Tourism may shave 2-3 pct off GDP

Drop in arrivals and revenues to cause loss of up to 100,000 jobs in 2012 By Stathis Kousounis

Gross domestic product could go down two to three percentage points (or 4-6 billion euros) by the end of the year, and up to 100,000 jobs will be lost if tourism revenues drop by 10 to 15 percent this year compared to last year, according to the head of the Hellenic Chamber of Hotels, Giorgos Tsakiris.

Similarly, the Association of Greek Tourist Enterprises (SETE) estimates that the targets of 16 million arrivals and 10 billion euros of revenues set for the industry for 2012 are impossible, especially when one considers that the figures of the first couple of months compiled by the Bank of Greece have shown a drop in both.

?Sector professionals are trying by themselves, without any state support mechanism or reaction strategy, to tackle an emerging trend of decline in tourism revenues that could reach up to 10-15 percent,? the head of the hoteliers? chamber told Kathimerini. He stressed that the considerable downturn in bookings so far this year illustrates the haphazard response to tourism issues that the state has shown time and again.

SETE added that the 44.7 percent drop in revenues in January and February 2012 year-on-year and the 11.1 percent slump in arrivals are estimated to have continued at roughly the same rate for March and April, given that the necessary measures and structural changes have to a great extent not been applied in practice, while the economic crisis in Europe has deteriorated.

?A country like Greece that lives on tourism should maintain its value-added tax on this product at the same level as its direct competitors, i.e. at 5 to 8 percent,? said SETE president Andreas Andreadis.

?The government?s decision last May, in accordance with the troika [Greece?s official creditors], for increasing VAT on food catering to 23 percent, which is among the world?s highest, was entirely incomprehensive and defied any logic. Within a few months it has destroyed thousands of enterprises and resulted in the loss of tens of thousands of jobs, especially those held by young people, while also reducing the state?s revenues at the end of the day,? stated Andreadis.