: +30

6938799541, e-mail: tsta@aegean.gr

Abstract:

This paper investigates the impacts of the 2015 refugee crisis on the hotel industry on four

islands in Greece (Lesbos, Kos, Chios and Samos) and hoteliers’ responses to it. The sample

includes 96 accommodation establishments. Findings revealed that the refugee crisis had a

very serious negative impact on the hotel industry of the analysed islands and their

operational statistics deteriorated significantly. The image of the islands and of the

accommodation establishments were hurt as well. The hoteliers preferred to mitigate the

negative consequences of the refugee crisis mostly by increased marketing efforts to attract

more guests, and cutting costs and prices, rather than by working with fewer employees,

delaying payments to suppliers or requiring more cash payments. Managerial implications,

limitations and future research direction are also discussed.

Key words: refugee crisis, refugees, migrants, hotel industry, Greece

Citation: Ivanov, S., & Stavrinoudis, T. (2018). Impacts of the refugee crisis on the hotel

industry: Evidence from four Greek islands. Tourism Management, 67, 214-223.

  1. Introduction

The recent geopolitical instability in the Middle East led to a significant increase in the

refugee/migrant flows to European countries and mainly to Greece and Italy (173,450 and

181,463 arrivals respectively in 2016) (The UN Refugee Agency, 2016b). In 2015, 1,015,078

refugees/migrants reached Europe by crossing its maritime borders and only in August 2015

the number of arrivals increased by 1,500% compared to August 2014 (The UN Refugee

Agency, 2016b; Greek Ministry for Economy, Infrastructure, Shipping and Tourism, 2015).

In the case of Greece, the largest refugee/migrant flows were recorded on the Aegean islands

located near the Turkish borders (Lesbos, Chios, Samos and Kos – see Tables 1 and 2) (The

UN Refugee Agency, 2016c). During the first eight months of 2015 on some of the above

islands the number of incoming refugees/migrants exceeded the number of the islands’

residents (Greek Ministry for Economy, Infrastructure, Shipping and Tourism, 2015).

From a legal perspective, the concepts of ‘refugee’ and ‘migrant’ are quite distinct and the

difference is in their motivation to migrate. According to the Convention and Protocol

Relating to the Status of Refugees (UNHCR, 1967) a refugee is a person arriving in a

different country than the one he/she resides in, in search of refuge or residence permit owing

to the fear of lack of protection or persecution for reasons of religion, race, nationality, etc. in

the country of his/her nationality. According to UN Refugee Agency (2016a), migrants

choose to leave their country not due to an immediate threat of persecution or death but rather

in order to have better living standards through work, education or family reunification.

Should they return to their homeland, they will continue to enjoy the protection of their

government. For simplicity, in this paper we shall refer to the 2015 crisis as ‘refugee crisis’,

and to the people entering Greece as ‘refugees’. The political discussions whether they are

real ‘refugees’, legal or illegal ‘migrants’ goes beyond the scope of this paper.

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The refugee crisis has multiple negative effects on the tourism activity on the islands:

cancellation of hotel reservations, flights, conferences and cruise ship port calls; loss of

income; shrinking of the active tourist season; decrease in bookings, etc. As Table 3 shows,

http://www.unhcr.org/protect/PROTECTION/3b66c2aa10.pdf
http://www.unhcr.org/protect/PROTECTION/3b66c2aa10.pdf
the number of tourists arriving by air (the main transportation mode for international tourists)

decreased in 2015 compared to 2014. On the other hand, the number of overnights in the

hotels and similar establishments on three of the islands slightly increased, but this was

probably attributable not to tourists, but rather to employees and volunteers in non-

governmental organisations (NGOs), Frontex officers and in some cases – refugees.

Moreover, a large number of Turkish citizens visit the islands for short day trips without

usually spending the night there. The statistical data in Table 4 reveal that Turkish visitors are

not affected by the refugee crisis. This is probably due to the fact that refugees cross Turkey

and come to the Greek islands from the Turkish coasts by crossing the Turkish maritime

borders. Thus, Turkish visitors are quite familiar with the presence of refugees. The presence

of large numbers of refugees on the islands caused crucial social pressure as well as pressure

on the islands’ infrastructure and carrying capacity. An interesting fact is that on all examined

islands the number of refugees exceeded the number of local residents, thus leading to a high

ratio of refugees to local residents, which in the case of Lesbos, for example, reached 5.86.

This comes on top of an already high ratio of tourists to local residents, which, for example, in

the case of Kos reached 28.2 in 2015. In two of the four examined islands (Lesbos and Chios)

the number of refugees surpassed by far the number of tourists. At the same time, the

simultaneous presence of both population groups (tourists and refugees) on the islands

compared to the local population of these islands results in a very high ratio of tourists and

refugees to local residents, which in the case of Kos, for example, reached 29.92. During a

crucial economic period, these facts have triggered negative multiplier effects on the entire

economy not only of the islands but also countrywide (Greek Ministry for Economy,

Infrastructure, Shipping and Tourism, 2015). They reduce the growth rates of the tourism

demand, especially on the islands under investigation, thus causing unequal geographical

distribution of tourism demand and a fall in hotel prices (Research Institute for Tourism,

2016).

