Greece to pay stranded tourists: How this could *really* work

Greece to pay stranded tourists: How this could really work

Manolis Mavrantonakis | Thursday, June 24th, 2010 | 6 Comments »

It makes sense. What with the volcano, the Athens riots and then the strikes tourists may get a feeling that they will be stuck in Greece forever.

Good hoteliers plan ahead – like our client Mr. Argyrakis of the Golden Bay hotel in Malia. Nevertheless there may always be challenges and it’s high time everyone in the hospitality sector chipped in.

This is why I found it particularly important when the Greek Minister of Culture and Tourism Pavlos Geroulanos declared in a recent interview that Greece will guarantee to pay any extra room and board any visitor in Greece pays even if stuck here because of a volcano in Iceland (via BBC news)

To a policy and comms company like SoMaFusion the first question always is: HOW? (There is no press or other release from the Greek Ministry of Culture and Tourism or other information at the time that I am writing this. We are trying to get more info and I will update as and when it becomes available).

Amongst the hundreds of questions that spring to mind here are some:

How will tourists be compensated?
Who will collect the data and process the claims?
Who will be entitled to the compensation and with what proof?
How long between a claim to actually getting the compensation?
What is the level of compensation and how is that determined?
How will fraud be avoided?
etc.

From a policy perspective all those issues need answers if the scheme is to be operational, represent value for money and really be trusted. If it breaks down the damage in trust levels and reputation would be irreparable I would assume.

From a SoMaFusion perspective we need this information so that our clients can work their own contingency plans around it. For example, if a hotelier has a policy to provide accommodation in case of a strike but it’s high season and no rooms are available. Will he be in a position to refer his guest to the national scheme, safe in the knowledge that this will not impact negatively on the hotel’s reputation?

Some models that may first come to mind have significant challenges.

One may think that Greece could operate a HOTEL BASED MODEL whereby each hotelier will claim directly to the Ministry or some other authority. The number of people, paperwork, complexity over price structures (what happens if a room was based on a ‘guaranteed’ model and it didn’t actually have a price assigned for example?), potential for fraud etc. clearly make this a nightmare.

Another option might be a GUEST BASED MODEL where the guest will pay for anything extra and then claim from the Greek state. I think it’s fair to assume that this will require excellent organisation, clear rules, scores of people to take claims, judge, decide, notify, haggle, argue, compensate, avoid fraud. Something like this will probably do a lot more damage than people getting stuck in Greek airports.

I was mulling over this whole issue when I remembered that Sofia has done some work in the past outside SoMaFusion with national schemes and industry certifications. What she reminded me is something we follow as well.

The simplest solution is usually the best.

The market already operates a structure that has the potential to pay stranded tourists. It’s called insurance.

So, here is a rough sketch about how this could *really* work:

Regulate: All hotels have to insure against tourists getting stranded
Regulate: All hotels have to have a policy in place for such occurrences (do I hear “Best Practice”?)
Encourage the market: Insurance companies will create products that fit this model since it will be compulsory.
Engage: with stakeholders and if neccessary regulate. Ensure (via the watchdog) that there is enough competition in the insurance market to guarantee value for money
Take the hit: Insurance premiums should not go up if a hotelier is claiming due to strikes. The strike is not against the hotelier, it’s against the state. Premiums over and above or funding should be provided by the state.
Inspire and help: Create a small and flexible team that will work with all stakeholders and have overall policy overview of this whole project. (thus less salaries, less bureaucracy, less risk for things to go wrong)