Hotel room occupancy dropped by about 20 percent in the Athens region in the first quarter of 2009, pointing to a bad year and job losses for a sector key to Greece's economy, the Attica Hotel Association said on Tuesday.

Tourism accounts for nearly a fifth of Greece's GDP and employs one in five of its workforce, making how it fares crucial as the economy is slowing sharply and may face recession this year. "We are not optimistic at all, we believe the trend will be similar for the rest of the year," Yiannis Retsos, secretary general of the Attica Hotel Association told Reuters.

Revenue per room fell 23 percent with average room rates in the first quarter down 4 percent, the association's chairman George Tsakiris said in a statement. "If this trend in tourism traffic is maintained until the end of the year, between 11,000 and 15,000 jobs will be lost (in the tourism sector) in Attica and there will be an income loss of 500 million euros," Tsakiris said.

"Such a drop will create significant problems in the viability and prospect of tourism businesses in Attica," he said, adding this would affect the Greek economy as a whole.

The Greek economy is expected to shrink in 2009 and 2010 after 15 consecutive years of growth, the IMF said last week, partly because of falling tourist arrivals.

The global financial crisis was expected to hit city breaks to urban destinations like the Greek capital more than other holiday destinations, Tsakiris said. Ιnternational media carried extensive coverage of riots that shook the Greek capital in December, after the police killing of a teenager.

With a high euro, Greece also has to compete with cheaper neighbouring destinations like Turkey.

Greece's weather, sun-drenched islands and archaeological sites usually attract about 15 million visitors each year.

The head of the Hellenic Hotels Federation estimated last week that bookings had fallen between 10 and 20 percent for the country overall during Easter, the start of the tourist season.  Retsos said May and June were the most important months for the Athens region and that hotels were trying to attract more tourists with aggressive pricing policies on the Internet.