ECONOMY

Tourism sector is losing its competitive edge

Handicapped by a number of woes that include poor infrastructure, a lopsided tax system and poor hotel management, the Greek tourism industry is fast losing its competitive edge if it has not already done so, the Research Institute for Tourism (ITEP) said yesterday. Greece’s inability to counter competition from other countries has never been more evident than in the falling numbers of incoming tourists in the wake of the September 11 events, newly elected ITEP President Mari Daskalantonaki noted. She said that bookings by the major tour operators to Greece have declined by more than 20 percent. In response to the lower tourist traffic, tour operators are currently putting the squeeze on Greek hotels to cut their rates. Daskalantonaki, however, urged hoteliers to consider the long-term consequences of price cuts. «We must be very careful. Uncontrolled price cuts will affect future seasons as it will be difficult to reverse them later on,» she said. They have also proved to be unsuccessful in improving the situation. ITEP said its study on the tourism industry’s competitiveness showed the sector started losing ground to other nations in the 1990s, with the rate of growth in tourist arrivals slowing down dramatically compared with other countries. The tourism think-tank said the tourism industry’s deteriorating competitive position whether in terms of pricing, quality or value for money can be blamed on a number of factors, some of which are endemic to Greece and others obstacles erected by the government. ITEP’s study noted that Greece’s geographical location and its heavy dependence on tour operators for bringing in tourists via charter flights put it at a disadvantage compared with other more easily accessible countries such as Italy, Spain and Portugal. The tourism sector’s seasonal nature and inadequately trained personnel are other drawbacks. The industry is further hampered by poor management at local hotel chains, the majority of which are small-scale and in the C category. The study said the high costs of bank financing, hefty taxes and poor transport infrastructure are also to blame for declining tourist traffic. Faced with these liabilities, Greece’s natural assets, namely its rich cultural heritage and archaeological treasures, do not have the impact they should in attracting tourists to the country. According to Bank of Greece statistics for 2000, the tourism sector accounted for 18 percent of Greece’s gross domestic product, with tourist receipts exceeding $9 billion.