ECONOMY

Many threats to tourism

A large number of hotels are facing financial difficulties as a result of the crisis in the tourism industry brought on by the war in Iraq and the long period of geopolitical uncertainties that preceded the start of the war. It must be noted, however, that the crisis has come at a time when the adverse global economy has created negative consequences on the global tourist flow. The combination of factors has created an «explosive mixture» that is in danger of shaking the foundations of the Greek hotel industry. Sources said banks are especially concerned over the situation in the hotel industry, particularly in the early months of this year’s season with many hotels remaining closed. They noted that many banks have attempted to smoothe things out for hotels by restructuring their loans, allowing the hotels to be at least consistent with their interest payments. This way the loans are updated in the banks’ portfolios and are not burdened with additional charges. It also improves hotels’ liquidity and allows them to function normally. Barring a negative scenario, it should be noted that under certain conditions the Greek tourism industry should see only a small loss from the crisis. The conditions have to do principally with the duration of the war, the capability to regain market share at the end of the conflict and the success of Greece’s advertising campaign in foreign markets. Of course, if US President George W. Bush’s reference to a possible long war comes true, then the consequences on the tourism industry will be catastrophic. The traveling habits of many Europeans this summer will also depend to a large degree on how their leaders handled the war issue. For example, UK tourists will re-examine their vacation plans because of Prime Minister Tony Blair’s open support for the war and the UK’s participation in the conflict. It is not improbable that the UK outflow of tourists could fall substantially, as it would be difficult to bolster a feeling of security for them outside their country. The challenge for the Greek tourism industry is, therefore, how to increase its share in a market that will be reshaped after the war. The problems facing the local tourism industry this year appear to have drawn the attention of political leaders. One example is New Democracy leader Costas Karamanlis who appears to be following events closely. In the past month, he has made three observations, once at the Association of Greek Enterprises conference, another during his visit to the Greek National Tourism Organization’s (GNTO) offices and lastly at the GNTO’s office in Brussels. Sources said GNTO President Yiannis Patellis is looking into the possibility of immediately launching an alternative advertising campaign based on the 2004 Olympic Games in the event of a long war. The campaign would focus on the slogan «Truce – Olympic Games 2004.» The crisis affecting the tourism industry this year could be an opportunity for inexpensive vacations for Greeks. With the exception of August when prices have traditionally been high, Greeks, by booking early and negotiating prices, could get cheap vacations.