March 19, 2015
Taking a really short break from the developments in Greece and Eurozone, I hereby present my paper published by the International Centre for Black Sea Studies (ICBSS) in the aftermath of the successful organization of the 7th International Black Sea Symposium on “Perspectives on Tourism in the Black Sea Area” that was held on 16-18 October 2014, in Athens, Greece. Considering that tourism holds a large share on national GDP, and that millions of tourists visit Greece each year mainly between April and October, it is important to acknowledge the output of this sector in the national economy, but also to point out some of the major weaknesses, opportunities, threats, and recommendations (SWOT Analysis) in order to capitalize the effect of tourism in growth, development, education, and employment in Greece.
Despite the persistent economic crisis and slowdown, Greece has achieved to increase the number of tourists having visited the country since 2010. In 2014 the number of visitors went beyond expectations, with over 17 million choosing Greece as their destination for vacation. Tourism is considered one of the most robust sectors of economic production in the country, a fact that has helped national economy grow since the 1960s. During the last 50 years, Greece has attracted millions of visitors. The natural beauty of the country along with the appealing climate conditions and the history of the country are the major factors for someone to visit Greece. Nonetheless, the massive waves of visitors has not been capitalized effectively so far.
The Pertinent Weaknesses
In comparison to its main competitors in the Mediterranean Basin (i.e. Turkey, Italy, France, Spain), Greece is facing a deteriorating competitive position with limited access in attracting visitors from emerging markets (e.g. China; Russia, Brazil, India) as well visitors that spend more than the average visitor. Therefore, while the country has a unique and literally unseen beauty, commercial and brand strategy in rather unsuccessful. The major drawbacks of this strategy can be found in a number of sectors, from real estate planning, infrastructure, and investment planning to high cost of services, and concern every part of the market chain.
In this respect, the Greek tourism market has several restrictions that prevent the diversification of holiday patterns in growing market segments, such as vacation homes, cruise embarkation ports, marinas, and integrated resorts. In addition, the cumbersome bureaucracy along with the volatile and unstable fiscal system and the growing tax evasion trends discourage investments and distort the trust of investors and visitors over the local market. Furthermore, the average flight cost both within the European Union (EU) and from outbound destinations is uncompetitively high. There are only few exemptions regarding low-cost air carriers, such as Ryanair, but such companies, while being successful and sharing a considerable part of the market pool, cannot cater medium-to-high spenders, that seek for exclusive services.
The Dazzling Opportunities
The major advantage for Greece is that the country has the potential to develop high-end services in year basis, and not only in seasonal basis, and yet with minimum coordinated endeavors. Greece has beautiful landscapes and can provide diversified options in almost every corner of the country. From winter skiing tourism in the northern parts of the country, autumn tourism in the beautiful landscapes of Thessaly, Epirus, and Thrace, to summer tourism in the islands and the Peloponnese region. In addition to that, the most populated urban centres such as capital Athens, Thessaloniki, Volos, Patras, and Herakleion Crete, provide unlimited options and can cater different demands, from cultural events, to nightlife, a variety of exceptional culinary options, short excursions in the adjacent areas. Moreover, the physical landscape and diversification of the Greek land can ostensibly attract investments, maintaining and unveiling an added-value, especially when comparing to other surfeited or unstable markets and regions (i.e. Southern Italy, Minor Asia’s coastal area, Egypt).
Large-scale investments could generate new job opportunities in many sectors, from construction to services, administration, tech-driven positions, travel agencies, therefore reinvigorating local economies and increase the direct and indirect impact and share on national GDP and growth.
The Insidious Threats
There are the internal – domestic threats that can seriously damage the image of the country, the poor branding, and the weakened marketing strategies. Political decision-making can affect the broader strategy, mainly in terms of culture and media diplomacy, the amounts spent for targeted advertising, the positioning of the country in emerging markets with great potential, the bilateral relations with a given country. During the last decades, the Greek central policy on tourism was not well-organized, whereas there have been rumors for improper management of the available funds for advertising abroad. Similarly, the tensions between the political leadership and the relevant labor unions and associations in the past have many times caused paralysis in the entire chain of market, the travel agencies, the port agencies and the visitors.
Another domestic threat lies on the economic conditions and the labor market of the country. Given the sky-rocketed unemployment and the thirst for seasonal occupations, the job market in tourism has considerably thrived along with grey economy. In addition to that, there is also an increasing capacity gap of the workforce, as a growing number of labor lacks sufficient education and relevant skills.
Coming now to the external threats, the year 2014 has been amounted with regional turbulences, especially in the Eastern Mediterranean. The negative shifts with regards to the Cyprus problem, the interventionist behavior of Turkey in the exclusive economic zone of Cyprus, the vast waves of Syrian refugees, the imminent threat of the Islamic State, the growing tensions between EU and Russia, the ongoing unrest in North Africa.
Greece is situated in a geographical position where all issues mentioned affect the broader sense of stability, and possibly impede the perception of the country, and of the area, as a safe place for vacation, and in the long run, can discourage investments in tourism. Especially the crisis with Russia in reference to Ukraine is a hot debated issue in the EU, and to a considerable extent, the Greek government cannot do a lot as it is bound to the wider EU policy.
Greece can do much more both in terms of improving the domestic market and advancing its influence towards strengthening its place and that of the wider Black Sea Region as a sustainable destination for tourists and visitors.
In the domestic field, Greece has to redefine its commercial strategy and achieve greater penetration to both EU and emerging markets. The “sun and beach” campaign project has to be intensified and coupled with the quality upgrade of diversification options in order to attract higher-income segments of the visitors. In this respect, taxation should be lowered and the process simplified, bringing in more targeted and high-scale investments in infrastructure, integrated resorts, nautical tourism, and the cruise sector that could be further developed with the liberalization of the market.
Greece needs to improve transportation access and promote better connectivity with emerging and long-haul markets, while investing more in capabilities and know-how through the establishment of a tourism university degree that would be adjusted to the current technical expertise.
In terms of regional synergies, Greece has to strengthen bilateral partnership with Turkey and step into a new era of cooperation. The connection of both markets and the sharing of the benefits should be put forth, a fact that would inevitably solidify cooperation in the field of foreign policy and the bilateral issues. In a broader perspective, Greece should take the initiative to connect the domestic market and services with adjacent countries that show a great potential in the area of tourism, such as Russia and Azerbaijan. Sharing of knowledge, common campaigning, and facilitation of connectivity should be the priorities for the Greek leadership. In this respect, all parties involved should acknowledge the growing competition in the field of tourism and establish a common strategy that would increase the quality of services and the number of high-income segments of visitors from around the world.
The cultural assets of the Black Sea Region and the traditional ties between the states of the region should be further nourished under a common intra-national body or within the Organization of the Black Sea Economic Cooperation (BSEC) that would put ahead a concrete strategic plan with the participation of specialized communication and policy-making agencies from all the countries concerned. In this respect, sector tourism can be ignited, targeting the youth, students, entrepreneurs, and simple visitors that want to travel and explore the region. Information and campaigning is vital and it will certainly bring up effective outcomes.
To contact the author Dimitris Rapidis: