Andreas Andreadis enjoys juggling with figures: the president of the Association of Greek Tourism Enterprises (SETE) believes the sector could contribute more than 500 billion euros to the Greek gross domestic product (GDP) and create 220,000 new jobs by 2020.

According to a current study by management consultants McKinsey's, the number of foreign visitors and revenue in the sector rose by ten percent last year. On the other hand, the number of Greek tourists dropped by 20 percent because many Greeks feel hotels in their own country are too pricey and have cancelled holidays due to the recession. 

Andreadis, who has worked in the industry for decades, is convinced tourism could become the motor of the Greek economy - if the state creates the right framework to allow it to flourish.

"First of all, we need a more favorable tax system. How can VAT for a dinner in Greece be 23 percent if it's only 8 percent in Spain and 5 percent in Cyprus,“  SETE's president said. He criticizes the Greek government for dragging their heels on important reforms.

Andreadis points out that investors in the tourist trade need clear guidelines on legal issues and a more flexible labor market in the service sector.

State support

Simply lowering labor costs, however, won't give Greece a competitive edge over other tourist nations like Bulgaria or Turkey.

SETE believes hotel owners in Greece must ensure good value for money - which is something visitors to Greece often complain about, especially during peak season. They can't understand why a double room on the island of Paros is more expensive than comparable accommodation in Italy's Tuscany. Tuscany has a year-round high season, Andreadis explains, while Paros only has two months. "The hotel owner on Paros has all of two months to cover his costs," he said. "Of course, that can't work out." 

The government could cut subsidies and offer tax reductions for businesses instead, Andreadis said - that would boost competitiveness.

Year-round tourism

A group of hotel owners from Crete recently presented a study with detailed concepts on how to promote year-round tourism. Giorgos Pelekanakis, the report's co-author and manager of a hotel complex in Aghios Nikolaos, said Crete, with its mild climate, could easily offer winter tourism.

"But the concept can only work if everyone pitches in," he said. "The businesses would have to agree to stay open during the winter months - in return, the state could offer more favourable taxes and lower social security premiums."

"It's important that shop and cafe owners stay open even after high season is over," Pelekanakis said.

Inspiration

In times of crisis, people often appeal to the state for help. On the island of Rhodes, a group of hotel owners have decided to take matters into their own hands. One of them is Giorgos Matsigos. The manager of a luxury hotel on Rhodes has for years discreetly travelled to other countries in his quest for new markets.

"When we heard there were tensions between Turkey and Israel, we got in touch with travel agents in Israel - as a result, many more Israeli tourists came to Rhodes," Matsigos said.

Last summer, the island saw a record number of Russian tourists. The Turks are next on Matsigos's list. The Rhodes hotel owners are preparing to present their island at an international tourism fair in Istanbul.

Author: Jannis Papadimitriou / db
Editor: Joanna Impey