Greek tourism bracing for weak summer season

ATHENS – Revenues from tourism, the biggest earner for Greece’s embattled economy, will drop again this year after a 10 percent fall in 2009, a hotel industry body said on Tuesday.

Tourism accounts for 18 percent of Greece’s 240-billion-euro ($324 billion) economy and foreign demand could prove key to hauling the country out of its debt crisis given tax hikes and huge cuts in government spending will sap domestic consumption.

“We will certainly see a drop in revenues,” said Yiannis Economou, a board member of the Hellenic Chamber of Hotels, which represents some 10,000 hotels and camp sites.

“It’s because of the lack of competitiveness and the global crisis but the main reason is the negative publicity Greece has suffered due to its fiscal situation and the strikes in Athens,” he told Reuters on the sidelines of a press conference.

Revenues from foreign tourists fell by 10 percent in 2009 to 10.4 billion euros, pushed down by recession in Europe and the United States, a strong euro, competition from cheaper nearby destinations and social unrest in Greece.

The Greek capital, which makes nearly 14 percent of the sector’s revenues and was hit hard by 2008 riots sparked by the police killing of a teenager, is not expected to recover in 2010.

“We see revenues falling again this year,” Yiannis Retsos, president of the Athens Hoteliers Association said of prospects for hotels in the Greek capital. “The optimistic scenario is an 8 percent drop, but we are not optimistic.”

Wildcat strikes and marches through the streets of Athens have become almost daily events in recent weeks as the government grapples with a 300 billion euro debt pile.

Greece, a country of 2,500 islands, draws about 15 million tourists every year and tourism accounts for one in five jobs but arrivals dropped about 8 percent last year.

Despite a gradual recovery in the global economy, Greek hoteliers believe maintaining visitor numbers at 2009 levels will come at a cost.

“2009 was a very tough year … 2010 according to incoming data will be at the same levels in terms of arrivals, excluding Athens which will see a drop,” said Yiorgos Tsakiris, head of the Hellenic Chamber of Hotels.

“We will need to sacrifice some revenues to maintain the numbers (of arrivals).”