Tourism’s woes are structural

The government is trying to steer the country’s tourism sector out of the stormy waters it has found itself in for the past four years into a safe harbor. For a number of reasons, even in this Olympic year, incoming tourist traffic is at even lower levels that in previous years. As early as March, it was clear that the situation was irreversible since any actions or policy decisions have to be planned well in advance of the season. Only emergency measures can be taken once the tourist season has begun. Market sources put this year’s reduction at 8 percent. For the Greek economy – and society – this means 20,000 fewer jobs, revenue losses of 800 million euros and a 0.7 percent reduction in the GDP growth rate. To these should be added the estimated 2 billion euros lost during the crisis of the previous two years. One of the most important reasons for this crisis is that any tourism policy and promotion of the country as a destination has not been linked to the Olympic Games. In the seven years since Greece was awarded the Games, no comprehensive operational plan has been drawn up to develop the industry. Any spasmodic policies were blindly conceived, with no consideration for the competition, international trends or rapid changes in the world tourism industry. These, however, are expected to be addressed by the Tourism Development Ministry in its a new 10-year plan in the fall. So, although Greece’s tourism industry was in crisis, previous political leaders carefully concealed the problem, based on deceptive data from the Greek National Tourism Organization (GNTO) that included economic immigrants from Albania (about 1.5 million of them in 2002) in arrivals figures and that also presented a false picture of Greek tourism, ignoring observations by industry representatives. Another issue that has to be faced is the quality of services provided and an improvement in state infrastructure, particularly in the provinces, since the Olympic Games preparations have led to a considerable improvement in Athens. Golf courses, yacht marinas, theme parks and other investments being made at a rapid rate in other countries such as Turkey and Spain should have led to a change in the character of Greece’s tourism product. The new leadership of the tourism sector will have to rise to the challenge of opening up new markets by overcoming problems such as visa procedures and air links with Greece, so that it will no longer be so dependent on the British and German markets (about 45 percent of current arrivals), with everything that entails, given the problems in these countries’ economies. On the other hand, foreign groups have characterized Greece as a place to avoid for tourism investment purposes, chiefly because of bureaucratic complications. The new development law, oriented toward supporting other sectors of the economy, without taking into consideration the tourism market, has not sufficiently covered the Greek tourism industry. The only solution found by Greek hoteliers in recent years, under pressure from foreign tourism organizations, was to continually lower prices. This year, apart from the fact that many hotels have not opened at all, or have delayed opening, in many cases prices are marked down lower than operating costs, and lower even than those of other destinations considered cheap, such as Turkey. The problem will continue into next year, since foreign operators are already signing or have signed up for next year, demanding further reductions of 15-20 percent from Greek hoteliers. One of Greece’s major disadvantages as a holiday destination, at least as it is perceived abroad, is the cost of accommodation and food, which is seen as out of proportion to the total vacation package (air travel and hotel). Tourism Minister Dimitris Avramopoulos told Kathimerini the target is to exploit the post-Olympic period to the full, by creating a stable taxation framework, attractive incentives for new investments, new inspection mechanisms and a more decisive means of promoting Greece abroad. The first important step to be taken is to pass a tourism bill discussed at a recent meeting between Avramopoulos and Prime Minister Costas Karamanlis, who has shown a personal interest in developing tourism, with a focus on linking it with the country’s cultural heritage. One success to be chalked up to the tourism leadership is the advertising campaign abroad, which is to begin earlier than is customary – in fall – as well as the amount budgeted, expected to be up to 30 million euros, four times that spent last year. Spain has a total advertising budget of 180 million euros and Turkey 115 million, but Greece had only 8 million for its entire advertising campaign abroad. As with the numbers game used for tourist arrivals, here the budget figures were beefed up by including rents and other expenses of GNTO offices abroad. In its effort to reverse the negative climate, the ministry will be working in close cooperation with the Environment and Public Works Ministry and the Economy Ministry. This cooperation will include an attempt to release the sector from the control of mechanisms and persons who have been controlling the GNTO, forging the unsuccessful policies followed in recent years and creating conditions for vested interests to take root.

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