Identifier
Created
Classification
Origin
05ATHENS2441
2005-09-16 10:18:00
UNCLASSIFIED
Embassy Athens
Cable title:  

GREEK TOURISM IMPROVES AFTER 2004 OLYMPICS,

Tags:  ECON EAIR EWWT EFIN GR TOURISM 
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UNCLAS SECTION 01 OF 02 ATHENS 002441 

SIPDIS

E.O. 12356: N/A
TAGS: ECON EAIR EWWT EFIN GR TOURISM
SUBJECT: GREEK TOURISM IMPROVES AFTER 2004 OLYMPICS,
BUT OFFICIALS EXPRESS CONCERN ABOUT FUTURE

UNCLAS SECTION 01 OF 02 ATHENS 002441

SIPDIS

E.O. 12356: N/A
TAGS: ECON EAIR EWWT EFIN GR TOURISM
SUBJECT: GREEK TOURISM IMPROVES AFTER 2004 OLYMPICS,
BUT OFFICIALS EXPRESS CONCERN ABOUT FUTURE


1. (U) Summary. Tourism in Greece is up in 2005, one
year after the country played host to the Olympics.
Tourist arrivals are projected to reach 14 million by
the end of the year, marking a 10 percent increase
over 2004, but receipts from tourism are projected to
increase only 5 percent over last year's 9.6 billion
euros (5.85 percent of GDP). Representatives of the
tourist industry are concerned, however, that the
increase wasn't larger and stress that better
marketing, infrastructure improvement and quality
controls of services offered are the keys to higher
numbers both in arrivals and receipts in the future.
End summary.


2. (U) Following the well-received 2004 Summer
Olympics, tourism in Greece appears to be on the rise
after four consecutive years of stagnation. By year-
end, tourist arrivals are expected to reach 14
million, increase of 10 percent. However, tourist
receipts are expected to increase by only 5 percent
in 2005 due to a decrease in the average time spent in
the country and a 13.8 percent drop (in constant
prices) in per capita spending. This marginal
increase in tourist revenue is the critical issue for
Greece, whose large current account deficit is largely
offset by receipts from shipping and tourism and net
inflows from the EU.


3. (U) Representatives of the tourist industry are
encouraged by the tourism rebound this year but are
only guardedly optimistic about the future. General
Director of the Association of Greek Tourist Agencies
George Dracopoulos observed that the 2004 Olympics
were the largest contributor to the increase in
tourism but also noted that the terrorist attacks in
Turkey and Egypt helped divert some tourists from
those countries to Greece. The government's
advertisement campaign (for the first time launched in
a timely and organized fashion) also helped, but not
as much as the Greek press or the Ministry of Tourism
have claimed. Tourist industry officials stressed the
need for the GoG to continue the advertisement
campaign in a continuous and consistent fashion for
several years, in order for it to have its maximum
effect.


4. (U) Dracopoulos underlined that while 2005 has been

a good year so far, it is the anomaly in a decade of
decline, and that the problems, which have contributed
to Greece's declining share of tourism, still remain.
Improved infrastructure, better marketing, and an
extension of the tourist season, are all issues
needing to be addressed. Also, the quality of the
tourist services provided (hotels, resorts, car
rentals, restaurants, etc.) needs to be improved
substantially. Spyros Ginis, President of the Greek
Union of Air Travel Agencies, agreed on the need for
both the private and public sectors to improve
Greece's infrastructure, but also noted that the GoG
needed to exercise consistent quality control over
existing hotels, restaurants, taxis and bars. (Note:
One recent quality control inspection of 43
restaurants and bars in Athens discovered that 100
percent of rum and tequila, and 50 percent of scotch
and whiskey had been adulterated, generally with wood
alcohol.) Both individuals were highly critical of
the GoG's new development law, even though it contains
a chapter on tourism, arguing that it should have laid
even greater emphasis on the sector, which contributes
up to 18 percent of GDP and provides jobs for 800,000
people.


5. (U) Comment. Over the last few weeks the Greek
press has been exclaiming over Greece's "resurging"
tourism in 2005. Experts in the industry, however,
are much more restrained. There is no doubt that the
GoG's early-and-often advertising campaign ("Live your
Myth in Greece") and the legacy from the Athens 2004
Olympics helped this year's overall increase.
Industry officials also applauded the establishment of
a Ministry solely responsible for tourist matters.
However, Greece faces systemic problems that will
continue to plague the industry. Greek productivity
is only 90 percent of the EU average, and inflation
has run twice the EU average for the last several
years, making Greece an increasingly expensive
destination. Also, Greece's tourist infrastructure,
outside of improvements made for last year's Olympics,
was largely put in place during the 60's and early
70's, and often does not reflect the tastes or
interests of today's more affluent tourist. Many
Greek island hotels lack enclosed showers or bathtubs,
for instance, and roads to major archeological sites
are often poorly marked and/or maintained.


6. Finally, as noted by both tourist officials, a
10 percent increase in tourist arrivals and only 5
percent in receipts, while better than the
alternative, does not favorably compare to the much
higher increases noted by other Olympic cities in
the year after their Games; Spain, often cited as
an example for Greece, received a 30 percent
increase in tourists in its post-Olympic year.
Also, benefits from the Olympics generally manifest
the following year, which means that Greece has
most likely enjoyed whatever bounce it was likely
to get. If Greece is going to return to its halcyon
tourist years of the 70s and 80s, it is going to
take more than a catchy slogan. Tourist policy
should focus on new investments and diversification
designed to target special tourist interests, such
as eco-tourism, spa and sea-therapy centers, or
golfing. This could turn Greece into a year-round
destination and attract high-income tourists. End
Comment.

RIES