National Bank Sees Tourism Arrival Increase

Tourists visiting Greece will increase by 7.5 percent in 2005, exceeding 13.5 million this year and 14 million in 2006, according to a National Bank of Greece (NBG) report released last month.

The main factors for the rebound include the tourism ministry’s strong advertising campaign and the impact of last year’s Olympic Games in Athens, which are expected to draw an additional 1.4 million tourists. This will balance out the reduced competitiveness of the local tourism product in terms of prices, said the bank report.

For the rise in Greek tourism to continue, the report stressed that overall prices must become more competitive. Last year’s decline in arrivals will push hotel prices lower, the NBG report suggested, so tourism revenues will rise less than arrivals. The tourism sector will also increase its effect on domestic economic activity from 0.5 percent last year to 0.9 percent in 2005. It accounts for 16 percent of gross domestic product and for 18 percent of total employment. Greece ranked 15th in the international arrivals chart in 2004, receiving 90 percent of its visitors from Europe.

A challenge for the country’s tourism sector is that Greece is now a “mature” destination with limited potential for further development. The report added that any margins for expansion are limited to seasonal growth, as 65 percent of tourists visit Greece in the summer months, compared with 45 percent to the other Mediterranean countries.