Moreover, the image of the country projected through international and social media is

changing and is associated all the more with images of gloom and often poverty (Tzanelli &

Korstanje, 2016). The strong international attention drawn to the refugee crisis had a negative

impact on the tourism image not only of the islands where the major refugee/migrant flows

were recorded but of the entire country as well (Greek Tourism Confederation, 2016a).

Nevertheless, the same media also promoted the strong support and solidarity of the Greeks

with the refugees. The Hellenic Rescue Team and Efi Latsoudi shared the 2016 Nansen

Refugee Award for their voluntary efforts to aid refugees arriving in Greece (The UN

Refugee Agency, 2016d). At the same time, in February 2016, 236 international scholars

nominated the “Aegean Solidarity Movement” for the Nobel Peace Prize (Tselios, 2016).

Two main reasons led to the current research: first, the immense increase of refugee influx

and its impact on tourism; and second, the limited, to this day, scientific research on the

relation between tourism and refugee issues (UNWTO, 2009; Seetaram, 2012; Moufakkir,

2014) and mainly on the consequences of refugee flows on tourism (Pappas and

Papatheodorou, 2017), which is a central innovative aspect of this research. In the light of the

above discussion, the aim of this paper is to investigate the overall impact of the 2015 refugee

crisis on the hotel industry on the four most affected Greek islands (Lesbos, Chios, Samos and

Kos). In order to fulfil this aim, the following key objectives of the paper are formulated:

a) to evaluate the impact of the refugee crisis on performance metrics of the hotel

industry – number of guests, overnights of guests, average stay of guests, attraction of new

types of guests, prices, total revenues, number of employees, and total costs in 2015 compared

to 2014;

b) to evaluate managers’ estimates about the impact of the refugee crisis on the

performance metrics of their properties in the future;

c) to identify the effect of the refugee crisis on the image of the islands and hotels; and

d) to identify the coping mechanisms adopted by hoteliers to mitigate the negative

consequences of the refugee crisis.

Τhe investigation of the public authorities’ crisis management actions in the examined

destinations extends beyond the scope of this paper.

  1. Brief Literature Review

Τhe international literature is abundant of studies dealing with the impact of external factors

leading to crisis situations (political instability, acts of terrorism, wars, etc.) on a destination’s

or country’s tourism industry (e.g. Afonso-Rodrνguez, 2017; Causevic & Lynch, 2013;

Ivanov, Gavrilina, Webster & Ralko, 2017; Ivanov, Idzhylova & Webster, 2016; Ivanov,

Sypchenko & Webster, 2017; Saha & Yap, 2014; Solarin, 2015; Som, Ooi, & Hooy, 2014,

among others). In general, prior studies reveal that crisis situations have negative impacts on

tourism demand and supply. The presence of refugees and immigrants in tourist destinations

is one of the above factors, as it causes various feelings to tourists (active and potential ones)

http://www.euronews.com/2016/02/04/refugee-crisis-a-nobel-peace-prize-for-the-heroes-of-the-aegean
and influences their total travel experience and their intention to (re)visit the destination

(Coldwell, Osborne, Crouch, & Walker, 2015).

The literature review revealed many attempts to research the relation between migration and

tourism. However, the vast majority of published papers focus on refugees and immigrants

who have settled and reside in the tourist origin countries and have integrated to a great extent

in the local society, economy and culture. Within this framework, Williams & Hall (2002)

presented a theoretical approach of the relation between migration and tourism through a

number of cultural and economic mechanisms. More recently, Seetaram (2012) found that the

number of immigrants residing in a destination can increase the inbound tourist flows. The

larger the immigrant number, the more likely it is for friends and relatives to visit them in

their country of residence, causing thus what she calls “immigration-led tourism”.

Respectively, Genc (2013) revealed the close relation between immigration and inbound

tourism demand in New Zeeland, while Balli, Balli & Louis (2016) claimed that immigrants

residing in OECD member countries act in a positive way (in marketing terms) as they attract

tourists from the country in which they reside and work to their country of origin. This is

achieved through their interaction with the locals.

Mehmood, Ahmad & Khan (2016) investigated the relation between immigrants, tourist

arrivals and crime rate in the United States, thus confirming the results of earlier studies

concerning the immigrants’ contribution to tourist arrivals and the bidirectional relation

between tourism and migration. Etzo, Massidda & Piras (2014) evaluated the effect of

migration on international tourism and revealed that the presence of immigrants in a country

causes both outbound and inbound tourism. On the other hand, according to Moufakkir

(2014), the prejudice of a country’s residents against and animosity towards immigrants affect

the residents’ image of the immigrants’ country of origin and mostly their intention to travel

there in the future. At the same time, the animosity of local residents towards certain

immigrant nationalities and the existential stigma affect the tourist experience and the

hospitality towards tourists originating from those countries since the aforementioned stigma

affects tourists as well (Moufakkir, 2015).

Other researchers address the extended hospitality concept which focusses on the reception

and hosting not only of tourists but also of immigrants and refugees. Thus, similarities,

regarding hosting tourists and immigrants/refugees, have been identified and the long-term

benefits of the reception/hosting of refugees have been elaborated (comprehension of different

cultures; integration of refugees into the host community; inclusion of refugees/immigrants in

the workforce) (Pechlaner, Nordhorn & Poppe, 2016). The above issue is of particular interest

for countries hosting refugees and immigrants on a long-term basis. However, the difficulties

in the coexistence of refugees/immigrants and tourists (management of refugees’ flows;

reluctance of tourists to encounter refugees), especially in popular and well-established tourist

destinations, whose economic welfare depends mainly on tourism, should not be overlooked.

