ECONOMY

Tourism still a reliable workhorse for economy

The tourism industry this year remained aloof to the effect of rising oil prices, continuing to attract a high number of investment proposals under last year’s incentives law and receiving a higher number of visitors, according to a joint study by the Association of Greek Tourist Enterprises (SETE) and the Athens University of Economics and Business. Despite the rise in the price of oil from about $55 a barrel in January 2006 to more than $75 this month, arrivals in the January-July period were up about 8.5 percent, year-on-year, the study notes. The German market as a source of visitors seems to be the most sensitive to higher oil prices and the US market the least. However, the study urges an intensification of efforts to improve the competitiveness of the tourism sector, noting that this year’s good performance has been partly aided by unfavorable developments in competing destination-countries. According to data separately announced by Economy Minister Giorgos Alogoskoufis yesterday, 37 percent of investment plans submitted, budgeted at around 860 million euros, concern the tourism sector and are estimated to create 2,470 new jobs. Speaking at a joint press briefing after a meeting with Tourism Minister Fanni Palli-Petralia, Alogoskoufis said the government subsidies approved for the 433 tourism investment plans totaled 375 million euros. The investment incentives law has attracted a total of 1,452 plans, budgeted at 2.32 billion euros. The approved subsidies total 972 million euros and the new jobs are estimated at around 7,400. Alogoskoufis reported that tourism revenues totaled 11 billion euros in 2005, from 10.3 billion in 2004. Palli-Petralia said the huge importance of tourism is shown by the fact that each euro spent by visitors gives the economy a boost of two more euros. At their meeting, Alogoskoufis and Palli-Petralia discussed tapping the assets of state-run Hellenic Tourism Properties and the new investment law which will come into force on January 1, 2007.