ECONOMY

Global downturn and lack of proper policies hit sea tourism

Expectations of a tourism boom in view of the Olympic Games are proving far-fetched due to the global downturn in the industry and the government’s negative policy, which reduced advertising, says the president of the Greek pleasure boat operators association (EPEST). Now all hopes have been shifted to the period after the Games. In this interview with Kathimerini, Lakis Venetopoulos notes that the number of Greek-flagged professional pleasure boats (yachts and sailing vessels) shrank from 4,750 in 1995 to an estimated 3,000 in 2002. The vacuum has been filled by third countries, like Croatia and especially Turkey, which has expanded its presence in the industry in the Aegean. There is now one year to go until the Olympics and all the indications are that Greek tourism has reaped no benefits in the pre-Olympic period. Why do you believe this has happened? Indeed, reality has belied the expectations – at least so far – of everyone in the tourism industry that the number of arrivals would rise steadily in the years prior to the Games, which induced most firms to make new investments. The reasons are many and well-known, mostly due to September 11 and the many hot spots around the world which had a negative impact on the psychology of tourists. Other important reasons were the world economic downturn in the main countries of origin and the introduction of the euro, which caused the competitiveness of our tourism product, already in trouble, to dip further. Furthermore, we have not managed to tame profiteering phenomena. There has also been a substantial lack of a national policy to tap the potential offered by the Games. On the contrary, in an erroneously conceived cost-cutting policy, instead of exploiting our comparative advantages and the favorable moment, we reduced the country’s tourism promotion abroad. Is it really the number of visitors or their quality and income level that counts? The quality factor and average duration of stay are no doubt significant and everyone has realized the importance of moving in this direction. Nevertheless, we cannot ignore the fact that many areas are not yet ready to receive this segment of clientele, either because of lack of infrastructure or the mentality of local organizations. As infrastructure improves, I believe we should be primarily looking at lengthening the tourism season and adapting our industry model to those of France, Italy or Spain, for instance, instead of Turkey’s or Egypt’s which, due to huge cost differences, we are no longer able to compete with. But whatever the case, what counts above all are the balance sheets of individual businesses. These have been presenting anything but a positive picture in recent years, whether arrivals are going up or down. How has the sea tourism industry fared this season and what are your projections for the next one? Due to comparative advantages, our sector should be the spearhead of the industry. Unfortunately, it has been in crisis since September 11. Manned vessels in particular, which address the upmarket sector, have recorded a more than 50-percent fall in rental days this year and last compared to 2001. The non-manned segment was in line with the tourism sector as a whole, showing a one-digit percentage decline. The importance of sea tourism to both the national and the local economies of isolated islands has not been well understood by central authorities – which goes for the industry as a whole, now the main growth lever for our economy and with prospects of becoming more so in the future. As a result, the number of vessels has declined. It is incomprehensible why no form of subsidy whatsoever for employment, the building of new vessels, upgrading the accomodation facilities of vessels at least, or even improving the safety of navigation has been provided for in the development programs in force. Has there been any progress in improving infrastructure in sea tourism? It would be unfair not to recognize the considerable upgrading being attempted for the Olympic Games. But so far this has not included marinas. In marinas such as Flisvos and Zea, which have been leased to private firms, upgrading projects have not yet begun and will not be ready for the Olympics. The reason for the delay is none other than outrageous red tape. Are there any positive points in the draft bill on sea tourism currently being debated in Parliament? The draft bill is surely aiming in the right direction, of adaptation to European realities, even with a considerable delay. It nevertheless contains elements that will deter new investment in the industry. The main problem is that, in contrast to the vessels sailing in Greece under other European flags, Greek-flagged vessels will be burdened with an additional 4-8-percent costs for VAT on rents, unless sailing for foreign ports. We fail to see why foreign tourists will prefer to rent Greek vessels. Finally, it would be an omission not to note the valiant efforts by the former Merchant Marine Minister Giorgos Anomeritis to complete this draft bill, as well as the strong interest shown by the incumbent minister Giorgos Paschalidis and the New Democracy and Synaspismos Left Coalition parties in pushing the bill through for speedy voting. Who are Greece’s main competitors in sea tourism and what have they done to support their sector? The Carribean, which has been inundated with vessels of all flags, Turkey, which offers cruises around the Greek islands similar to ours at a cost at least 50-percent lower, and Croatia, which has registered a huge growth in the last three years. They have greatly improved infrastructure, provided strong incentives for construction and have very low labor costs, both in construction and operation.