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Comment by cyberax | Hacker News Reader

> Those low-wage tourist-oriented businesses are making crazy high margins and paying workers peanuts.

They are really not.

I looked into this in 2019, when I was making a backup plan to get an investor visa in the EU. You can buy a hotel business in Greece for basically peanuts, but it is almost impossible to make _any_ profit without resorting to shady tactics.

That's also why large chains can move in so easily. They can spread a lot of expenses and risks across multiple properties.

It's not a healthy situation to be in.

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I'll trust your analysis, but how do you explain the extremely high prices nowadays? I went to a beach yesterday, and they wanted 75 EUR to rent an umbrella and two beds for a few hours. That's three days' wages for a Greek, how is this a low-margin business? Opex is minimal (basically bar staff), Capex is minimal (a bunch of beds and umbrellas), where's all the money going?

Maybe it's only hotels that are low-margin, with Airbnb being a competitor, but otherwise everything is too expensive for any Greek to afford to go on vacation in our own country any more. The money must be going somewhere.

> The money must be going somewhere.

> with the appropriate kickbacks to the local politicians

The answer is very simple: corruption.

Umbrella business owners are likely paying off the local government and/or organized crime to keep competitors off.

It's down to supply and demand. You get a license from local govenrment, buy some nice furniture, hire some young people, and set up shop offering a nice looking product of beach access with food, drinks, service at your umbrella, for 75 euro. More if you want front row beach access. You do leave the required free space for the public to put down their own umbrella (or not!). If you're the only shop on that particular beach, and it's a nice beach, people will come, and to enough of them your product will look "sexier" than the public beach area. By paying for it, they solve a need of theirs (beach fun) and can also brag about paying for it on social media.

I don't know who you are but chances are they saw you as a guillible sucker. That price is completely unrepresentative for Greece. Two beds and an umbrella for a day range in the 5-10 euro a day and I'm vacationing in Greece since 15 years now so I know. If you know where to look you can find "free" beds and umbrella provided you consume something from the beach bar, starting with 2 euro for a coffee. I'd get like a 5 euro frappe and give 2 euro off record to the lady who hands the tickets and that's it. For a few hours it's enough given that I don't lay the whole day in one place.

Nope, that's just how much beds in Paros cost.

https://www.stats.govt.nz/information-releases/tourism-satel...

Shows profitability for tourism around 20% in New Zealand - although that's on the back of some pretty crappy service jobs.

Elsewhere in the report it implies that the government makes more than 20% (15% sales tax GST, plus other taxes).

I'm not a huge fan of tourism as a sector because it's so cyclical and paid service to tourists is often unpleasant. Although tourism is likely better than some other export earners... But tourism is a more significant earner for Greece: ouch.

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