Greek tourism looks unlikely to recover from slump in 2003

The prospects of a recovery of the Greek tourism sector from this year’s slump are uncertain, says Nikos Papathanassis, managing director of TUI Hellas, a major tour operator that brings to Greece about 1 million tourists annually. «Tourism entered a new era globally after the September 11 attacks in the USA. The upshot of those events has been to bring closer to the surface problems and make them more difficult to solve. Greece is no exception,» he says. Papathanassis notes that Greek tourism is facing increasingly tough competition from lower-cost destinations in the Mediterranean, such as Turkey, Egypt, Tunisia and Morocco, as well as from Spain and Portugal. Meanwhile, in destinations such as Croatia and Bulgaria, business was up by about 20 percent in relation to last year. He stresses that Greece must formulate its investment policy in tourism according to the latest trends in the international tourism market, such as the development of facilities for special categories, such as hotels for families or retirees. Other destinations, he notes, have already moved in this direction but Greece has not. He also considers necessary an improvement in the quality of services. «The problem is deeper than it appears and concerns the mentality of Greeks, which cannot be solved with a mere advertising campaign. Unfortunately, the crisis which Greek society is going through also affects our behavior toward the tourists. Perhaps a medium- to long-term solution should involve relevant programs in all grades of education.» He believes that if such a revision of policy, according to market trends, does not take place, the expected benefits from the Olympic Games of 2004 will only be temporary. «This does not concern just Athens but the whole of Greece. Advertising alone is not sufficient,» Papathanassis says. He forecasts that, according to the indications so far, tourism demand for Greece as a whole next year will remain at the same levels as in 2002, which is about 5 percent down from 2001. In contrast, Spain, which also experienced a slump this year, still has hope of recovery, given that it receives visitors throughout the year. The slump was especially noticeable in the Balearic Islands but the Canary Islands are seeing signs of a recovery. Portugal, which has also seen business fall, has a similar advantage, hoping to restrict losses before the end of the year. Papathanassis is optimistic that the positive elements of recovery will prevail in Germany, the biggest European source of tourists to the Mediterranean. The number of German visitors abroad was considerably lower this year, and more Germans took holidays at destinations nearer to home than any other year. Papathanassis thinks that last month’s German elections played a partial role in this but says any recovery in the demand for Mediterranean destinations, which will also require a change in psychology, will only become evident in 2004. He points out that an increasing trend in last-minute bookings, more evident this year, is not good for the big tour operators or the hotels they do business with, which cannot plan ahead. He says that as of the coming season, TUI will adopt a new policy in an attempt to gain earlier bookings. This will include significant discounts for bookings from this November for next summer. TUI is also proceeding with plans to move into the domain of scheduled flights, cooperating with a low-cost airline that will initially operate eight planes serving destinations near Germany. As regards TUI’s results, despite the adverse conditions in the industry and the slump in the first half, there is still hope for an improvement on last year. This will occur as a result of either an improvement in demand or from the planned shedding of the company’s activities in the energy sector.