Greece: A New Mindset for Tourism
By James Ruggia
October 14, 2012 11:45 PM
A high-powered group representing the Greek government came to New York last week hoping to stimulate foreign investment in the country’s tourism. Led by Greece’s new tourism minister, Olga Kefalogianni, the group spoke of a new mindset that promises easier, less bureaucratic paths to investment and a fundamental change in Greek tourism.
Greece depends on tourism to create 8 percent of its GDP, employing 16 percent of all Greek workers, or about 800,000 people. Tourism was one of 15 industries addressed in a McKinsey & Co. report commissioned by the government in order to find a strategic way out of the Euro Zone crisis. Functioning as a blueprint for economic recovery, the report found that Greece needs to reform its "sun and beach" tourism by building the necessary infrastructure to develop cruise and nautical tourism. These reforms, the report estimates, could add 18 billion euros annually by 2021.
Since she took office, Kefalogianni has advocated a more upscale tourism product for Greece. “Integrated tourist resorts attract higher end tourists to their spas, conference centers, marinas and golf courses,” Kefalogianni says. “We now have the legislation to allocate different areas in Greece for these kinds of projects. Now investors know that in Rhodes, Crete or in the Peloponnese they can invest in these kinds of developments.” The new government has not only loosened up the red tape surrounding foreign investment, it also has created an agency to help guide investors more swiftly through the bureaucracy.
“We have relied too heavily on the sun and sand traveler,” says Kefalogianni. “These kinds of travelers are too confined seasonally. We need to extend our season. Other kinds of tourism give us a better chance to do that.” She also endorsed the development of medical tourism as a niche that could attract visitors in other times of the year besides the traditional peak season.
“Last year Greece had a record year in arrivals,” says Kefalogianni. “For 2012, despite the terrible start we had, it will still be a strong year.” In 2011, Greece attracted a record 16 million arrivals. This year was softer due mainly to perceptions of political instability arising from the broadly televised scenes of civil strife in Athens last June.
“The numbers for Athens have declined dramatically,” says Kefalogianni. “It’s not an accurate portrait of the city. Even a few blocks away from these scenes people were peacefully having dinner and enjoying the city.” Tourism to Athens is down about 15 percent as Europeans visiting Greece have increasingly bypassed the capital by flying directly to the islands. Outside of Athens, however, Greek tourism is strong.
Ten years ago Greece was attracting roughly 250,000 American travelers a year, a number that increased to a healthy 600,000, last year. This year that number, affected by the rioting, is likely to come in at around 500,000. Kefalogianni sees room for improvement. “The U.S. tourist is a better spender than most other tourists,” she says. “In the last two years there have been no advertising or media campaigns in the U.S. There’s been no research done on the U.S. market in a decade. We believe the Greek brand is still strong here, but the American tourist is very sensitive to security.”
Another member of the Greek delegation, Notis Mitarachi, deputy minister of development, says the new government views the image of Greece as something more comprehensive than an advertising campaign can address. “We are going to meet with the Nation Branding Index,” he says. “We’re searching for a longer, more comprehensive approach.” According to that index, which measure perceptions of countries as they are represented in the international media, Greece currently ranks 179 out of 200 countries.
Two weeks ago Delta suspended direct flights to Athens until spring. Thus this winter, there will be no direct U.S. connection to Athens. On this front Kefalogianni can only promise that there is some good news on the horizon, suggesting that another airline might pick up those routes, but she couldn’t name the carrier as of yet.
In December, a second Greek delegation will make its way to the U.S. on another bridge building mission, this time to the tour operators who will be in attendance at the U.S. Tour Operators Association (USTOA) Conference, Dec. 6 to 8, at the Hilton Waikoloa Village in Big Island, Hawaii. “We’re trying to restore our ties to the U.S. market and to the American industry,” says Kefalogianni. “This is only the first in a series of visits.”
James Ruggia is executive editor covering Europe and Pacific Asia for TravelPulse.com.