…
Athens News recently carried an article regarding the meeting on the 21st October between the low-cost airlines, the Tourism Deputy Minister George Nikitiades, regional authorities and tourism industry officials. At the meeting, Ryanair announced its intention to increase arrivals into Greece by 1.5 million per annum. Nikitiades, Athens News reports, called everyone present at the meeting to co-operate more closely, offering reassurances that the Government will support this effort. Andreas Andreadis, President of the Panhellenic Federation of Hoteliers, who was also present at the meeting, also welcomed the initiative of the minister.
Contrast the above meeting with that held in the UK, during the World Travel Market in early November, where Nikitiades invited a selection of those involved in tourism to Greece from the UK to a sandwich lunch on top of a very noisy GNTO stand in the middle of the market. You could not hear yourself talk, let alone indulge in a serious conversation. Last time he was in London he held a similar meeting opposite a very noisy bouzouki band at the Greek Beach on the Thames.
This Deputy Minister, of course, believes he can solve Greece’s tourism problems simply by encouraging low-cost (really they are no-frills) carriers to fly into Greece. How can you have a serious conversation with someone when you cannot hear what he says because of the noise and who is reluctant to listen to those who have considerably more experience in tourism than he has? What ministers have to understand, and especially ministers in Greece, is that they are only there for a few months or a year and that in that time they have a duty to consult with those who are experienced in the workings of the industry and who will be there long after they (the ministers) have disappeared.
When challenged at the WTM meeting about the support he was giving to the no-frills carriers, he immediately replied that central Government was giving no help or encouragement but that any marketing aid to enable these airlines to fly into particular destinations was coming from the regional authorities and hoteliers of the region. I wonder if Mr Nikitiades has ever mentioned to these regional authorities and hoteliers that they should perhaps offer the same support to those tour operators that have put these regions on the tourism map over many years without ever being offered any marketing help to do so? I doubt it very much. I don’t think he really understands how tourism works.
It was interesting that Mr Andreadis conceded, at the same noisy, WTM meeting, that it was perhaps unfair that tour operators, who had helped create destinations, were not receiving the same marketing help as the low cost airlines. Perhaps he should have a word with the Deputy Minister for Tourism and also with the regional authorities and his fellow hoteliers. In fact, he correctly stated that there should be no subsidies at all. Perhaps he should stress this to Mr Nikidiades…
I also seem to remember that Nikitiades, or was it Andreadis, stated that they did not encourage no-frills carriers to fly from airports already well served by incumbent tour operators and airlines when the incumbents received no marketing help and the newly- encouraged no-frills carriers did. So, I wonder how they agreed to let easyJet fly from Gatwick to Chanea and Zakinthos from London Gatwick in 2010, when there was already ample capacity to these destinations from this airport? EasyJet, of course, received marketing help. It is very easy to begin to fly into a destination when the hard work has already been done by others who have risked considerable sums of money and have received no help at all from either the Greek state, the local authorities or hoteliers.
So, let’s look at all this in detail. I have been involved in tourism to Greece since 1975 and my company, Sunvil Holidays, which also includes the trading names Greek Islands Club, Sunvil Sailing and Hidden Greece has been sending in the region of 20,000 quality clients to Greece every year since the late 70s. That’s a lot of visitors! In that time we have received in the region of €5,000 total in marketing help. Very generous, don’t you agree? Oh, we have had plenty of promises and submitted plenty of proposals but that’s as far as it has ever got. I remember that once we agreed to extend the season because we were offered an incentive per seat to do so by the Greek Government but, even though we had this in writing, the offer was subsequently withdrawn because it was considered to be against European Union rules. In the meantime, we had put on extra charter capacity when we really did not want to and lost a lot of money in the process. So, over the 35 or so years, we have actually received a negative subsidy for our efforts to promote tourism to Greece! I wonder if Ryanair or easyJet would accept such treatment?
I have lost count of how many UK Greek Tourism Directors I have helped over the years in their efforts to promote Greece. You could say it was mutual help but it has tended to be rather one-sided.
What we tour operators want is a level playing field. Why are the no-frills carriers receiving marketing help to enable them to fly to Greece and her islands when we do not? I am sure that Ryanair received money from the Volos region in order to commence flying there but, when Sunvil, the first company to put in a direct flight to that airport from the UK many years ago, asked for some marketing help, we were told no funds were available. Getting a reply from the region was an effort in itself.
Sunvil was also the first company to fly a charter into Chanea in 1986 but, in 2010, when we asked if we too could have a marketing subsidy because we understood that easyJet was receiving one, we were very rudely told we could not have one, both by ungrateful hoteliers and the local mayor who in fact denied that easyJet received any help at all. In fact the mayor, and I am afraid I have forgotten his name, was very upset that I had even taken the time to contact him about the matter. He wondered who I was. I wonder if he is informed enough to even to bother to find out how much money my company has brought to his region.
