Tourism needs new hotspots, lower labor costs

Greek tourism requires a long-term policy that will be based on reducing labor costs and creating new destinations, an Alpha Bank report suggested yesterday. The effort to maintain strong demand for the Greek tourism product requires a long-term strategy aimed at reversing the negative course of the overall economy’s competitiveness. To this end, the report argues, Greece has to make tourism more competitive through a decline in labor costs, particularly in the peak tourism season. The state should also do all it can to turn areas that remain untapped into new tourism hotspots, even though many of these already have exceptionally improved economic and social structures. The key is attracting the appropriate investment interest to them, the report concludes. However, the first signs are very encouraging this year: In the first two months of 2008, revenues from tourism posted a 14.6 percent year-on-year rise, from a 0.7 percent annual decline in 2007, Alpha Bank noted. Another report by the Economic Studies Division of the ICAP research company showed that Greece has four main structural problems that hamper the further development of its tourism. They are: the concentration of tourism-related businesses in specific regions of the country, the seasonal character of demand, the insufficiency of supportive structures and the dependence of Greek tourism companies on the major foreign tour operators. ICAP finds that the government’s new national strategy for tourism can be summarized as the modernization of the product, the upgrade of tourism-saturated areas and the systematic promotion of the country across the world. The report recorded that Crete came first in the capacity of beds in Greece in 2006 (21 percent), followed by the Dodecanese (17 percent) and Macedonia (14 percent). In total there were 9,111 hotel units with a combined capacity of 693,252 beds. The majority of hotels (4,460) are Category C (roughly equivalent to three-star). National Statistics Service data showed that about 17.3 million tourists arrived in Greece in 2006, while tourism revenues reached 11.357 billion euros that year. Three-quarters of the 57.8 million overnight stays were by foreigners. Crete and Rhodes are considered the most likely Greek destinations to obtain a direct air link with Dubai, as a new airline will soon begin operating in the Arab emirate. The news emerged from a meeting yesterday between Tourism Development Minister Aris Spiliotopoulos and the president of Dubai’s civil aviation authority that upon the creation of the new airline, a year from now, it will include Greek destinations on its schedules. Other Dubai officials said there is particular interest in vacation packages that include sea and mountain tourism and that a movie to be produced in the Arab country is to be filmed in Greece.