For example, Van Hooren’s (2015) study on the social impact and the attitudes of locals

caused by the presence of irregular immigrants in Malta, approaches the issue of ‘outsiders’

(tourists and mainly immigrants) in a small tourist country, and indicates the practical

problems related to employment, health care, living space and safety.

In a different approach, Simpson, Simpson & Cruz-Milan (2016) revealed that the attitudes of

winter immigrants in Rio Grande Valley, South Texas, compared to the attitudes of

undocumented immigrants, affect both the feeling of safety of winter immigrants and the

extent to which they will revisit or recommend the destination to others. Starting from the

ascertainment that the new millennium is characterised by the simultaneous increase in tourist

and refugee flows, Russell (2003) researched the sociocultural impacts of these flows on

developing countries. She concluded that the planning of all kinds of activities at a local level

should include next to basic and tourist facilities also the necessary infrastructure for the

hosting of refugees. This ascertainment is particularly timely nowadays for the islands of the

Aegean Sea.

Most recently, and due to the escalation of the refugee crisis in the Mediterranean, the

international literature was enriched with studies regarding the impact of the refugee crisis on

the tourism industry of destinations receiving refugees. Costa (2017) investigated how

tourism demand is affected by urgent situations and crises in tourist destinations. To a great

extent his study also focused on the refugee crisis and its impact on popular tourist

destinations on Mediterranean islands, as it has been demonstrated by the fluctuation of prices

of tourist accommodations. Moreover, he indicated that the prices of tourist accommodations

had to be decreased in destinations where large refugee flows were recorded, especially when

this fact generated negative publicity (as in the case of the island of Kos). On the contrary,

other destinations (e.g. the island of Zakynthos, which is located far from the islands that

function as reception areas) benefited from the above situation and achieved a significant

increase of their prices. At the same time, the described phenomenon resulted in a delayed

increase of tourist accommodations’ occupancy on the islands that were affected by refugee

flows. A satisfactory occupancy was reached only after the neighbouring tourist destinations

had already reached a high occupancy. Pappas and Papatheodorou (2017) investigated the

impact of the refugee crisis on potential tourists’ perceptions of Greece as a tourist

destination. The study also dealt with the measures taken by the country’s hoteliers in order to

confront this crisis. The importance of host communities was stressed both for the shaping of

a tourist destination’s image and for decisions related to refugee crisis management, among

other things, in terms of tourism. At the same time, the researchers expressed the opinion that

tourism entrepreneurs need to regard the crisis not only as a threat but also as an opportunity

to create the image of a country that is tolerant, compassionate, and sincerely hospitable

towards refugees. Of particular interest is also the suggestion expressed by the researches that

a research dealing with those tourism enterprises on the Aegean islands that were affected by

the refugee crisis (i.e. more or less what this study does) would be quite useful.

This manuscript contributes to the advancement of knowledge on the relationship between

tourism and migration by empirically investigating the impact of refugee flows on the

hospitality industry, the image of tourist destinations, which are at the same time refugee

reception areas, and the approaches used by hospitality businesses to mitigate the negative

impacts of the crisis. Consequently, the research extends beyond the traditional approach of

the symbiotic relationship between tourism and migration [tourism and retirement migration,

tourism and labour migration, tourism and entrepreneurial migration, etc. (Williams and Hall,

2000)], and identifies the absence of significant benefits for the refugee reception area by

suggesting new aspects for further scientific research.

In order to meet the objectives of the present manuscript, a questionnaire was used that

included several groups of questions related to the research aims. The first group included

questions on the dynamics of selected operational statistics in 2015 (the year of the crisis)

compared to the preceding year (2014 – the year before the refugee crisis) and respondents’

forecasts about 2016. The second group evaluated the impact of the refugee crisis on the

image of the islands and accommodation establishments. The third group identified

respondents’ approaches to mitigate the negative consequences of the refugee crisis on their

businesses. Finally, respondents were asked about their estimations of the crisis’ duration. The

specific questions in the first and third groups were adapted from recent prior studies on

political crises/instability (Ivanov, Idzhylova & Webster, 2016; Ivanov, Sypchenko &

Webster, 2017; Ivanov et al., 2017), while the questions in the second group were developed

by the authors for this particular research.

  1. Methodology

Data collection took place between March and June 2016. The authors received detailed data

on all accommodation establishments on the four islands that were most hit by the refugee

crisis (Kos, Lesbos, Samos and Chios) from the Hellenic Chamber of Hotels. An online

questionnaire was developed and the link to it was sent by e-mail to all managers of

accommodation establishments on these islands. Table 5 presents the number of responses per

island. The sample includes 96 properties or 16.03% out of a total of 599 hotels and similar

accommodation establishments on the four islands. Sample’s characteristics are presented in

Table 6.

INSERT TABLE 5 AROUND HERE

INSERT TABLE 6 AROUND HERE.

The Kolmogorov-Smirnov z-test revealed that the answers of the respondents were not

normally distributed (all z-statistics were significant at p<0.05), hence non-parametric tests

were adopted for data analysis. In particular, the Kruskal-Wallis χ2 test was used to identify

differences in respondents’ answers on the basis of their category, location, island, type, and

size, while the Mann-Whitney U-test was used for measuring differences between chain

affiliated hotels and independent properties. Additionally, Wilcoxon signed ranks test was

used to identify the differences in respondents’ answers to some questions.

