COVID-19 AND HOTEL ENTERPRISES IN GREECE

7 April 2020

Pursuant to Ministerial Decision number 18152, which has been published ιn the Government Gazette number Β’ 857/14-03-2020, the operation of principal and non-principal touristic accommodation is temporarily prohibited for preventive purposes of public health, in the entire territory for the period from 15.3.2020 to 30.4.2020. Apparently, for the time being we cannot know whether this measure will be extended, as it depends on how the situation with the COVID-19 pandemic develops. There is no doubt though, that the current situation is unprecedented and consists of a matter of force majeure.

In view of this, the existing agreements between hotel companies and travel agencies concerning the 2020 tourist season apply as follows:

  1. If Greek law is applicable, then the hotel business is not responsible for the non-provision of services agreed (room rental, food and other services), and the travel agency is relieved of the obligation to pay the price agreed for the respective period and, if he has paid for it, it may seek it in Court under the provisions on unjust enrichment. It is customary for contracts to include a special term that provides for any contracting party or only for the party of the travel agency (and) the right to terminate, with or without notice, due to force majeure, in the case where the event of force majeure lasts more than a certain period of time (e.g. 30 days). However, even in the absence of such a provision in the contract, the right to terminate can be exercised by any contracting party by invoking a significant reason, which justifies the complaint at all times in all standing agreements, without prejudice to its non-abusive exercise, e.g. in the event that the period of non-operation (without fault) of the hotel, in relation to the duration of the contract, is short.
  2. If foreign law is applicable, which is the most common case when the travel agency is a foreign company, then it should be checked on the one side what the applicable law provides in case of non-compliance with the hotel company’s obligations and on the other side examine individual terms of the contractual text for the rights granted to the parties. As a rule, however, there will be no liability of the hotel for breach of contract.
  3. In any case, the exact text of the contract signed with the travel agency is crucial, in particular the terms of payment, and any advances paid by the hotel. Ultimately, the resolution of issues arising from the application of the aforesaid Ministerial Decision depends on the specificities of each case and the opinion of a qualified and reliable legal advisor should be sought.