Hoteliers upbeat but complaints persist, study finds

The majority of Greek hoteliers state optimism regarding industry prospects for the coming years, but a still large number of them express concern in a study prepared by the Foundation for Economic and Industrial Research (IOBE). The main reasons for the optimism cited are the Olympic Games; the completion of a large number of transport infrastructure projects; plans for special tourism facilities, such as conference centers, golf courses and ski centers; better utilization of European Union investment subsidies and the positive results of the country’s membership in the eurozone. Concerns focus on strong competition from emerging rivals, such as Turkey, Egypt, Tunisia and Morocco, besides the traditional ones like Italy, Spain and Portugal. The study notes that Greece devotes much less than some of its rivals to the promotion of its tourism industry abroad: The Greek National Tourism Organization (GNTO) devotes only 18.7 percent of its budget to advertising, compared to 35.7 and 83.7 percent by the respective organizations of Italy and Portugal. Members of the industry also cite still inadequate infrastructure; the absence of specialized regional agencies for planning, marketing and promotion of the industry; the low quality of training; the excessive negotiating power of tour operators; a large number of unregistered accommodation facilities and a lack of consistency in service. Greece’s hotel capacity in 2002 comprised 8,331 units, with 38 rooms on average. According to the IOBE study, overnight stays rose by an average annual rate of 5.1 percent in the 1996-2001 period. August and July were the most popular months, with 20 and 17.5 percent of overnight stays respectively, while December and January lagged with 1.8 percent each. The southern Aegean region accounted for 27 percent of overnight stays, followed by Crete with 20 percent, Attica with 13 percent and the Ionian Islands with 11 percent. The number of arrivals from abroad grew at an average annual rate of 4.3 percent in the 1990-2001 period but excluding immigrants it drops to about 3.4 percent. UK and Germany are the main countries of origin of foreign visitors, with 23 and 20 percent respectively in 2000. Italy, the Netherlands and France followed with much lower rates. The study says that the hotel industry’s short-term and long-term financial situation is not satisfactory, arguing that enterprises face liquidity problems and inadequate return on capital employed in the 1997-2001 period.

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