It should be noted that the authors have contacted the travel agencies operating on all four

islands as well, with the aim to provide a comprehensive overview of refugee crisis’ impacts

on the local tourism industries, not only on the hotel industry. Unfortunately, the

overwhelming majority of contacted travel agency managers refused to participate in the

research due to various reasons and only a handful of them actually completed the

questionnaire. That is why the opinion of travel agency managers is not reported in this paper

and should be subject to future research.

  1. Findings

4.1. Impacts of the refugee crisis on accommodation establishments’ operational statistics

Research findings are presented in Table 7. Findings reveal that all operational statistics

(number of guests, number of overnights, average stay, price, revenues, number of employees,

costs) deteriorated. The number of guests in 2015 decreased by -22.79% compared to 2014

(row A4.1), overnights by -18.75% (row A6.1), prices plummeted by -12.45% (row A10.1),

revenues by -15.66% (row A12.1), while costs surged by 5.66%. Some of these findings are

similar to the findings of Costa’s study (2017). The changes in the operational statistics

(excluding the changes in total costs) are strongly, positively and significantly correlated

(Appendix 1), meaning that the drop in the number of guests is also combined with shorter

stays and lower prices, leading to fewer overnights and ultimately to less total revenue. This

conclusion is further supported by the regression analysis in Appendix 2 which reveals that

the percentage changes in the number of overnights, of prices and the length of stay had

positive and statistically significant impact on the percentage changes of respondents’ total

revenues. That is why, it is not surprising that respondents considered that the refugee crisis

had a very high (m=4.40, row A1) negative impact (m=1.53, row A2) on their businesses and

were forced to lay off employees (m=-5.26%, row A13.1). While hotels were hardly hit by the

decrease in the number of tourists and prices, the hopes of hoteliers to generate demand for

accommodation from new customer segments (refugees themselves, members and volunteers

of NGOs, and Frontex employees) did not materialise. Hoteliers reported that these segments

had very little impact on their businesses (rows A9.1-3). Hoteliers were not optimistic about

the performance of their properties in 2016 compared to 2015 either and considered that the

respective operational statistics would deteriorate even further (rows A4.2, A6.2, A8.2, A10.2,

A12.2, A13.2, and A14.2). The values of the Wilcoxon signed ranks test between the actual

changes of the operational statistics in 2015 (compared to 2014) and the forecasts for their

change in 2016 (compared to 2015) were all significant at p<0.01, excluding the costs.

INSERT TABLE 7 AROUND HERE

The Kruskal-Wallis χ2 test revealed that category, size and type of the accommodation

establishment did not influence the changes in its operational statistics because only few

minor statistically significant differences were identified (Table 7). On the other hand, we see

that the refugee crisis did not affect all islands equally: the accommodation establishments on

Lesbos were more severely hit by the crisis than properties on Kos, Chios and Samos, and

most of the χ2 test statistic values were statistically significant. Moreover, hoteliers on Lesbos

reported a higher impact of the refugees, NGO representatives and Frontex employees on the

generation of demand for rooms compared to the other three islands. These results are not

surprising, considering the fact that around two thirds of all refugees on the four islands

entered Greece via Lesbos island (Table 1), which experienced enormous social and economic

pressure, and much of the efforts of the NGOs and Frontex were concentrated there too.

Furthermore, the managers of seaside properties reported worse operational statistics than the

managers of urban and rural/countryside hotels and most of the χ2 test statistic values were

statistically significant. The reason is probably the mass tourist markets that seaside

accommodation establishments serve and their sensitivity to security threats like the refugee

crisis. Finally, while the average prices of independent properties dropped by -13.99%, the

managers of chain affiliated hotels reported that their prices increased, even slightly, by

4.38% in 2015 compared to 2014 (U=192, p<0.05), a fact which is in line with a recent study

(Costa, 2017). Although the prices of chain properties dropped in 2016 by -10.94%, this

decrease was much higher for independent ones: -28.69% (U=181, p<0.05). Therefore, hotel

chains’ strong brands, considered as one of their most sought-after attribute (Ivanova and

Ivanov, 2015), helped the affiliated properties to partially mitigate the negative impacts of the

refugee crisis on their performance.

It should be noted that there is a discrepancy between the secondary data on the number of

overnights on the four islands and the answers of the respondents. While the secondary data

on Table 3 showed that the number of overnights in hotels and similar accommodation

establishments on Kos, Lesbos and Chios increased in 2015 compared to 2014, the hotel

managers on the same islands reported a significant drop in the same statistics, i.e. by –

18.75% on average (Table 7, row A6.1). This discrepancy can be attributed to several possible

reasons. First, it is possible that the managers of hotels that were mostly hit by the refugee

crisis were overrepresented in the sample. Second, respondents might have overestimated the

impact of the crisis and misreported the changes in their operational statistics. Third, the NGO

employees and volunteers, Frontex staff and the refugees themselves might have used other

establishments than those participating in the research. In any case, our data do not allow us to

make a definite conclusion about the exact specific reasons for this discrepancy and further

research is necessary. However, in a recent press release the Greek Tourism Confederation

(2016b) mentioned that the number of tourist arrivals by air decreased even further over the

first six months of 2016: Lesbos (-63.2%), Samos (-39.0%), and Kos (-17.9%), which is in

line with the answers of survey participants that the refugee crisis had a significant negative

impact on their businesses.

