HOTELS. Performance of Greek Tourism and developments in the basic figures of the Greek Hotel Market

Transcription

1 HOTELS Performance of Greek Tourism and developments in the basic figures of the Greek Hotel Market

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3 2011 CONTRIBUTORS 1. Dr Kyriakos Emm. Rerres, Scientific Director of ITEP. 2. Dr Agni Christidou, Director Hellenic Chamber of Hotels 3. Dr Antonis Spinakis, General Manager QUANTOS S.A. 4. Sophia Panousi, Researcher. 5. Dionysia-Chrysavgi Aggelopoulou, Research Assistant. EDITING Dr Gerassimos Zacharatos Emeritus Professor of Tourism and Economic Management, University of Patras General Director of ITEP RESEARCH INSTITUTE FOR TOURISM (ITEP) 24, Stadiou Street Athens Tel , Fax

4 Contents Recent developments in the global tourism market Review of Prospects for Developments in competitor countries Overview of Greek tourism The evolution of Greek tourism figures during Purpose of visit to Greece Foreign arrivals by country of origin Travel expenditure and average length of stay Tourism seasonality in Greece Overnight stays of tourists in Greece Expenditure per visit and day of stay in Greece Competitiveness of Greek tourism Developments in the institutional environment of Greek tourism Νational collective agreement for payment terms of the employed in hotel enterprises all over the country Annual survey of ITEP for the hotel market Identification of research Changes of hotel capacity Risk of disinvestment in Greek tourism Greek hotels' revenues in Greek hotel occupancy rates in Prices of the Greek hotel product Performance of hotels hosting mostly foreign clients Employment Employment in Greek hotels Employment rate of women and foreign workers in Greek hotels Average employment per hotel unit Summary

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6 Recent developments in the global tourism market. Review of It is generally accepted today that tourism is a key factor for the economic development of a country. A strong tourism sector directly contributes to the national income of the country, combats unemployment and improves the balance of payments, while it is also substantial the indirect contribution to the economy through its multiplier effects. At the same time, tourism is perceived as the connecting link between the different countries, by contributing to the development of transnational exchanges, trade promotion and to the strengthening of world peace. Finally, the development of hard and soft infrastructure improves the overall competitiveness of countries. According to the World Tourism Organization data, in 2012 total cross-border movements for the first time surpassed the threshold of 1 billion arrivals, growing by 3.8% compared to The recovery of world tourism has been spectacular and beyond all expectations during the fourth quarter of On a monthly basis, the best performance in 2012 occurred in March (6%) and the lowest in July (1%). Despite the current economic instability, the increase is expected to continue in 2013 with a slightly lower rate (3-4%). Table 1 International Tourist Arrivals by Region REGIONS /09 11/10 12/11 (millions) (Share %) (% change) WORLD ,5 4,7 3,8 Developed Economies ,1 5,2 4,6 3,6 Emerging Economies ,9 8,0 4,8 4,1 Europe 389,4 447,0 487,6 517,5 534,8 51,7 3,0 6,1 3,3 EU ,1 358,1 372,0 390,9 400,1 38,7 2,6 5,1 2,3 North Europe 47,8 62,4 63,8 64,8 65,1 6,3 1,8 1,6 0,4 West Europe 139,7 141,7 154,3 161,0 165,8 16,0 3,9 4,3 3,0 Central & East Europe 69,3 90,4 95,9 105,3 113,7 11,0 3,4 9,8 8,0 South & Med. Europe 132,6 152,5 173,5 186,4 190,2 18,4 2,4 7,4 2,0 Asia & Pacific 110,1 153,6 205,1 218,1 232,9 22,5 13,2 6,4 6,8 Oceania 9,6 11,0 11,6 11,7 12,1 1,2 6,1 0,9 4,0 South Asia 6,1 8,1 12,0 13,4 14,0 1,4 19,5 12,0 4,4 America 128,2 133,3 150,3 156,3 162,1 15,7 6,4 4,0 3,7 North America 91,5 89,9 99,3 102,1 105,6 10,2 6,7 2,8 3,4 Caribbean 17,1 18,8 19,5 20,1 20,9 2,0 1,6 3,0 4,0 Africa 26,2 34,8 49,8 49,2 52,3 5,1 8,5-1,1 6,3 Middle East 24,1 36,3 59,2 55,3 52,6 5,1 13,5-6,7-4,9 Source: UNWTO, Tourism Barometer Vol. 11, January

