ECONOMY

The effect of good tourism marketing is undercut by high costs, poor facilities

The Economy and Finance Ministry’s hopes of maintaining the country’s growth rate at around 3.8-3.9 percent (despite the pessimism of the European Commission and the Bank of Greece, which predict a 3 percent rate) rest on the recovery of the construction and, especially, tourism sectors. Following four years of decline, with falling numbers of foreign visitors and foreign currency inflows shrinking, hoteliers and government officials are hoping that 2005 will prove to be the year of the great rebound, bringing the country back to the brighter days last seen in the 1990s. Professor Takis Pavlopoulos, director of the Tourism Studies Institute, believes that tourism this year will increase by 6 percent based on qualitative analyses, as sufficient quantitative data are not available yet. He explained to Kathimerini that his optimism is founded on the following parameters: First, the country’s positive image internationally, after the successful staging of the Olympic Games, has improved further, thanks also to the impressive promotional program undertaken by the Tourism Ministry. It is estimated to have been the most successful campaign, both in terms of quality and quantity, for many years, costing some 40 million euros. Second, the intensive advertising campaign should encourage many of its traditional visitors to return, those who in the last four years had turned to other destinations. Advertising may have a temporary impact that will only become permanent through continual improvements in tourism infrastructure, starting with the poor road network all the way down to taxi drivers who prey on unsuspecting tourists. In the western Peloponnese some luxurious hotel units have been brought to market, a number of which have received international awards. However, tourists visiting them must first land at the Third World-like Araxos airport, where charters land, and tackle the endless country roads. Third, our main rival market, Turkey, and to a certain extent Egypt, are having problems this year. After its massive rise in tourist arrivals over the last few years (27 percent in 2004), Turkey has exhausted its potential, while Egypt has certain security worries. Nevertheless, Pavlopoulos is not as optimistic when it comes to revenues from tourism. He suggests, as hoteliers complain, that the steep discounts offered this year will definitely lead to reduced revenues for each visitor. The average revenue per tourist could be lower than last year, so the rise in tourist numbers is not certain to bring in more foreign currency. The successful campaign is therefore a very positive development, but, as experienced hoteliers note, our tourism industry’s problem is not a lack of appropriate marketing but rather its structural weaknesses. Tourism enterprises operate under high-cost conditions, being burdened by the highest non-salary costs in Europe (employer contributions to the Social Security Foundation and the Hotel Employees’ Fund), while inflexibility in the jobs market, in a sector characterized by dramatic seasonal shifts in working hours, is the biggest obstacle for its competitiveness. For the official optimism to prove valid and for tourism to regain its strength and propel the economy forward, the government will have to follow a consistent policy of eliminating profiteering and curbing labor unions’ intransigence, which could well cause unemployment to swell in a few years’ time.