ECONOMY

NBG report forecasts a 7.5 pct rise in tourists choosing Greece in 2005

Tourists visiting Greece will increase by 7.5 percent in 2005, exceeding 13.5 million this year and 14 million in 2006, a National Bank of Greece (NBG) report said yesterday. The main factors for the rebound are the renewed advertising campaign and the impact of the Olympic Games, which are expected to draw an additional 1.4 million tourists. This will balance out the reduced competitiveness of the local tourism product in terms of prices. For the rise in Greek tourism to continue, the report stressed prices must become more competitive. Last year’s decline in arrivals will push hotel prices lower, the NBG report suggested, so tourism revenues will rise less than arrivals. The tourism sector will also increase its effect on domestic economic activity from 0.5 percent last year to 0.9 percent in 2005. It accounts for 16 percent of gross domestic product and for 18 percent of total employment. Greece ranked 15th in the international arrivals chart in 2004, receiving 90 percent of its visitors from Europe. A challenge for the country’s tourism is that Greece is now a «mature» destination with limited potential for further development. Any margins for expansion are limited to seasonal growth, as 65 percent of tourists visit Greece in the summer months, compared to 45 percent to the other Mediterranean countries, the report concluded.