GREEK TOURISM:RECESSION AND SECURITY THREATEN, BUT

UNCLAS ATHENS 000326

SIPDIS

E.O. 12958: N/A
TAGS: PREL ECON EFIN ETRD GR
SUBJECT: GREEK TOURISM:RECESSION AND SECURITY THREATEN, BUT
GOG HAS BIG PLANS


1. (SBU) SUMMARY: During a call by Ambassador February 23,
new Minister of Tourism Constantinos Markopoulos expressed
high hopes for U.S.-Greek relations with the new
Administration, acknowledged that Greece's tourism sector
faces difficult challenges in 2009 due to the drastic fall
off in bookings which started even before the financial
crisis erupted in 2008, and laid out a number of measures his
Ministry is planning to promote Greece as a tourist
destination. These measures include lowering taxes and fees,
building partnerships with European air carriers, and seeking
to host high visibility events such as international yacht
races and Hollywood film productions. Markopoulos plans to
visit Washington in mid-April "after the PM's visit" on a six
city tour. Ambassador noted that all Markopoulis' plans
could come to naught if the GOG does not get a handle on
deteriorating public security. End Summary.


2. (SBU) Ambassador called on newly installed Minister of
Tourism Constantinos Markopoulos February 23 to see what
plans the GOG had to overcome the serious downturn Greece's
tourism sector is experiencing because of the global
recession. Markopoulos acknowledged that Greece's tourist
sector is facing a severe downturn, which started in 2008.
(Note: the problems of the tourism sector, which represents
15 percent of Greek GDP, have been prominently reported in
the Greek press, with some stories reporting that bookings
from key European markets are off up to 30 percent compared
with 2007. End note.) Markopoulos welcomed the opportunity
to take on this tough challenge. The Tourism Ministry, he
said, "is like a second Foreign Ministry." He said he was
eager to work with the U.S. government and to rebuild
Greece's reputation as a major destination for U.S. visitors.
Ambassador noted that to overcome the slump created by
international economic circumstances Greece would need to
address a number of obstacles, including a lack of resort
facilities, golf courses, etc., which are proposed but too
often stymied by local opposition. Markopoulos agreed that
Greece had not developed its full tourism potential, and
said, "we have a plan to address these things."


3. (SBU) Markopoulos explained that, in order to reduce the
cost of travel to Greece, he is proposing that the GOG reduce
in phases the tax rate for rooms and miscellaneous fees for
landing at small airports and ports. (Note: these measures -
particularly the room tax - are an important source of
revenues for municipalities, and Athens Mayor Keklamanis has
threatened to resign if the room tax is reduced. End note.)
The GOG, he said, is also planning a promotional campaign in
cooperation with European air carriers and major tour
operators.


4. (SBU) In response to Ambassador's question, Markopoulos
acknowledged that arrivals were off nearly 15 percent in
2008, with arrivals from the U.S. off over 20 percent. He
said the GOG needs to develop a U.S.-specific campaign in
order to rebuild this market, but his goal for 2009 is simply
to maintain arrivals at current levels. For the longer term,
he had big plans to enhance Greece's image as a tourism
destination. These include a plan to reach out to Hollywood,
while working in Greece to reduce bureaucratic obstacles, to
encourage major film production in Greece. This would be in
the tradition of the 1960s, when Melina Mercoury helped raise
interest in travel to Greece. Markopoulos was also in
discussions that very day with the organizers of the Louis
Vuitton Cup yacht race to host it in the Aegean, perhaps as
early as spring 2010. Furthermore, Markopoulos hoped to enter
into discussions with the organizers of the America's Cup,
with an eye to Greece hosting it in late 2010 or 2011.


5. (SBU) Markopoulos hoped to present his plans to U.S.
interlocutors during a six-city tour which he was planning
for mid-April, "after Prime Minister Karamanlis' visit." He
would launch the trip in Washington DC, with a speech at the
Woodrow Wilson Center. Ambassador welcomed Markopoulos'
ambitious plans and offered Embassy support for his trip
planning. Ambassador cautioned, however, that it is
difficult to see how Greece will attract visitors with press
reports of riots and car bombs. All of these plans would be
put at risk, he said, if a bomb the size of the car bomb that
failed to detonate in front of the CityBank branch office in
late February were to go off.

SPECKHARD