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Terrorism Crisis Hits Greece’s Cruise Industry Hardest, For The Moment

Greece’s cruise industry, because a significant portion of its business comes from North American customers, is in for a tough time. Along with this, the industry also has to deal with the possible surge in oil prices, the likelihood of a global recession, the difficulties in air travel and the psychological shock from the terrible pictures of the World Trade Center towers shown worldwide. All these are expected to play a significant role in shaping the industry both in the short term and long term.

For the moment, however, many cruise passengers have been left in limbo by the tragedies of last month. Due to altered and cancelled flight schedules, many passengers have been unable to reach cruise ports or continue planned itineraries. As well, strict safety measures have been initiated at cruise ports, including all major Greek ports, especially Piraeus, Patras, Santorini and Mykonos.

And although local cruise companies say little has changed with regards to schedules, worldwide, all major cruise lines are releasing cancellation and sailing information on almost a daily basis.

Business is bad. In Greece, immediately after the attack, less than 5% of his booked cruise customers for the week after the terrorist attack arrived to sail, said Marios Trivizas of Kentavros Travel.

But it’s not just the cruise industry, but the entire tourism industry that will suffer. Already some chartered flights to domestic destinations have been canceled. The majority of cancellations were for the Athens area and were made by a large number of the 250,000 Americans who visit Greece annually.

This is not surprising as global reservation systems, such as Amadeus, reported a 75% reduction in U.S. travel bookings in the week following the event and an overall worldwide drop of 28%.

Closer to home, Spyros Divanis, president of the Athens Hotels Association, has said that incoming tourists to Athens were down by 25 percent. He said that apart from canceled U.S. flights, cancellations from European countries have also been coming and concerned October bookings.

But the biggest blow to the tourism industry is the number of scheduled conferences in Europe that have now been put on temporary hold.

Sources say the fate of the tourism industry in the next session will depend on the U.S. reaction to the terrorist attacks and where it will take place. Traditionally, bookings for next year start in October. The new crisis will now determine this issue. But Development Minister Nikos Christodoulakis and Evgenios Yiannakopoulos, chairman of the Hellenic Tourist Organization, said they were optimistic that the industry would recover once the situation regains normalcy.

Meanwhile, hoteliers asked the minister to let them proceed with an evaluation of the costs to the industry because of the U.S. crisis and possibly come up with a package of measures. No doubt some assistance will go to Europe’s airlines, including Olympic.

In the U.S., the government there approved measures that provide $5 billion in direct federal aid and $10 billion in loan guarantees for an industry that has announced tens of thousands of layoffs since the terrorist hijackings.

The measure also offers the industry federal help with rising insurance costs in the wake of the terrorist strikes, and limits airline liability in any federal lawsuits that could result from the deadly hijackings.

Many voted for the bill because of last-minute additions that force airlines not to shut down business in small communities and a provision to allow the government to receive airline stock options as collateral for the loan guarantees.

For the consumer, prices are bound to increase. Nevertheless, for the immediate future, travel specialists suggest that we expect long delays as airports implement the increased security measures mandated by the various departments of transportation. These include more stringent searches, random identification checks, and higher levels of surveillance.

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