Now, do no-frills carriers from the UK bring additional tourists to established tourism destinations? Read the previous sentence carefully, especially if you are Mr Nikitiades, because the devil is in the detail when it comes to tourism. Let’s look at other countries and how they have fared. The Algarve region of Portugal is 30% down this year. However, a considerable number of no-frills carriers fly into Faro from a variety of UK airports. Why is the region down? The Algarve has experienced a drop in tourism because, as no-frills carriers have put on capacity, so have traditional tour operators withdrawn it. Hoteliers are complaining, yet it was hoteliers in this region who thought that these carriers would bring them large numbers of clients and replace the “evil” tour operators that put them under pressure to give very low net rates. What hoteliers do not understand is that traditional tour operators, who feature hotels and apartments in their brochures, directionally sell these properties because, unless they do so, then their charter aircraft will remain empty. There is no money in selling flight seats only and all airlines know this. It is the sale of the package that brings the tour operator, the airline and the hotelier the margin that they need in order to remain profitable.
Algarve hoteliers are also complaining that their MICE (meeting and incentives) traffic has declined because traditional legacy scheduled carriers no longer fly to the Algarve. MICE traffic needs to block-book seats on aircraft and it is not easy to do so on Ryanair and easyJet.
Let’s take more examples across Europe. Spanish hoteliers in the traditional resorts have the same complaints. Where they thought that the no-frills carriers would bring additional business, they have found that their occupancies and margins have both declined. As no-frills carriers have increased flight frequencies, so have traditional charter-based tour operators reduced theirs and hotel beds have therefore remained empty; the no-frills carriers service villa owners and not hotels.
Visitors to Cyprus from the UK have been declining since the late 1990s yet there are far more no-frills carriers from the UK flying into both Paphos and Larnaca. It has been Government policy to help these carriers with marketing support yet all that has happened is that tour operators have reduced capacity as no-frills carriers have put it on, so that numbers from the UK have actually declined. The difference between the Cypriot Authorities and those in Greece is that the Cypriots acknowledge that tour operators, large and small, have a part to play in promoting tourism and therefore give marketing support across the board.
Let’s look at two recent examples in Greece. EasyJet has been helped by the local municipalities and hoteliers in Zakynthos and Chanea to fly into the islands from Gatwick, a route already well served for many years by tour operators who created tourism to both these islands. Let’s leave aside the fact that, if these authorities had any sense, they would encourage and support traffic from new airports rather than from those that have traditionally served the destination. However, we are not dealing with people who know anything about how tourism works but who, unfortunately, believe they do and take the final decisions. Ask the hoteliers if they have seen an increase in their occupancy as a result of the arrival of easyJet and the answer is a resounding “no”. All that has happened is that as these new flights have gone in capacity from Gatwick has been cut by others who traditionally served the destination.
And what will happen in 2011? Well, Preveza is thinking of inviting in a no-frills from the UK but several incoming agents have already said that there is no reason to pay for another airline to fly in when Monarch has thousands of seats to sell and they have never had a subsidy. Cephalonia has already said it is not interested. There may be others who believe that they will be saved by inviting in the no-frills.
So, who benefits from these no-frills flights if hoteliers do not? The answer is that it is property developers, villa owners and their friends, relatives and private clients who fill these aircraft. These villa owners rent their properties, which they have purchased as investments or future retirement homes, privately via the internet. They represent a threat to hoteliers and to all those who feature properties through official channels. How much of the money paid via the internet to these owners actually ends up in Greece? I am afraid very little, as monies are paid abroad and mostly to foreign owners of property in Greece. These owners do not pay VAT, they provide absolutely no financial security for their clients and they do not have adequate public liability insurance. Overall they bring a net drain to the Greek economy.
When will the tourism authorities in Greece understand how tourism from the UK works and when will they be prepared to listen to advice from those professionals who have never received a penny in order to promote one of the most beautiful countries in the world and who have the best interests of Greece at heart? There is much that needs to be done in Greece before we try to increase the number of arrivals. Let’s sort out the ferries, the infrastructure, the environmental and sustainability issues first. It is the solution to these issues that will protect Greek tourism long term. None of us need monetary incentives in order to serve an established tourism destination, least of all Ryanair and easyJet, two of the largest and most profitable airlines in Europe. They’ve been given enough incentives already.
* Noel Josephides is CEO/Owner of Sunvil
Board Director of ABTA, (Association of British Travel Agents )
Board director of AITO (Association of Independent Tour Operators)
Chairman of AITO Trust which arranges financial protection for tour operators
Chairman of The Travel Foundation, the UK travel industry’s sustainability charity undertaking projects al over the world and with an annual budget of £1.5 million
Chairman of AGTA – Greek Cypriot Travel agents and tour operators
Deputy chairman of ATOP, Association of Tour Operators to Portugal
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
