Rethinking tourism policies

Nikos Skoulas has been closely linked with Greece’s tourism policy. During the 1980s and 1990s he served under the Socialist government no less than three times, either as deputy national economy minister in charge of tourism or as general secretary of the National Tourism Organization (GNTO). He has also headed the Hellenic Center for Investment, a government body, and has taken part in private sector initiatives in the sector. He is thus in a unique position to talk about tourism, both as an administrator and as an operative. Five years after his last stint at GNTO, Skoulas spoke openly about the government’s responsibilities in solving some basic problems that have hindered the further development of tourism. He does not absolve himself, and accepts his part of the blame. State administration, which he calls «inflexible and largely corrupt,» is largely to blame for the lack of investment, according to Skoulas. However, he is not despairing, at least not yet. He believes that if certain decisions are made, Greece could make great strides internationally as a tourist destination. A loss of competitiveness is Greece’s main problem, Skoulas says, by which it has been steadily losing its competitive edge. «The product we offered for many years – islands, sun, sea, antiquities – has a high production cost and an unfavorable price/value ratio. New competitors in our area are offering similar products at lower cost. Moreover, Greece’s tourist product is being offered under conditions of open competition, while the tour operators that we depend upon to bring tourists to our country operate as an oligopsony. «Downward pressure on prices and the tendency for many hoteliers to panic and accept these prices because they are heavily indebted creates a vicious circle of decreasing quality,» Skoulas says. The solution would be to move from mass tourism to a more complex, eclectic model, where top-class hotels offer special facilities that will enhance the stay of customers, such as golf courses and other sporting installations, and even cater to their business needs, such as convention centers. This would also help extend the tourist season from the current five to seven months, at least, and potentially make Greece a year-round destination. Skoulas notes how Portugal, for example, has succeeded in attracting 29.5 percent of its annual tourist arrivals from November to March, a period during which hotels in Greece are mostly closed. Spain draws a quarter of its tourists during those same months. Among other things, Portugal has built 55 golf courses which attract tourists even in winter because of the mild climate. By contrast, Greece has only five golf courses. In Spain, the island of Mallorca alone has 18 courses. Asked why these things didn’t happen under his watch, Skoulas is candid. «I failed to convince my colleagues in government, especially those in charge of the country’s finances. The fact that no foreign investments were made in tourism should have worried us and it didn’t. A succession of development laws did not help, either,» he says. A way to help implement such investments would require changes in the development law, essentially a law on incentives for investing. First, he says, an investor who offers a property of about 70 to 100 hectares for development should be favored, not penalized by the law, which does not include it among the investor’s contribution toward the project. Second, the subsidy offered – up to 40 percent of the cost of an investment – does not mean much when the ceiling applied by the law is so small. Third, the rule prohibiting buildings within golf courses should change. Fourth, municipal authorities, the Church, the GNTO and other owners of large plots of land should be encouraged to participate in golf course-building schemes. Skoulas offers the example of 32 hoteliers and a mayor in Crete having to buy literally hundreds of small plots, with all the bureaucratic hassles this entailed, to create the first private golf course at Hersonissos, east of the town of Hania. On the positive side, Skoulas notes that, thanks to European Union funds, a lot of new infrastructure is being created. However, we are still at the building stage and it is too early to see results. He also points to better-educated managers but deplores the lack of a university course on tourism.