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Victoria Mindova

One of the many victims of the deepening financial and political crisis is Greek tourism, which plays a crucial role in the economy of the Mediterranean country. Reports of permanent unrest, clashes between discontented citizens and police, burned banks and closed companies are leaving a bitter taste in outside observers. Political instability and speculation about whether Greece will return to the drachma have caused the situation to disintegrate further and travel agencies have recorded an outflow of tourists from traditional "Greek" markets. Here is how Nicholas Kelaiditis from the Hellenic Association of Travel and Tourist Agencies commented on the developments exclusively for GRReporter.

Do you expect a decline in tourist flows for the 2012 season?

The decline could be 10%, 15% or 20% compared to last year and it is not good. As you see, this drop is posing serious problems to travel agencies. The biggest problem, however, remains market liquidity. Banks have stopped financing real business. As a result, we cannot make new investments because our savings are not huge. At the same time, the reputation and status of the companies are no longer important mainly because there is uncertainty. Speculations that Greece will exit the euro area are false and disastrous for the local business.

Political games are being played behind the scenes and our business partners want to see how things will develop. Until six months ago, we had excellent relations with our Italian counterpart, to which I could pay my obligations with delay because of the good business relations we had established through the years. Now, this practice can no longer apply. All our partners want to be prepaid for their services and not two or three days before the departure of the group but at least two weeks before that.

What measures can the real business take to neutralize the uncertainty resulting from the political system in Greece?

A week before the re-election, representatives of tourism met with members of the two major political parties (New Democracy and SYRIZA). It became clear from the discussions that political representatives agree that there should be support for tourism as well as that the image of Greece should change. The perception that the country is disintegrating should change because it is not. We have problems, but things are not yet catastrophic. If we continue at this rate and with that image, they will indeed become disastrous. Therefore, business is struggling to improve the image of the country abroad. What is shown in major media is not the real life in Greece. After improving the face of the country, we should boost tourism. This sector can immediately bring money to the country. We from the tourism business are not saying that heavy industry should not be developed or that no investments should be made in the production of fuels. These projects should be developed in parallel but let us not forget that the results will come in the long term, whereas tourism can immediately contribute to the recovery of GDP.

This conclusion is important for each party that will be in power today or tomorrow. We should not be divided into Bolsheviks and capitalists. It is important that people survive. The country needs funds to save social security funds. Causal relationships are very important here. If Greece has a bad image as a country, travel agencies have to promote a bad product. As you can see, travel agencies are like small embassies in the country. We are currently trying to sell a product (Greece) with a bad image, which may not correspond to reality, but we cannot convince the rest of the world and we rely solely on its past and natural beauty. It does not help our work; to the contrary it creates obstacles for us. Consequently, fewer tourists will visit Greece, which will inevitably lead to redundancies and bankruptcies. This, in turn, will reduce the revenue of social insurance funds and the end result will be a deepening crisis and unemployment.

What do you think the new government should immediately do to stop the negative trend in tourism?

The first thing is to adjust ​​VAT. Currently, different tourist services have three different VAT rates. It should be decreased to the lowest tax rate of 6.5%, mainly to improve the competitiveness of the Greek tourist product. Such an action may not result in a lower price for the end customer but it will greatly help to improve the climate of local tourism and will improve the offers to external travel agencies who will pay less for the services they receive.

Foreign travel agencies know that Greece itself is sold as a tourist destination. We are an attractive market and there is constant interest in us. When the prices of the packages become more attractive, travel agencies will again give priority to Greece in the packages they offer. This is a matter of advertising too.

If we were to consider the issue in a more general framework, I would say that Greece finally has to establish a stable and efficient tax system. I do not know what it would be and I would not oppose it even if the state deducted 30% -35% from the total income – it is enough to make sure that the tax system is stable and unchanging, so that I can make my long-term action plan.

How has the profile of tourists visiting Greece in the last two years changed?