7 At regional level, all regions of the world recorded an increase in international arrivals, with the exception of the Middle East. The areas with the best performance were Asia-Pacific and Africa (6.8% and 6.3% respectively), followed by the Americas (3.7%) and Europe (3.3%). The arrivals in the Middle East fell by 5%, due to political tensions that still plague many countries in the region. In Southern Europe there is an increase in arrivals by 2%, while in Greece arrivals fell by 6% compared to Chart1 International Tourist Arrivals 2012/2011 (%change) 8,0% 6,8% 6,0% 4,0% 2,0% 3,8% 2,0% 3,3% 0,0% -2,0% World Greece Medit. Europe Europe Asia-Pacific Middle East -4,0% -6,0% -5,5% -4,9% -8,0% Source: UNWTO, Tourism Barometer Vol.11, January Tourism receipts exceeded the psychological barrier of one trillion U.S. dollars in 2011, growing by 12.3% in comparison with % of all destinations reporting relative data have managed to increase their tourism receipts. Best performance was achieved by the countries of South-East Asia with an average increase of 21.6%. In European destinations the increase in tourism receipts ranged at higher levels than the average (13.5%), while in Greece the increase was more limited and amounted to 9.3%. It is worth noting that the positive progress of international tourist arrivals and receipts confirms the resilience of tourism activity in periods of prolonged economic uncertainty. With regard to tourism expenditure, China was once again by far the faster growing spender for trips abroad with annual growth of 42% compared to 2011, followed by Russia which increased its expenditure by 31%. In monetary terms, the U.S. market expanded by 7%, the UK by 5% and Germany by 3%. Instead, the markets of the countries of Southern Europe applying austerity programs shrank, in order to improve their fiscal imbalances. In France, travel expenditure fell by 7%, in Italy by 2%, in Spain by 4% and in Greece by 18.5%. 6 5

8 Table 2 Tourism Receipts by Region / /10 REGIONS (billions $) % change WORLD ,7 12,3 Europe 231,6 349,4 411,5 409,5 464,6-0,5 13,5 North Europe 36,1 53,6 58,6 61,7 69,8 5,3 13,1 West Europe 83,7 123,2 144,2 142,4 161,6-1,2 13,5 Central & East Europe 20,3 32,8 47,4 48,1 56,3 1,5 17,0 South & Med. Europe 91,5 139,7 161,3 157,4 176,9-2,4 12,4 Asia & Pacific 85,3 135,8 203,2 255,6 299,7 25,8 17,3 Oceania 14,3 25,9 33,6 38,5 41,7 14,6 8,3 South Asia 4,8 9,9 14,9 19,9 24,2 33,6 21,6 America 131,3 145,5 165,9 180,7 198,3 8,9 9,7 North America 102,0 107,7 119,2 131,2 144,7 10,1 10,3 Caribbean 17,2 20,9 22,4 22,8 23,5 1,8 3,1 Africa 10,3 22,0 28,6 30,5 32,7 6,6 7,2 Middle East 16,8 26,6 42,0 52,2 46,6 24,3-10,7 Source: UNWTO, Tourism Barometer Vol.11, January Chart 2 International Tourism Expenditure 2012/11 (change %) China 42,0% Russia 31,0% USA U. K. Germany 5,0% 3,0% 7,0% -2,0% -4,0% -7,0% Italy Spain France -18,5% Greece -30,0% -20,0% -10,0% 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% Source: UNWTO, Tourism Barometer Vol.11, January

