Greek Tourism Expected To Rise In 2011, Deputy Minister

The Greek government places great importance on the tourism sector as it can help the country survive the economic crisis, Deputy Tourism and Culture Minister George Nikitiadis told journalists during his visit last month to the global meetings and events exhibition EIBTM in Barcelona, Spain.

According to press articles, when asked in regards to Greece’s situation following the activation of the support mechanism for Greece by the International Monetary Fund, the deputy minister said that within a very short time Greece’s image changed and prices dropped so the Greek tourist product would become more attractive.

Mr. Nikitiadis added that the recent reduction of the VAT on accommodation facilities (from 11 percent to 6.5 percent) was a major break for Greek businessmen and he expressed optimism in regards to this year’s foreign arrivals.

“According to forecasts of international tour operators for 2011, we will see a five percent increase in tourist arrivals to our country,” he said.

“The establishment of 52 weeks of tourism in Greece is our goal,” Mr. Nikitiadis told journalists and added that the new tourism strategy would win back what had been lost from the UK and German markets.

Press articles said that UK and German travelers opted for other, less-expensive, destinations over Greece such as Turkey and Egypt as a result of the economic crisis.

It is safe to say that the Greek tourism sector’s New Year resolution is to close the cycle of negative figures of the last two years, during which some 1.9 billion euros in revenue were lost.

Experts say the reduction of the VAT on accommodation facilities is a key weapon to achieve this as, according to forecasts, arrivals of foreign visitors, overnights and revenue would take a turn for the better.

According to reports, the VAT reduction measure is estimated to be a 200 million euros loss for the government, while the Institute of Tourism Research and Forecasting said the reduction would bring extra tourism revenue of 630 million euros in 2011.

Greek National Tourism Organization (GNTO) President Nicolas Kanellopoulos also showed signs of optimism for the course of Greek tourism in 2011.

At a recent event, Mr. Kanellopoulos said the GNTO’s credibility in the international media has been restored as settlements were made in regards to the organization’s debt to foreign media outlets.

“At this year’s WTM in London, the chairmen of large foreign media outlets expressed their satisfaction with the GNTO’s consistency and promised free promotion of Greece through their media,” he said.

He added that, according to forecasts, 2010 would close with a slight increase in arrivals.

In regards to arrivals and revenue for 2010, the latest statistics show that Greece suffered the most in relation to competing destinations in the Mediterranean basin.

According to statistics from the Association of Greek Tourism Enterprises and the Bank of Greece, air arrivals at major Greek airports decreased by 0.67 percent during the first ten months of 2010, compared to the year before, while in October the fall in arrivals reached 0.51 percent.

During the January-September period, revenue declined by 6.9 percent compared with the corresponding period of 2009 and reached 8.57 billion euros (a 636 million euros loss). For the month of September revenue dropped by 5.1 percent.

Despite the negative figures, the Culture and Tourism Ministry appears optimistic as it is convinced that Greece’s revamped marketing campaign abroad in combination with efforts such as attracting low cost carriers to Greece and lifting the cabotage restrictions on non-European Union-flag cruise ships will turn the situation around.

“How tourism performs in 2011 will be very important, perhaps the most critical component of the country’s growth next year,” Nikos Magginas, an economist at the National Bank of Greece, told the foreign press in late November.