Competitiveness of Greek Tourism Product Continues to Decline

George Drakopoulos, the Association of Greek Tourist Enterprises’ general manager, outlines the results of the association’s recent study on competitiveness.

Greece continues to lose ground as a preferred tourism destination. In 2004, Greece placed 16th as a tourism destination choice worldwide, a drop from 13th in 2002, according to the findings of a recent study titled, “The Challenge of Competitiveness and Redefining Greek Tourism Product Placement,” which was carried out by the Association of Greek Tourist Enterprises.

Reasons cited for the decline in competitiveness of the Greek tourism product included a stagnant number of international flight arrivals, the persistent seasonality of demand with about half of the annual tourist arrivals limited to July through September, and the pronounced concentration of tourism destinations (Crete, Dodekanissos, and mainland Greece).

The study compared Greece with five of its competitors in the Mediterranean (Cyprus, Turkey, Egypt, Croatia, Portugal and Spain), and drew data from 18 tourism destinations in both cities and resort areas.

Points of comparison for the study were the number of top quality hotels, the length of the tourism season, the cost of employees in the sector, and costs of selected products available for purchase.

Greece rated lowest in the number of high quality hotels and it experienced the most pronounced seasonality. The monthly cost for employees in Greece, Spain and Cyprus were comparable while the cost in Turkey was about half. The prices in Greece for the selected products (soft drinks, beer, espresso, water, hamburger, film, museum and site entrance fees) were the highest on average.

Tourist Daily Expenditures

The graph on page 7 illustrates the average daily amount spent by tourists at each destination. Mr. Drakopoulos pointed out that while only 73 euros per day were spent in Athens, cities such as Istanbul and Dubrovnik experienced considerably higher spending of 200 euros and 164 euros, respectively.

He explained that this was clearly an issue of value for money rather than price sensitivity as tourists generally tend to spend more when they believe they are getting better value for money.

In light of these facts, he said, Greece cannot compete in the tourism market as far as cost is concerned, but instead must strive to diversify its tourism products to provide a richer tourism experience.

Today’s tourism market is more competitive than ever, he added, and sustainability and profitability are increasingly complex issues. “Greece faces different competitors for each market and product. To succeed, every product in the Greek tourism portfolio will require a different marketing strategy to target the particular geographic market being competed for.”

The table on page 6 illustrates Greece’s market share in 2004 as a destination from European countries for various types of travel ranging from sun and beach holidays to conference tourism.

Finally, the study stressed that the Greek government must revise its current position on tourism because 90% of the plans made have not been implemented, and that the more powerful ministries must work more closely with the ministry of tourism.

The study concluded by saying that Greece has only three choices: to be proactive and plan the future of tourism using modern marketing tools; to simply copy competitors after the fact; or be left behind wondering what happened.

Greece’s Market Share, 2004 (percentages and numbers of trips in thousands)