Greece: Tourism hit hard

Greece's post-Olympic tourism surge looks as though it is coming to an end as rising inflation curbs foreign travellers' spending power and a stronger euro makes competing destinations, such as Turkey, cheaper to visit.

"Things look restrained this year," said George Drakopoulos, director-general of the Association of Greek Tourism Enterprises, in an interview with the Athens News.

The industry will sigh with relief if Greece manages to draw about 15 million visitors this year, as many as in 2007, according to Drakopoulos. "Our target is to reach the previous year's level. We definitely won't exceed that," he said.

That would be the first fall in tourist numbers since the 2004 Athens Olympics. Greece had spent about 10 billion euros on Games-related preparations to polish the country's image and earn more from tourism, its second-biggest money spinner after shipping.

The investment initially paid off. In 2005, tourist arrival numbers to Greece stopped sliding for the first time since 2001, climbing 10 percent to 13.3 million. In 2006, they reached a record 14.5 million, and in 2007 they climbed yet another 5.5 percent, according to initial estimates by the Institute of Tourism Research and Forecasts (ITEP), the industry's Athens-based research organisation.

Athens is among the first to feel the pinch. "Whatever invigoration Athens got from the Olympics is waning and threatens to become a distant, glorious past," the Greek capital's hotel association AHA said last month.

Arrivals from the US to Athens are expected to drop by 30 percent this year, while weaker bookings from other major markets such as the UK and Germany may cause overall arrivals to drop by 6 percent, according to the association. "It's a difficult year," AHA chairman George Tsakiris said.

One-off factors, such as the European football championship in Austria and Switzerland, make matters worse. "You saw a crowd of 25,000 Swedes watching the football match against Greece - all those people could have been in Rhodes instead," Drakopoulos said.

Tour operators sound more optimistic. "Bookings will most likely level off at last year's numbers, which isn't bad at all," said Anja Braun, spokeswoman for hotels and resorts in Hanover, Germany-based TUI, Europe's biggest holiday operator. "It's true, high fuel prices are a concern and travelling by car has become much more expensive, but we haven't seen anybody who would abstain from travelling. Greece remains among the five most popular tourist destinations. Bookings can't just cave in."

Robert Schumacher, a tourist from Wisconsin, in the US, proves the point. "The exchange rate is crippling, but we've been planning the trip for months now and it's always been my dream to go and see Olympia," he said as he was renting a car in Athens to visit the birthplace of the Olympic Games.

Rough estimates of current tourist arrivals, based on figures by the Civil Aviation Authority, show a moderate, annual increase of as much as 3 percent in the first five months of 2008. Yet, even if diehard Greece fans like Schumacher help the country post yet another record number of tourist arrivals this year, receipts are set to fall as visitors spend less money.

"What we do expect is a decline in tourism receipts, not arrivals," said ITEP's head of research, Vassilis Patsouratis. "Tourists may decide to stay for a week rather than two. If they spent, say, 100 euros a day last year, they may spend 90 euros this time."

Americans and Britons, who see their purchasing power plummet in Europe, don't face the same problem in Turkey, whose currency, the lira, is in the same doldrums as the US dollar and the pound. Tourist arrivals in Turkey increased by about 18.5 percent last year, compared to Greece's 5.5 percent, according to ITEP.

"Turkey continues to develop well," Braun said. "It offers good value for money. European Union nations find