4.2. Impacts of the refugee crisis on accommodation establishments’ and islands’ image

Respondents further agreed that the refugee crisis had a profound negative impact on the

image of the affected islands as tourist destinations (m=1.23, row B1) and the image of the

properties they manage (m=1.89, row B2). The Wilcoxon signed ranks test showed that the

respondents considered that the impact on the destination image was much stronger than on

the image of the individual accommodation establishments (z=-6.108, p<0.01). This result

was expected since the extensive media coverage of the refugee crisis focused on the islands

as a whole and rarely mentioned the names of any particular accommodation establishments.

Hoteliers’ responses were quite uniform and no statistically significant differences were

identified on the basis of establishments’ characteristics.

4.3. Accommodation establishments’ approaches to mitigate the negative impacts of the

refugee crisis

Hoteliers preferred to mitigate the negative consequences of the refugee crisis mostly by

increasing their marketing efforts to attract more guests (m=4.13, row C4) and by cutting

down their costs (m=3.72, row C4) and prices (m=3.69, row C5), rather than by working with

fewer employees (m=3.04, row C2), delaying payments to suppliers (m=2.60, row C3) or

requiring more cash payments (m=1.96, row C1) (all but one of the z-values of the Wilcoxon

signed ranks test were significant at p<0.01, see Appendix 3). The approaches of Greek

hoteliers towards the refugee crisis are similar to those adopted by their Ukrainian colleagues

to mitigate the impacts of political instability in their country (Ivanov et al., 2017), and the

strategies of Russian hoteliers towards the negative impacts of the international sanctions

(Ivanov, Sypchenko and Webster, 2017). On the other hand, Greek hoteliers seem more

socially responsible than hoteliers in Crimea (Ivanov, Idzhylova and Webster, 2016) and were

significantly less inclined to work with fewer employees and delay their payments to their

suppliers. Probably the different maturity of the hotel industries in Greece and Crimea, and

their different exposure to international tourist markets (stronger in Greece than in Crimea)

might have influenced the different approaches adopted by Greek and Crimean hoteliers in

both crisis situations. However, further research is needed to support or reject this conjecture.

Some minor differences were identified in respondents’ answers. For example, hoteliers on

Kos reported relying more on increased marketing efforts than hoteliers on other islands

(χ2=9.704, p<0.05); the managers of seaside properties were more inclined to work with

fewer employees than the managers of urban and countryside establishments (χ2=8.931,

p<0.05); managers of smallest properties (up to 50 rooms) reported requiring more cash

payments than managers of properties with more than 100 rooms (χ2=9.053, p<0.05), and

worked with fewer employees than midsized hotels (χ2=8.561, p<0.05).

  1. Conclusions

This paper contributes to the advancement of knowledge by investigating the impacts of the

2015 refugee crisis on the hotel industry on four Greek islands (Lesbos, Kos, Chios and

Samos) and hoteliers’ responses to it. From managerial perspective, the findings revealed that

the refugee crisis had a very serious negative impact on the hotel industry of the analysed

islands similar to empirical studies for other crises and countries (Ivanov, Sypchenko and

Webster, 2017; Ivanov, Idzhylova and Webster, 2016; Ivanov et al., 2017). Not only did the

operational statistics and performance metrics of the accommodation establishments

deteriorate, but their image and the image of the islands they are located on, worsened,

indicating that the echo of the 2015 refugee crisis would continue to be heard in the near

future. Unlike travel agencies that can relatively easily adapt to crisis situations and divert

customers to other islands, destinations or even countries (as some British, German and

Russian tour operators did in the summers of 2015 and 2016 after the terrorist attacks and

coup d’état attempt in Turkey, Tunisia and Egypt), accommodation establishments cannot do

this, because they are location-bound. Greek hoteliers need to work together with other

tourism industry representatives, local and national authorities to restore the positive image of

the islands, but their efforts might remain in vain if the influx of refugees continues. From

political and humanitarian perspective, the flow of refugees to Greece and other European

countries will not cease by constructing high walls at the borders and applying a stricter

border control. The flows will stop when their causes (such as wars, conflicts, terrorism,

climate change, and poverty, among others) are eliminated. However, this is an issue that goes

beyond the scope of our paper.

Hotel managers need to distinguish the consequences of refugee crisis into short-term (based

on the impact on operational performance metrics of their businesses) and long-term

consequences, which are the most crucial. The latter affect not only the islands’ and the

country’s image in the minds of potential, mainly foreign, tourists (Pappas & Papatheodorou,

2017) but also the strategies of tour operators in contact negotiations with hoteliers. The

aforementioned consequences are aggrieved due to a) the continuance, even on a smaller

scale, of the refugee flows, and b) the long-term stay of a large number of refugees on the

islands and its impact on the refugees themselves, the local residents and the businesses of the

islands, as well as the ongoing regular media coverage of the refugee issue.

Local authorities and islands’ businesses play a vital role in the management of the refugee

crisis. Still, under no circumstances can the islands deal with the current situation without the

development of collective actions and the support of the Greek state and competent

authorities. After all, under the current tourism, economic and geopolitical circumstances the

observed negative impact is not limited on the examined islands, but spreads to the rest of the

country, thus affecting both the economy and tourism in a negative way. Special attention

must be paid to the restoration of islands’ positive image and mainly to the support of

independent, usually seaside, properties which comprise the core of tourism supply on the

islands and are more vulnerable to external threats.

