May 19, 2010 / 10:42 AM / 9 years ago

Crisis-hit Greece struggles to attract tourists

ATHENS (Reuters) - Hotel receptionist Maria Kanelopoulou has been busy crossing names out of an already rather empty reservations book since labor protests turned violent this month, ending with the death of three.

Tourists walk past the Parthenon on Acropolis hill in Athens, May 18, 2010. REUTERS/Pascal Rossignol

“I am worried. In Greece the only thing we have is tourism, the sea, the weather,” Kanelopoulou, 45, said in the empty reception hall of 18-room Nefeli hotel in the Plaka tourist district. “People who destroy don’t understand this.”

Some 27,000 nights were canceled in Athens hotels after the May 5 march, threatening a resource that is essential to helping Greece out of a severe debt crisis. Greece depends on tourism for nearly a fifth of its 240-billion euro ($296 billion) economy, and one in five people work in the industry.

But even with the attraction of its thousands of islands and clear blue waters, all made cheaper by a falling euro, Greece has become a hard sell, as potential visitors are put off by the frequent unpredictable strikes and images of violent clashes at anti-austerity marches.

Travel websites are filled with questions from worried travelers wondering whether to change or cancel their bookings.

“Since we are bringing our children with us, I am seriously rethinking our plans,” said one post on “I do not want to have to worry about my kids, or if there will be disruptions.”

Euro zone member Greece plunged into its crisis after it revealed in October its deficit would be more than twice previous forecasts, sending shockwaves through markets worldwide and threatening the euro.

The newly elected government was forced to announce austerity steps including public pay cuts and tax hikes which in turned sparked almost daily union marches and several strikes.

Another general strike has been called for May 20 and more are planned for June.

The tourism industry had hoped to benefit from the weaker euro to stabilize revenues after a 10 percent drop in 2009, but now sees a further 7-9 percent fall this year.

If the summer season is as bad as forecast, this will further sour the mood afterward, when Greeks find themselves with less money to make it through the winter. Most people working in tourism depend on their summer income to last the whole year.


Thomas Cook has seen a 30 percent reduction in sales out of Germany and about 24 percent from Britain in the past three to four weeks, Thomas Cook CEO Manny Fontenla-Novoa said last week. The two countries together make up about a third of Greece’s 15 million tourists per year.

“There’s a lot of injury coming out of Greece with the riots,” he said.

An emergency committee set up by the government after the wave of cancellations has prepared promotional DVDs with speeches by officials, including the prime minister.

“Tourism is in a critical condition,” government spokesman George Petalotis told reporters last week. “We are trying to reverse this climate, we are trying in every way we can to send the message that Greece is a safe country.”

Tour operators say Greece needs to further slash prices to win back visitors tempted by cheaper destinations such as Turkey.

“We’re going to have to go to Greek hoteliers to stimulate demand ... and that means (action on) price,” Fontenla-Novoa said.

Greek hoteliers already slashed prices in 2009 and many have announced further cuts of 15-20 percent in places such as Rhodes this year, also turning non-refundable bookings into refundable ones to try to attract clients or adding a free night.

Hoteliers are nevertheless more pessimistic than the overall tourism industry and forecast on Tuesday a 15 percent drop of their revenues, as they cut prices on last minute offers.

“We see 2,000 to 3,000 cancellations a day since the riots started,” said Alexandros Vassilikos, chair of the Attica Hotels Chamber.

Efforts to boost the summer season might be side-tracked by the sacking of the tourism minister on Monday. Prime Minister George Papandreou sacked her after revelations her husband owed the government more than 5 million euros in tax.

Much will depend on last-minute bookings and on whether social tensions ease as the summer approaches. Tourism representatives say it is essential to ensure the May 20 strike passes peacefully and flights are not grounded by walkouts.

Slideshow (2 Images)

One rare piece of good news was that air traffic controllers decided not to join that strike.

Another is that bookings from Russia and France are going well, officials say. Russians and other East Europeans have favored northern Greece over the past years.

“The Greeks are hot-headed but we need cooler tempers,” said Andreas Andreadis, head of the Hellenic Hotel Federation and Vice President of Greece’s Tourism Enterprises.

Additional reporting by Matt Scuffham in London, Angelika Gruber and Eva Kuehnen in Frankfurt, Angeliki Koutantou and Harry Papachristou in Athens; Editing by Sonya Hepinstall

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