ECONOMY

Gov’t braces for repercussions of Iraq war on tourism sector

Prime Minister Costas Simitis is considering taking a more direct responsibility for tourism policy through a group of aides, sources say. Despite reassuring public statements, economic ministers are said to be worried about the impact on the economy of a slowdown in the tourism sector as a result of a war in Iraq. The overall picture of bookings so far leads to the conclusion that many hotels will remain shut next month and a number of large units may not open before the end of May. Employment would be one of the direct victims of a slowdown, which would also affect investment in the medium term due to the lack of liquidity of tourism sector. Tourism industry operators are apprehensive that the effects of a war would be much more serious than those of September 11 were. Another major problem appears to be the recession hitting several large economies. According to official data, bookings from Europe’s largest market, Germany, have fallen less than France or the UK. Simitis’s assumption of a more direct role in tourism is not a new idea. Sources say that this time, however, it is more likely to be realized. An indication of which way the wind is blowing is the invitation by the Hellenic Association of Tourist and Travel Agencies (HATTA) to the premier to speak at their general meeting early next month, the first time that he will address tourism professionals. But Simitis also has to consider the interest shown in the sector by his adversary, main opposition leader Costas Karamanlis. For their part, the Development Ministry and the Greek National Tourism Organization (GNTO) are said to be preparing a batch of measures designed to offset the shortfall in the number of foreign tourists by promoting internal tourism. The campaign will include subsidization of accommodation and cruises for working people, depending on the availability of additional funding. GNTO Chairman Yiannis Patellis met industry representatives yesterday for a discussion on how to improve similar past schemes and other issues. Decisions included the promotion of joint advertising with foreign tour operators. The chairman of the Hotel Chamber, Makis Fokas, says there is a need for coordinated promotion and advertising of Greek tourism after the crisis is over. Hoteliers’ representative A. Andreadis, who is a candidate for chairman in forthcoming elections, blames both professional bodies and the government for being unable to formulate a policy that would deal with the crisis. Citing contacts at the ITB tourism exhibition in Berlin, which ended last week, he says bookings for Greece this year are down about 20 percent and deteriorating. «Officials talking about a rise in bookings are out of touch,» he says. Niki Kapsi, HATTA’s deputy chairperson, says the crisis is hitting all branches. As firms cut back on expenses, competition is rising in conference tourism and last-minute bookings are becoming more frequent – traditionally seen only in packages. The optimists counter the gloom, saying the subdued climate is only temporary, until the situation in Iraq becomes clearer. They note that despite initial forecasts of a 20 percent fall in the number of arrivals last year, the drop only came to 2 percent.