The main limitation of this paper is that it considers only the opinion of accommodation

establishments’ managers. As already discussed in the methodology section, the authors have

contacted the travel agencies operating on the four islands but the majority of their managers

declined to participate in the research, hence the impacts of the refugee crisis on their

operations were not measured and reported, which could be the subject of a future research.

Another limitation is the sample size. Although respondents account for 16.03% of the

research population, a larger sample might provide more reliable results. Future research may

expand the sample and include tourist companies (e.g. accommodation establishments and

travel agencies) on other islands and regions on the continental part of Greece. Furthermore, a

similar research can be implemented in Turkey, because the country accepted most of the

refugees in 2015 and is still the home of several millions of them. Finally, research can shed

light on the impact of the refugees that Germany accepted in 2015 (over one million) on

Germany’s economy and the role of the tourism/hospitality industry in their integration into

local communities.

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Table 1. Arrivals of refugees by island

Island 2015 a 2016 b

Kos 58503 5147

Lesbos 506919 99361

Samos 104360 15157

Chios 120556 40521

Total 759112 155286

Source: a UNHCR site: http://data.unhcr.org/mediterranean/country.php?id=83#; b Unpublished statistical data

provided to the authors by the Hellenic Coast Guard

Table 2. Population, tourists and refugees

Island Population

size

(2011) a

Number

of

tourists

(2015) b

Number

of

refugees c

Number of

tourists and

refugees

Tourists

/ local

residents

ratio

Refugees /

local

residents

ratio

Tourists and

refugees /local

residents ratio

Refugees

/ tourists

ratio

Kos 34396 970777 58503 1029280 28.2 1.7 29.92 0.06

Lesbos 86436 75767 506919 582686 0.88 5.86 6.74 6.69

Samos 32977 126789 104360 231149 3.84 3.16 7.01 0.82

Chios 52674 7214 120556 127770 0.14 2.29 2.43 16.71

Sources: a Hellenic Statistical Authority (http://www.statistics.gr/en/home); b Unpublished statistical data

provided to the authors by the Research Institute for Tourism of the Hellenic Chamber of Hotels; c UNHCR site:

http://data.unhcr.org/mediterranean/country.php?id=83#

Table 3. Key tourism statistics on the islands of Kos, Lesbos, Samos and Chios

Island Key statistics 2012 2013 2014 2015

Kos Number of foreign tourist arrivals by air 802760 925834 10111194 970777

Number of hotels and similar establishments 269 270 268 263

Number of overnights 4518972 5276744 5340809 5796309

Lesbos Number of foreign tourist arrivals by air 48435 54395 76413 75767

Number of hotels and similar establishments 114 111 109 110

Number of overnights 394727 458918 563283 584023

Samos Number of foreign tourist arrivals by air 108151 103563 122392 126789

Number of hotels and similar establishments 169 166 166 163

Number of overnights 656947 773643 809466 797400

Chios Number of foreign tourist arrivals by air 8433 8735 8228 7214

Number of hotels and similar establishments 59 63 63 63

Number of overnights 144799 169882 177390 196374

Sources: Unpublished statistical data provided to the authors by the Research Institute for Tourism of the

Hellenic Chamber of Hotels

Table 4. Number of Turkish visitors on the islands of Kos, Lesbos, Samos and Chios

Island 2012 2013 2014 2015

Kos 43596 45184 58077 60971

Lesbos 25807 39005 43744 50659

Samos n/a 10710 13393 18292

Chios 29928 56254 68912 82075

Sources: Unpublished statistical data provided to the authors by the islands’ Port authorities and the Customs

offices

Table 5. Sample size

Island Population size (number of hotels and similar

establishments)

Sample size

Number of

respondents

Share of respondents

Kos 263 36 13.69%

Lesbos 110 19 17.27%

Samos 163 28 17.18%

Chios 63 13 20.63%

Total 599 96 16.03%

Table 6. Sample characteristics

Grouping criteria Groups Number of respondents

Island Kos 36

Lesbos 19

Samos 28

Chios 13

Category 1-2 stars 29

3 stars 44

4-5 stars 23

Type Hotel 75

Resort hotel 12

Other 9

Location Urban 23

Seaside 64

Rural/countryside 8

Size Up to 50 rooms 52

51-100 rooms 26

Over 100 rooms 18

Chain affiliation Independent 88

Part of a chain 8

Total number of respondents 96

23

Table 7. Impacts of the refugee crisis on the hotel industry

Differences by island, category, type, size, location and chain affiliation of the accommodation establishment Question Coding Total

mean

Standard

deviation

Kruskal-Wallis χ2 test Mann-

Whitney

U test

Number of

responses

Island Category Type Location Size Chain

affiliation

A: Operational statistics

A1) How would you evaluate the magnitude of the refugee crisis on your business in general? 1-no impact

5-extremely

high impact

4.40 0.747 6.805* 0.161 0.531 11.087*** 0.064 292.5 96

A2) How would you assess direction of the impact of the refugee crisis on your business in

general?

1-very negative

5-very positive

1.53 0.742 14.593* 3.044 2.348 17.168* 1.686 310 95

Number of guests A3) How would you assess direction of the impact of the refugee crisis on the total number of

guests from?

