ECONOMY

Tourism development requires more selective state involvement

Tourism policies envisaging the sector’s further development should provide for less but more effective state involvement and better support of entrepreneurship, according to Stavros Andreadis, president of the Association of Greek Tourist Enterprises (SETE). Andreadis believes – also quoting the global experience – that tourism policy depends only by a rough 20 percent on the responsible ministry, in the case of Greece, the Tourism Development Ministry. The remaining 80 percent, he says, depends on other ministries which are in no way connected to the tourism sector. Indicatively, issues pertaining to town planning, investment, taxation, labor relations, visa issuance, health and safety and transportation are not handled by the Tourism Ministry. Interestingly, the tourism sector’s contribution to the country’s gross domestic product (GDP) currently stands at over 18 percent, while the sector directly or indirectly employees more than 800,000 people. In 2004 and 2005, a negative trend that was prevalent over the previous three years was reversed. Also 2006 and 2007 have been years with positive returns for the tourism sector, with international arrivals rising more than 25 percent, from 13 million to 16 million. In the same period, income from tourism rose approximately by 12 percent, from -10.3 billion to -11.5 billion. In addition to the above considerations, there is a common feeling that the successful hosting of the 2004 Athens Olympic Games greatly helped to improve the country’s global image, significantly contributing to higher tourism numbers in recent years. Improved advertising campaigns and marketing activities have also contributed to bettering Greece’s tourism, though the funds earmarked for such activities stood at a mere 0.5 percent of the income generated by tourism. According to Andreadis, such activities in the future will not bear fruit unless they are based on previous research and analysis of the targeted markets. A very telling fact is that 56 percent of all investment proposals submitted in recent years to the Finance Ministry have been made by tourism sector businesses. Andreadis says more insight should be gained into the role tourism plays in boosting the country’s competitiveness and in fueling growth. He believes it is wrong to view tourism merely as offering a set of services. The tourism economy, according to Andreadis, straddles, includes and affects the supply of products and services from a very large array of businesses, primarily small and medium-sized ones, which operate in a wide range of economic, social and cultural sectors. It is then obvious that the competitiveness and quality of the overall tourism product available to visitors depends on the quality of each of the businesses involved, as well as of the state bodies involved in direct or indirect service provision. The question, thus, for Andreadis, is to incorporate the tourism sector into the national goods and services production system, and establish standing links with other productive sectors of the economy. Local government’s role in the quality of the tourism package was emphatically underlined by SETE’s president. He said the environment where visitors spend their entire leisure time is shaped and maintained by local government bodies. And despite some strong exceptions, this area suffers seriously, he said. The reason? Mostly ignorance, but often indifference, too.