NAPLES TOURISM SECTOR HARD HIT

UNCLAS NAPLES 000097 SIPDIS E.O. 12958: N/A TAGS: ECON IT SUBJECT: NAPLES TOURISM SECTOR HARD HIT ¶1. The tourism industry in the city of Naples and the surrounding area has been hard hit in 2008, according to official figures and ConGen contacts. Data compiled by the Provincial Tourism Board show a 13 percent drop in the total number of visitors in 2008, and a decline of 18 percent in the number of foreign visitors, compared to 2007. Our contacts in the hotel sector estimate a drop of 25 percent in both the number of total tourists and the number of American tourists. The number of Italian tourists visiting the region has also fallen. The area's big tourist magnets have all seen major declines in visitors: Pompeii (-19 percent),Capri (-8 percent) and Sorrento (-14 percent). Hotel occupancy rates in the city of Naples have averaged only 42 percent in 2008. The Tourism Board estimated at the end of October that the Naples area had 170,000 fewer visitors than last year. ¶2. A combination of factors is responsible for the steep decline. In December 2007 and again in March 2008, the waste disposal problem hit crisis levels, and images of Naples buried under two-meter high piles of garbage caused massive cancellations by tourist operators and individuals alike (in fact, tourism was down by 40 percent in April over the previous year). An unfavorable exchange rate apparently discouraged many potential visitors from outside the euro zone, including Americans, and the global financial crisis has also clearly been a factor. The results of a survey published in October by the national business association Confesercenti showed that 60 percent of potential French visitors surveyed and 56 percent of Germans shunned Naples because of concerns about crime (Naples has more thefts than Rome and Milan combined). Other surveys have indicated that a reputation for poor service and lack of foreign language expertise also contribute to a negative image of Naples as a tourist destination. ¶3. The larger and more upscale hotels in Naples have fared somewhat better than the rest, since much of their business depends on conferences and conventions that are scheduled months in advance. The number of cruise ships stopping in Naples likewise has not fallen, and indeed is scheduled to rise over the next several years. However, since those arriving on cruises generally just make a one-day excursion, they contribute little to the local economy (and zero to the hotel sector). Most in fact see little of Naples at all; they are either bused to Pompeii or travel by boat to Capri. ¶4. Comment: The huge decline in tourism is a major blow to an economically depressed region. None of our contacts knows what percentage of the local economy depends directly or indirectly on tourism, but one estimate -- conservative, we believe -- is ten percent. Under current world economic conditions, the outlook is not good for the tourism sector here, even with the rising value of the dollar. Notwithstanding a positive article in the New York Times travel section in May, the city's image has not overcome the garbage crisis. Efforts by local officials to promote Naples after the crisis have utterly failed; they seem to believe that they need only address the negative perception of the city rather than underlying problems, such as the crime and chaotic traffic that contributed to that perception in the first place. TRUHN