1-very negative

5-very positive

A3.1) Germany 1.48 0.640 10.171** 0.346 2.002 16.386* 0.351 288 90 A3.2) United Kingdom 1.61 0.633 6.833* 3.219 1.175 6.584 2.290 218* 88

A3.3) France 1.80 0.850 4.106 0.772 0.042 7.550** 1.586 133.5 69

A3.4) Italy 1.75 0.802 10.616** 0.879 3.657 10.867* 1.723 151 76 A3.5) Scandinavia 1.67 0.726 7.663* 2.323 7.964 3.312 6.062** 217.5 87

A3.6) Greece 2.06 0.789 1.349 3.639 0.422 5.542* 4.324 229.5 89

A3.7) Other countries 1.57 0.703 8.644** 0.478 0.446 11.161* 1.303 188 82 A4.1) How did the total number of your guests change in 2015 compared to 2014? Percent -22.79 28.562 4.574 3.126 4.807* 6.509 2.502 240.5 96

A4.2) Which are your estimations (based on reservations) about the change of the total number

of your guests in 2016 compared to 2015?

-42.58 24.972 15.044* 0.206 1.470 7.875 3.476 134.5*** 96

Overnights A5) How would you assess direction of the impact of the refugee crisis on the total number of

overnights of your guests from?

1-very negative

5-very positive

A5.1) Germany 1.48 0.660 10.832** 0.359 0.355 21.211*** 1.142 262 88

A5.2) United Kingdom 1.62 0.633 10.386** 2.940 1.999 4.804* 1.702 240.5 87

A5.3) France 1.63 0.722 7.348* 3.020 0.297 12.594* 1.184 143 71 A5.4) Italy 1.74 0.750 15.940* 3.584 3.904 7.910** 1.267 195 77

A5.5) Scandinavia 1.60 0.724 7.934** 1.430 4.332 7.031** 3.165 248 86

A5.6) Greece 1.98 0.857 1.797 0.430 0.293 4.259 1.809 213.5 88 A5.7) Other countries 1.59 0.724 12.047* 1.786 0.269 13.663* 0.479 185 80

A6.1) How did the total number of overnights of your guests change in 2015 compared to 2014? Percent -18.75 23.855 15.803*** 2.379 5.901* 0.094 2.317 246.5 96

A6.2) Which are your estimations (based on reservations) about the change of the total number overnights of your guests in 2016 compared to 2015?

-40.63 23.717 19.741* 1.791 6.255 2.279 3.815 216.5* 96

Average stay

A7) How would you assess direction of the impact of the refugee crisis on the total average stay

of your guests from?

1-very negative

5-very positive

A7.1) Germany 1.79 0.823 6.820* 5.050* 0.357 11.023*** 1.495 270 87

A7.2) United Kingdom 1.87 0.843 4.342 9.845*** 0.498 3.280 5.438* 214 82

A7.3) France 1.87 0.851 3.326 3.266 0.690 5.026* 1.418 103.5* 67

A7.4) Italy 2.00 0.864 7.860** 1.705 0.689 7.770** 1.774 167 76

A7.5) Scandinavia 1.98 0.826 4.769 3.367 0.834 9.913*** 1.739 205.5 83

A7.6) Greece 2.09 0.868 0.637 2.185 0.687 9.470*** 1.961 209 85

24

A7.7) Other countries 1.88 0.811 9.103** 4.507 0.282 16.333*** 2.772 157.5* 77

A8.1) How did the total average stay of your guests change in 2015 compared to 2014? Number of nights

-0.83 1.421 4.475 4.762* 0.037 0.504 0.718 270.5 93 A8.2) Which are your estimations (based on reservations) about the change of the total average

stay of your guests in 2016 compared to 2015?

-1.35 1.246 0.047 6.644** 2.605 1.326 4.558 215* 96

New customer groups A9) How would you assess the magnitude of the impact of the refugee issue on creating new

types of guests for your hotel?

1-no impact

5-very high

impact

A9.1) Refugees 2.04 1.579 6.298* 0.966 4.259 0.890 0.450 292 94 A9.2) Non-governmental organisations members 2.06 1.420 14.425*** 2.839 2.002 4.418 0.305 298.5 94

A9.3) Frontex employees 1.98 1.391 14.776* 8.615 0.749 4.925* 0.393 334.5 93

Price

A10.1) How did the average price per room per night change in 2015 compared to 2014? Percent -12.45 20.457 1.265 2.060 3.791 0.396 5.086* 192** 95 A10.2) Which are your estimations (based on reservations) about the change of the average

price per room per night in 2016 compared to 2015?

-27.21 19.868 9.226** 1.155 0.491 1.603 1.306 181** 96

A11) Are you willing to make more discounts (offers) in 2016 compared to previous years? 1-Definitely no 5-Definitely yes

3.60 1.192 14.898*** 0.244 3.941 2.126 1.427 281 96

Revenues

A12.1) How did your total revenues change in 2015 compared to 2014? Percent -15.66 23.490 15.422*** 4.466 3.938 2.533 3.874 262 95 A12.2) Which are your estimations (based on reservations) about the change of the total

revenues in 2016 compared to 2015?

