US embassy cable - 05ATHENS2441

UNCLAS SECTION 01 OF 02 ATHENS 002441 
 
SIPDIS 
 
E.O. 12356: N/A 
TAGS: ECON, EAIR, EWWT, EFIN, GR, TOURISM 
SUBJECT: GREEK TOURISM IMPROVES AFTER 2004 OLYMPICS, 
BUT OFFICIALS EXPRESS CONCERN ABOUT FUTURE 
 
1. (U) Summary.  Tourism in Greece is up in 2005, one 
year after the country played host to the Olympics. 
Tourist arrivals are projected to reach 14 million by 
the end of the year, marking a 10 percent increase 
over 2004, but receipts from tourism are projected to 
increase only 5 percent over last year's 9.6 billion 
euros (5.85 percent of GDP).  Representatives of the 
tourist industry are concerned, however, that the 
increase wasn't larger and stress that better 
marketing, infrastructure improvement and quality 
controls of services offered are the keys to higher 
numbers both in arrivals and receipts in the future. 
End summary. 
 
2. (U) Following the well-received 2004 Summer 
Olympics, tourism in Greece appears to be on the rise 
after four consecutive years of stagnation.  By year- 
end, tourist arrivals are expected to reach 14 
million, increase of 10 percent.  However, tourist 
receipts are  expected to increase by only 5 percent 
in 2005 due to a decrease in the average time spent in 
the country and a 13.8 percent drop (in constant 
prices) in per capita spending.  This marginal 
increase in tourist revenue is the critical issue for 
Greece, whose large current account deficit is largely 
offset by receipts from shipping and tourism and net 
inflows from the EU. 
 
3. (U) Representatives of the tourist industry are 
encouraged by the tourism rebound this year but are 
only guardedly optimistic about the future.  General 
Director of the Association of Greek Tourist Agencies 
George Dracopoulos observed that the 2004 Olympics 
were the largest contributor to the increase in 
tourism but also noted that the terrorist attacks in 
Turkey and Egypt helped divert some tourists from 
those countries to Greece.  The government's 
advertisement campaign (for the first time launched in 
a timely and organized fashion) also helped, but not 
as much as the Greek press or the Ministry of Tourism 
have claimed.  Tourist industry officials stressed the 
need for the GoG to continue the advertisement 
campaign in a continuous and consistent fashion for 
several years, in order for it to have its maximum 
effect. 
 
4. (U) Dracopoulos underlined that while 2005 has been 
a good year so far, it is the anomaly in a decade of 
decline, and that the problems, which have contributed 
to Greece's declining share of tourism, still remain. 
Improved infrastructure, better marketing, and an 
extension of the tourist season, are all issues 
needing to be addressed.  Also, the quality of the 
tourist services provided (hotels, resorts, car 
rentals, restaurants, etc.) needs to be improved 
substantially.  Spyros Ginis, President of the Greek 
Union of Air Travel Agencies, agreed on the need for 
both the private and public sectors to improve 
Greece's infrastructure, but also noted that the GoG 
needed to exercise consistent quality control over 
existing hotels, restaurants, taxis and bars. (Note: 
One recent quality control inspection of 43 
restaurants and bars in Athens discovered that 100 
percent of rum and tequila, and 50 percent of scotch 
and whiskey had been adulterated, generally with wood 
alcohol.)  Both individuals were highly critical of 
the GoG's new development law, even though it contains 
a chapter on tourism, arguing that it should have laid 
even greater emphasis on the sector, which contributes 
up to 18 percent of GDP and provides jobs for 800,000 
people. 
 
5. (U) Comment.  Over the last few weeks the Greek 
press has been exclaiming over Greece's "resurging" 
tourism in 2005.  Experts in the industry, however, 
are much more restrained.  There is no doubt that the 
GoG's early-and-often advertising campaign ("Live your 
Myth in Greece") and the legacy from the Athens 2004 
Olympics helped this year's overall increase. 
Industry officials also applauded the establishment of 
a Ministry solely responsible for tourist matters. 
However, Greece faces systemic problems that will 
continue to plague the industry.  Greek productivity 
is only 90 percent of the EU average, and inflation 
has run twice the EU average for the last several 
years, making Greece an increasingly expensive 
destination.  Also, Greece's tourist infrastructure, 
outside of improvements made for last year's Olympics, 
was largely put in place during the 60's and early 
70's, and often does not reflect the tastes or 
interests of today's more affluent tourist.  Many 
Greek island hotels lack enclosed showers or bathtubs, 
for instance, and roads to major archeological sites 
are often poorly marked and/or maintained. 
 
6.  Finally, as noted by both tourist officials, a 
10 percent increase in tourist arrivals and only 5 
percent in receipts, while better than the 
alternative, does not favorably compare to the much 
higher increases noted by other Olympic cities in 
the year after their Games; Spain, often cited as 
an example for Greece, received a 30 percent 
increase in tourists in its post-Olympic year. 
Also, benefits from the Olympics generally manifest 
the following year, which means that Greece has 
most likely enjoyed whatever bounce it was likely 
to get. If Greece is going to return to its halcyon 
tourist years of the 70s and 80s, it is going to 
take more than a catchy slogan.  Tourist policy 
should focus on new investments and diversification 
designed to target special tourist interests, such 
as eco-tourism, spa and sea-therapy centers, or 
golfing.   This could turn Greece into a year-round 
destination and attract high-income tourists. End 
Comment. 
 
RIES