Greek tourism faces tough ’08 on strong Euro, slow growth


ATHENS – Greece’s tourism industry faces a tough 2008 as the strong euro and a slowdown in the global economy threatens to curtail the number of tourist arrivals this year, the head of an industry group said Thursday.

“Greek tourism is today facing an uncertain year,” Stavros Andreadis, president of the Association of Greek Tourist Enterprises, or the SETE, said at a news conference. “External factors, which have already had a negative effect on the competitiveness of our product, have further deteriorated.”

“The signs of a deep recession in the world economy, the extent and duration of which are unforeseeable, have created a climate of uncertainty and insecurity,” he added. “The euro/dollar exchange rate has reached 1.52 today, up from an already high 1.32 in December 2006, automatically making European tourism more expensive.”

With its sunny beaches and picturesque Aegean Islands, Greece is among the top 20 tourist destinations in the world – attracting more than 16 million tourists last year who spent some EUR15 billion. Tourism accounts for roughly 18% of the country’s gross domestic product and roughly one in five jobs.

Since the staging of the 2004 Athens Olympic Games, Greece has registered three years of successive growth in tourist arrivals and tourist spending, thanks in part to the success of the Olympic games.

Without giving details, Andreadis hinted that tourist arrivals may actually fall this year.

“If the level (of tourist arrivals) are the same as last year, I would call it a successful year,” he said. “Because after three years of increases, a fourth year increase can’t necessarily be expected.”

To be sure, the strength of the euro against the dollar will have an indirect – rather than a direct impact – on Greek tourism. Greek tourism depends heavily on fellow Europeans – more than 80% come from within the European Union and 65% from other euro-zone economies. The number of U.S. tourists is, by contrast, fairly small.

However, according to Andreadis the strength of the euro may encourage Europeans to seek out cheaper holiday destinations in dollar-linked economies rather than within the euro zone.

“The problem isn’t that these external factors will lead American and other long-haul visitors not to prefer us (as a destination). Those tourists are fairly low in number and less sensitive to price,” he said.

“The problem is that many residents of the euro zone, from which we draw the overwhelming majority of our clientele, will turn to dollar-linked destinations or generally to destinations outside the euro zone,” he added.