Greek tourism faces summer drought

By Kerin Hope in Athens

The Greek tourist industry faces a grim summer, with bookings down by 25 to 30 per cent as recessions deepen in Germany and the UK, Greece’s main tourist markets.

Dozens of four-star and five-star hotels in Crete, Rhodes and Corfu, the most popular islands, decided against opening for Easter, the traditional start of the season, in an attempt to keep down costs.

“Many hotels will stay closed in April and May and hope to break even over the peak months,” said Nikos Angelopoulos, president of SETE, an industry group.

Hoteliers also face constraints because banks are cutting lending to the tourist industry, in spite of a €28bn ($37bn, £25bn) government support package aimed at sustaining small and medium-sized businesses, said Mr Angelopoulos.

The €35bn tourism industry is Greece’s biggest employer, but more than 50,000 jobs could be at risk if hotels shut down during the “shoulder” seasons in spring and autumn.

Greek hoteliers are offering foreign tour operators discounts averaging 15 to 25 per cent amid intensifying competition from cheaper destinations such as Turkey and Croatia.

British-based tour operators TUI Travel and Thomas Cook both recently reported strong growth in bookings for Turkey.

The recession has hit all sectors of the Greek market, with yachting, cruise and alternative tourism operators seeing a drop of 20 per cent in bookings and a steady flow of cancellations.

Tourist arrivals were flat last year at 17m after three years of growth, according to Aris Ikkos, managing partner of GBR Consulting. German and UK visitors accounted for almost 30 per cent of total arrivals.

“The number of UK visitors this year will be affected by the decline of the pound against the euro, and more Germans are expected to choose holidays at home,” said Mr Ikkos.

Athens, the main Greek winter destination, saw a significant drop in first-quarter arrivals because of last December’s riots, say hoteliers, although no official figures have been issued. The worst-hit region is the southern island of Crete, which normally caters for 3.5 to 4m tourists, mostly from the UK, Germany and Scandinavia. Local hoteliers’ associations said bookings had fallen by 30 per cent.

Hotels are offering discounts of as much as 40 per cent to secure high-season bookings, said Nikos Korakas, president of the hotel association of west Crete.

“Visitors are cutting the length of a holiday and it’s clear from the last few days that they’re spending less,” Mr Korakas said.

Industry lobby groups are pressing the government to follow the example of Cyprus and cut value-added tax by 3 percentage points for hotels and restaurants.