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Sector officials agree that the drop in arrivals figures will be in the range of 10 to 30 percent

Greece: Crisis ripples through Greece’s tourism

Estimated drop in arrivals between 10 and 30 percent; officials hope for last-minute improvement to figures Greek tourism is bracing for possibly its worst season in nearly 20 years as the global crisis blows headwinds into one of the country’s most vital  sectors. Slowing global growth and the strong euro are forcing people to rethink this year’s holiday plans as labor markets deteriorate and a trip to a Greek resort becomes more expensive for residents from non-eurozone countries, such as Britain.

Tourism, which accounts for about 18 percent of the economy, has been experiencing solid growth rates, particularly since the country hosted the Athens 2004 Olympic Games. One in five people are employed in the sector which was responsible for an inflow of 11.3 billion euros into the country in 2007 when 17 million foreigners visited. The government has refrained from making any predictions for 2009, citing an unclear outlook due to the crisis, but sector officials seem to agree that the drop in arrivals figures will be in the range of 10 to 30 percent.

“Tourism is a very big question mark,” Economy and Finance Minister Yiannis Papathanassiou told foreign correspondents earlier this week. A sharp drop in the 2008 global growth rate and the tipping of many economies into a recession indicate that a large drop in arrivals is on the cards this year, possibly the biggest since 1991, according to a recent report prepared by Eurobank.

The majority of tourists visiting Greece every year are from Britain and Germany, both of which have been hit hard by the crisis. Industry sources are expecting 20 percent fewer British visitors, as they have seen their buying power weaken in the eurozone. In March last year, the pound bought 1.29 euros, whereas now it is worth 1.05 euros.

“In Britain they are also more sensitive to issues such as street violence and terrorism than other European countries,” said a senior economist at a leading Athens-based bank. Weeks of civil unrest in Athens and other major cities across Greece in December and the re-emergence of local terrorism groups have added to the country’s tourism woes. The expected drop in arrivals from Germany, home of Greece?s biggest spending tourists from the eurozone, is seen at around 15 to 20 percent, according to hoteliers.

Greek hotel owners who took part the world’s largest tourism gathering in Berlin last week, the ITB exhibition, promised tour operators cheaper prices. Experts, however, have warned about the traps of a price war, stressing that Greece needs to continue differentiating its product against cheaper neighboring competitors.

On the other hand, visitors from Italy and Scandinavian countries are seen being more steady in 2009. The downturn in tourism is not expected to have the same effect across Greece’s tourism map. In difficult economic times, parts of Crete and some Aegean islands manage to weather the storm better than other holiday spots, such as Athens. Expectations for this summer are dominated by goals of holding onto existing market shares and limiting the fallout from the downturn, but some officials add that the landscape could change quickly closer to summer.

“This year we will see last-minute bookings peak,” George Drakopoulos, director general of SETE, the Association of Greek Tourism Enterprises, told Athens Plus. The negative outlook has already harmed labor conditions in the sector, which consists of 900,000 employees, out of the country’s 4.5-million work force. Senior SETE officials said earlier this week that job cuts are inevitable as they called for measures from the state to subsidize job positions.

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