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Analysis: Greek tourism industry fights back

21 May 2012 by BusinessTraveller
Erechtheum at the Acropolis
Among all the headlines over Greece in recent weeks, the most bizarre is probably over the possible return of the drachma. Reports of currency specialist De La Rue hunting out old templates necessary to start printing drachmas “in a hurry”, along with concerns expressed by holidaymakers that the Euro might switch to the drachma while they are enjoying their summer sun have had predictably awful affects on bookings to Greece. Speaking last week, Greek entrepreneur, hotelier and president of SETE (Association of Greek Tourism Enterprises) Andreas Andreadis said that the immediate effect was for bookings to fall by some 50 per cent, and remain down by at least 25 per cent a week later. Tourism makes up some 19 per cent of the country’s GDP and Greece in general and the tourism industry in particular can’t afford to lose tens of thousands of bookings in this way. In the circumstances, SETE is making a big push to reverse the trend. It isn’t just the currency problems which are worrying potential visitors, however. There is also the possibility of widespread strikes, which can have a disastrous effect on holiday arrangements, and the uncertainty over what will happen after June 17 if the Greek people vote to leave the Euro, as the election is increasingly seen as a referendum on continued membership. In reply to this, SETE says that the honeymoon period for the new administration will ensure that strikes are minimal over the holiday period, and besides, 80 per cent of Greeks have voted to stay with the Euro. They also make the practical point that Greece can’t be forced out of the Euro, but has to leave, and even if the decision to leave is taken it would take months for the technical preparation as well as printing bank notes before it happens. They describe the vote which has just taken place as a vote of anger, especially by the youth of the country who are suffering from 45 per cent unemployment in the 15-24 age group, but say that the election on June 17 will be more realistic, with the politicians of the various parties also adapting their policies. As far as business travel and meetings are concerned, the effect of all of this has been similarly damaging. Andreas Stylianopoulus is President and CEO of Navigator Travel & Tourist Services who are marketing representatives for Royal Caribbean and Celebrity Cruises among others. He is clear that the unrest has been very bad news for meetings and incentives planners who crave certainty above all else and like to book many months or even years in advance. The irony is that for these type of trips planners simply use a base outside Greece then tour the Eastern Mediterranean in any case, losing the country much of its valuable revenue. Nevertheless his message was that Greece will always be popular as a destination, it is becoming less expensive to visit, it is still one of the safest countries in Europe, and new legislation and tax reforms along with privatisations are adding to efficiencies and investment in the infrastructure, which will benefit visitors. So what’s the answer for Greek tourism? Well of course one part of it is telling its story, which is why it gathered press together to give an alternate view to the one appearing in Europe’s newspapers. Read the media, and it is inevitable that Greece will leave the Euro, and possibly in a “disorderly” manner. Speak to these entrepreneurs and bank officials – we were also given a presentation by the Deputy Director of Eurobank Nikos Karamouzis – the message was very different. Greece’s interests, strategically, financially and in terms security are in the Eurozone. The idea that if Greece left the devaluation which followed would suddenly make the economy competitive is misguided. It would do nothing structural for the economy, would make imports prohibitively expensive – the country has a current Euro12 billion deficit in energy which would increase, and interest rates would skyrocket. Instead Greek tourism is looking to new markets. The country is geographically well placed for new markets. It currently receives one million visitors annually from Russia, and believes that if the country could be granted special status under the Schengen agreement, this could quickly rise to three million. A similar measure was put in place for Serbia 2010. In 2009 Greece had 400,000 visitors, the following year 700,000 so there is a precedent. In the meantime, consider that prices of holidays in Greece have dropped around five percent from last year, and in real terms as far as the UK is concerned because of currency fluctuations by 15 per cent. In those circumstances, Andreadis is undoubtedly correct in saying that “It’s a good moment to visit Greece”. Greek hotels are charging their lowest prices in a decade, with most of them having been renovated during that decade – in readiness for the Olympics - and so are offering a good product. Hoteliers have told me that they had an average corporate rate in their four star Athens city-centre hotels of €145 in 2004, and this year are offering those same rooms on the same rate for €100. It would be a brave business traveller who went to Athens seeking new business, but whether for business or pleasure, the story from Greece is that the country is open for business, and will remain so. Tom Otley
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