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Tourism Industry Leaders Pessimistic for 2004 Season

Greece’s tourism professionals are not in the least optimistic about the future of the country’s main currency-earning industry thus crushing earlier hopes that 2004, being the country’s Olympic year, would provide the much-needed shot in the arm to the sector.

The country’s hotel sector says that hopes for strong demand because of the Games just has not materialized, at least for the moment. Hoteliers say Greece’s main tourism markets -Britain, Germany, Scandinavia- have failed to book at anywhere near the pace initially expected. They believe major markets are holding back waiting to latch onto last -minute bookings at much better prices as they find Greece too expensive (not the packages themselves but the extra costs once a tourist leaves the hotel).

As well, the Panhellenic Hoteliers’ Association says the tourism sector is not moving ahead at the pace it should because institutional measures are not being adopted and chronic problems remain unsolved. The association says that policy must move in two directions, based on strategy and specific targets, and that a specific timetable has to be set for tapping new foreign markets and further developing existing ones. It notes that last year’s development incentives law effectively neglected tourism enterprises and that the new government after March 7 must revive investment priorities in the sector.

And like most other tourism professions, the hotel sector agrees that prospects this year are not good, despite the Olympics. The hotel association adds that although the private sector continues to invest, public infrastructure continues to lag behind in terms of roads, ports and regional airports. It notes that the financial results of most tourist enterprises have been declining in recent years due to the gradual loss in competitiveness, which increases their vulnerability.

The effort to promote Greece abroad is a further problem, according to association, as it is ineffective, untimely and piecemeal. The association says it must give way to aggressive and specialized public relations efforts, with a view to at least four years ahead. “It is unprecedented for an Olympic city to have an 11.5 percent drop in hotel capacity utilization the year before the Games,” says the association.

The Association of Greek Tourist Enterprises expresses the same basic view. It says we are at the beginning of this crucial Olympic year, and expectations had been cultivated that it would lead to a recovery after three years of stagnation. “However, indications to date point to anything but such a development, and prospects do not seem favorable,” says the tourism enterprises association.

The main reason for the downbeat forecast, according to this association, is that the sector continues to suffer from a lack of planning and chronic and structural problems that are dealt with by piecemeal measures, which erodes its competitiveness.

Added to the above are the recent events (land scandals) that have rendered inhospitable the investment climate in the industry. In an environment where illicit vested interests remain prominent, as a result of bureaucracy and the lack of a clear institutional framework, healthy entrepreneurial initiatives are crushed, the association claims.

The association asks how is a young businessman supposed to venture into tourism when he would at any moment be in danger of losing everything as collateral damage in the war between political parties? And how can this same businessperson attempt to convince foreign investors to bring their money to a country unable to guarantee a stable investment environment?

The Thessaloniki Association of Hoteliers reports that business was down 5 percent in 2003 and that the impact of the Olympic Games on the city will be minimal. It says it sees is no sign of a recovery in the city’s tourism sector. As well, it says the picture with resort hotels is not at all good as bookings from Germany and the UK, the two main sources of visitors, are showing a significant lag. The association believes this is largely due to the country’s failure in recent years to link promotion abroad with the Olympic Games.

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