The current debate on whether the construction of new luxury hotels in Athens should be subsidized leads us to miss the point. The government has been trapped into focusing on Athens, failing so far to promote the benefits of the Investment Incentives law for the construction of new high-quality hotels in the rest of Greece. For better or worse, the heart of tourism does not beat in Athens but in the countryside. The vast majority of the 15 million foreign tourists visiting Greece annually choose destinations outside the city centers. This does not mean that city-break tourism models should not be developed; it is just that priority should lie in improving the countryside’s tourism product. Athens as a destination has gained significantly from the successful Olympic Games both in public infrastructures and in improving its tourism product. The objective is not to build one or two or even 10 new hotels in Athens; it is to ensure existing Athenian hotels are viable by imposing healthy competition rules. If we take a look at Cyprus, there is a revision of tourism policy objectives. The main aim is to realize investments that attract visiting groups with special interests and a high income level. Following the pattern set by other developed tourism destinations in the Mediterranean, Cyprus places emphasis on golf development, operation of modern marinas and promotion of outdoor tourism so that within five years its tourism product will become diverse. Not only do they avoid subsidizing new hotels, but they also reject applications for new units if they do not serve the aim of attracting quality tourism. In Greece there is talk of such things as golf courses and marinas, and subsidies are handed out for the construction or modernization of hotels. But unlike anywhere else in the world, many hotels with town-planning issues pending can still operate. Since 1994 some 80 percent of hotels have had such issues outstanding. The abandonment of tourism undoubtedly amassed many problems, leading to the crisis of 2001-2004. The maintenance of the rising course of the last two years will depend on the realization of reforms announced by the government. Quality diversification should be the priority, not the number of tourist arrivals.