Europeans bank on tourism for economic recovery
DUBAI, UAE - When the global financial crisis hit Europe in 2008, one of the first things that Christian Lagarde, then French finance minister, did was to bring Atout France, the country's tourism promotion body, under the Ministry of Finance.
This reflected an important economic reality: tourism brings in hard foreign currency that helps the domestic economy and employment.
The industry makes up 6.5 per cent of France's gross domestic product and supports two million employees.
"Tourism is crucial for an economy. It helps infrastructure, hotels, retail sector and development," said Karim Mekachera, director of Atout France's Middle East and Turkey operations. "Everything is linked."
France received 81 million visitors in 2008, but the arrivals dropped to 74 million in 2009. Last year, however, the country attracted 79 million tourists.
France received 891,000 visitors from the Middle East, mostly from the GCC countries led by the UAE, Saudi Arabia and Kuwait.
Similarly, Greece is boosting its tourism industry to support the economy, which is reeling from the sovereign debt crisis. However, tourism is considered an industry that could help save jobs and support the economy.
‘Hit new records'
"Although economic challenges remain, our tourism industry is back on track," said George Koletsos, Secretary-General of the Greek National Tourism Organisation (GNTO). "Life is going back to normal after last year's debt crisis."
A recent report by the United Nations World Tourism Organisation (UNWTO) says international tourist arrivals grew 4.4 per cent in 2011 to 980 million, up from 939 million in 2010, in a year characterised by a stalled global economic recovery, major political changes in the Middle East and North Africa and natural disasters in Japan.
"International tourism hit new records in 2011 despite the challenging conditions," said UNWTO Secretary-General Taleb Rifai.
"For a sector directly responsible for five per cent of the world's GDP, six per cent of total exports and employing one out of every 12 people in advanced and emerging economies alike, these results are encouraging, coming as they do at a time in which we urgently need levers to stimulate growth and job creation," he added. In order to woo foreign tourists, the current Greek government has reduced the value added tax and airport taxes and has undertaken a number of measures.
GNTO itself has launched a strong marketing campaign through online, electronic and social media outlets.
"Due to the economic situation, hotels are able to offer better rates. We currently have a very competitive product to offer to our foreign visitors," Koletsos says.
However, in order to receive more visitors, visa restrictions must ease, both Atout France and GNTO realise.
"Since we are part of the Schenghen visa system, we can't really change things on our own," Koletsos says. "Meanwhile, we have given our views to the relevant authorities to ease visa formalities."
Although Atout France is also facing similar realities, Mekachera's objective is to attract more big spenders — the Arabs.
UNWTO statistics point to $20 billion (Dh73.4 billion) spending on outbound travel from the region including a majority from Saudi Arabia. The GCC countries represent around 60 per cent of the outbound travel market while Egypt has a 20 per cent share. The rest is from other countries of the region.
That probably explains why Hungary — a former socialist country which does not even have a national airline — is seeking investment and inbound traffic from the GCC, especially the UAE.
"We are desperately looking at more traffic from the region, especially the UAE. Because we do not have direct flights from the UAE, we are in talks with Emirates, Etihad and flydubai to start serving Budapest," said Timea Czunyi, international market development manager of Hungarian Tourism.
Although Hungary is not severely affected by the European debt crisis, the government sees it as an easy route to boost employment.
Similarly, Cyprus is also seeking ways to attract tourists from the GCC. Vassillis Theocharides, director of the Cyprus Tourism Organisation, said his country, which is not part of the Schenghen agreement, was now allowing any Schenghen visa holders direct entry.
"We have recenty relaxed the visa process. People from the UAE can get a visa in a single working day," he said.
"The number of visitors is expected to increase ten per cent this year."
By 2020, the most important growth from the region will come from Saudi Arabia, Egypt, the UAE, Kuwait and Lebanon.
France has been focusing on high net worth individuals from the region since the yield per visitor from a typical Middle East traveller is higher.
It is estimated that 50 per cent of Middle East visitors spend more than ¤5,000 a day and their average stay in France is 11 days — the longest compared to other global visitors.
Tourists from the Middle East represent only 2.5 per cent of France's ‘overnights' or guest nights (nights spent by a tourist in a hotel).
However, when it comes to guest nights in luxury and five-star hotels, Arabs represents 30 per cent, reflecting a trend of high-spending tourists from the Middle East.
"Although we are close to the peak 2008 level, in terms of international arrivals, we are currently targeting high spenders," Mekachera says.
"The point is to not only get only more tourism but better tourism."
To cater to Middle Eastern visitors, particularly Arabs from the GCC, France has introduced a new category in their hospitality segment — Palace — and it is found that 42 per cent of the occupants of these hotels are from Arab countries.
Despite persistent econ-omic uncertainty, tourists in Europe reached 503 million in 2011, more that half of the international arrivals globally.
"Despite the sovereign debt crisis, European markets did extremely well, I must say," Taleb Rifai told Gulf News at the Arabian Travel Market.
"This is partly because tourism is a very resilient industry. It is one of the first to be affected and also the first to recover from any crisis and we have seen that. That's why traffic is coming back globally."
"Although part of the growth in Southern Mediterranean Europe resulted from a shift in traffic away from the Middle East and North Africa, destinations in the Mediterranean also profited from improved outbound flows from markets such as Scandinavia, Germany and the Russian Federation," UNWTO said.
Although no one has any illusion about the fact that the tourism industry alone cannot help European countries to recover from the current financial crisis, it could help them heal the wounds — a sign that is already visible.
Best time to go: Explore Greece
Greek officials say cheap hotel rates offer an attractive proposition for those who love to explore ancient civilisation.
"This is the best time to visit our country as you instantly either benefit from 20 per cent low rate or 20 per cent value addition," George A Koletsos, Secretary-General of Greek National Tourism Organisation (GNTO).
Greece has 9,600 hotels housing 737,000 beds that last year had served 16.5 million tourists, up ten per cent on 2010 figures, and helped generate direct revenues of ¤10.5 billion (Dh50.7 billion). Tourism industry's direct and indirect contribution to Greek economy is about ¤36 billion.