-35.16 28.465 7.824** 4.051 2.217 12.515* 4.387 183.5 96

Employees

A13.1) How did the total number of your employees change in 2015 compared to 2014? Percent -5.26 14.765 6.452* 3.076 0.013 2.996 0.574 282 95

A13.2) Which are your estimations (based on reservations) about the change of the total number

of your employees in 2016 compared to 2015?

-21.97 23.962 24.758* 0.778 0.802 8.726 3.906 327.5 95

Costs A14.1) How did your total costs change in 2015 compared to 2014? Percent 5.66 17.750 2.332 0.473 2.566 1.645 1.907 256 95

A14.2) Which are your estimations (based on reservations) about the change of the total costs in

2016 compared to 2015?

4.26 28.549 5.727 0.694 4.138 3.105 3.117 319.5 94

B: Image B1) How would you assess the impact of the refugee crisis on the image of your island as a

tourist destination?

1-very negative

5-very positive

1.23 0.447 3.212 0.018 0.703 3.045 0.022 315.5 96

B2) How would you assess the impact of the refugee crisis on the image of establishment? 1.89 0.806 5.286 0.459 0.574 3.860 0.968 285.5 96

C: Approaches to mitigate the negative impacts of the refugee crisis

C1) We try to mitigate the impacts of the refugee crisis on our business by requiring more cash

payments by guests than payments by bank or credit/debit card

1-strongly

disagree 5-strongly agree

1.96 1.126 7.218* 6.340** 5.085 0.395 9.053** 319 94

C2) We try to mitigate the impacts of the refugee crisis on our business by working with fewer

employees

3.04 1.324 6.895* 2.081 0.699 8.931** 8.561** 278 94

C3) We try to mitigate the impacts of the refugee crisis on our business by paying later to suppliers

2.60 1.388 5.088 5.234 2.040 3.347 3.958 231.5 96

C4) We try to mitigate the impacts of the refugee crisis on our business by increased marketing

efforts to attract more guests

4.13 0.942 9.704** 0.155 2.493 0.276 2.219 257.5 94

C5) We try to mitigate the impacts of the refugee crisis on our business by decreasing prices 3.69 1.098 5.072 1.087 0.174 2.656 2.713 269.5 94

C6) We try to mitigate the impacts of the refugee crisis on our business by decreasing costs 3.72 1.092 3.130 0.321 0.405 0.484 1.856 338 94

C7) The refugee crisis endangers our hotel with bankruptcy 3.47 1.165 14.981* 6.301 0.522 6.909** 5.612* 209* 95

D: Expectations

D1) How long do you expect the refugee crisis to continue? Years 2.27 2.317 11.790*** 4.428 4.716* 0.430 5.312* 301.5 90

Notes: 1. Grouping of respondents: Island (Kos, Lesbos, Samos, Chios), Category (1-2, 3, 4-5 stars), Type (hotel, resort hotel, other), Location (urban, seaside, rural/countryside), Size (up to 50, 51-100, over 100

rooms), Chain affiliation (affiliated to a chain, independent property). 2. *Significant at 10%-level; ** significant at 5%-level; *** significant at 1%-level

25

Appendix 1. Bivariate correlations between the percentage changes of the operational statistics

Percentage changes of the operational statistics

in 2015 compared to 2014

Pearson Correlation

1 2 3 4 5 6

  1. Number of guests x 2. Number of overnights 0.488* x 3. Average stay 0.129 0.575* x 4. Average price per room per night 0.486* 0.415* 0.350* x 5. Total revenues 0.394* 0.729* 0.561* 0.529* x 6. Number of employees 0.254 0.483* 0.402* 0.297* 0.409* x 7. Total costs 0.049 0.136 0.094 -0.060 0.135 0.069

Notes: ***Significant at 1% level; ** Significant at 5% level; Numbers of columns correspond to the numbers of

operational statistics on the rows;

26

Appendix 2. Changes in operational statistics in 2015 compared to 2014: Regression analysis results

Dependent variable: Percentage change of total revenues in 2015 compared to 2014 Independent variables:

Percentage change of the

respective operational statistics

in 2015 compared to 2014

Unstandardized Coefficients

Standardized

Coefficients

t Collinearity

Statistics

B Std. Error Beta Tolerance VIF

(Constant) 0.153 2.170 0.070

Number of guests 0.028 0.069 0.034 0.407 0.653 1.531

Number of overnights 0.496 0.090 0.513 5.536*** 0.524 1.909

Average stay 3.085 1.416 0.186 2.178** 0.616 1.624

Average price per room per night 0.264 0.092 0.231 2.868*** 0.692 1.445

Model summary characteristics

R 0.783

R2 0.613

Adjusted R2 0.595

Standard error of the estimate 14.9121

F(df=4, N=91) 34.037***

Notes: ***Significant at 1% level; ** Significant at 5% level

27

Appendix 3. Differences between the strategies used to mitigate the negative consequences of the refugee crisis

Strategy Wilcoxon Signed Ranks Test

1 2 3 4 5

  1. Requiring cash payments x 2. Working with fewer employees -5.226* x 3. Paying later to suppliers -3.565* -3.152*** x 4. Increased marketing efforts to attract more guests

-7.713* -5.905* -6.760*** x

  1. Decreasing prices -6.919* -3.742* -5.347* -3.439* x 6. Decreasing costs -6.940* -4.380* -6.063* -4.162* -0.602

Notes: ***Significant at 1% level; Numbers of columns correspond to the numbers of strategies on the rows;

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