9 Prospects for For 2013, the WTO estimates that the increase in international arrivals will range between 3 and 4%. Table 3 Expected Change in International Arrivals for 2013 World +3% to+4% Europe +2% to+3% Asia and Pacific +5% to+6% America +3% to+4% Africa +4% to+6% Middle East +0% to +5% Source: UNWTO, Tourism Barometer Vol.11, January For another year the Asia-Pacific region and the countries of sub-saharan Africa will be the leaders of the ongoing tourism activity development. Arrivals at those regions are expected to increase by 6%. The U.S. is expected to improve its performance by 3 to 4% and Europe will follow with lower rates. The course of the tourism market in the Middle East will depend largely on the political developments in the region. If the war continues in Syria and turmoil in countries like Egypt and Tunisia, tourism will suffer severely. Such a development would benefit the tourism industry of other Mediterranean destinations in southern European countries. Developments in competitor countries. As it has been mentioned earlier, destinations in the countries of South and South-East Europe, except for Greece, attracted a larger number of tourists in As it is shown in Table 4, all the main competing countries achieved growth in arrivals in In Croatia foreign arrivals grew by 5.1%, in Portugal by 5%, in Cyprus by 3% and in Turkey by 1.1%. In contrast, Greece recorded a 5.5% decrease. Table 4 Evolution of foreign tourism in Greece and the competitor countries % change Country Arrivals Tourism Receipts Period 2010/ / /11 Period 2010/ / /11 GREECE Jan.- Dec Jan.- Dec Italy Jan.- Dec Jan.- Dec Spain Jan.- Dec Jan.- Dec Portugal (1) Jan.- Dec Jan.- Dec Croatia (1) Jan.- Dec Jan.- Dec * Cyprus Jan.- Dec Jan.- Dec Turkey Jan.- Dec Jan.- Dec (1) It refers to foreign tourist overnights in hotels. * It refers to Jan.-Sept. Source: National Statistical Authorities and Central Banks of the countries. 8 7

10 In terms of tourism receipts, it stands out the positive performance of Portugal (5.7%).Italy has achieved a higher rate of increase in revenues compared to arrivals, suggesting that it managed to sell its product at better prices. While in Spain it seems that prices lagged slightly behind over Greece has received 4.6% less revenue in 2012 than the previous year. Chart 3 Key Tourism Figures 20012/2011 (Change %) Foreign Tourist Arrivals (%) Tourism Receipts (%) ,7 1,8 4,0 5,1 3,0 1, ,4 0,7 5,6 3,6 6,1 1, , ,6 (Note) Tourism Receipts of Croatia refer to 9 months of Source: National Statistical Authorities and Central Banks of the countries. 8 9

11 Overview of Greek tourism The evolution of Greek tourism figures during Inbound tourism in Greece decreased in 2012 by -5.5% compared to Greater was the reduction in the arrivals from the EU-27 countries (-8.5%), due largely to the decline of tourists from France (-15%) and Germany (-5.9%). Regarding other countries, arrivals from Russia grew by 18.4%, while arrivals from USA fell by 23%. Table 5 Foreign Tourist Arrivals at Selected Airports January-December Airports /09 11/10 12/11 Thessalonica* ,6 10,1 4,5 Kavala ,0-2,4-14,5 (N. Greece) ,6 9,2 3,4 Irakleio* ,0 12,3-2,7 Chania ,1 10,8 9,2 (Crete) ,8 12,0 0,1 Rhodes ,0 19,8-2,4 Kos ,1 22,2-5,7 (Dodecanese) ,0 20,6-3,5 Araxos ,3-4,1 73,9 Kalamata ,0-5,8 7,9 (Peloponnese) ,9-4,9 44,3 Corfu ,9 8,2 10,0 Kefalonia ,7 0,0 13,2 Zante ,4 6,7-5,4 Aktio ,5 0,0-1,0 (Ionian Islands) ,6 6,1 4,7 Mykonos ,0 17,7 6,8 Santorini ,7 10,6-0,2 (Cyclades) ,9 13,3 2,6 Skiathos ,8 5,8 4,3 Mytilene ,2 1,4-21,4 Chios ,9-17,5-15,6 Lemnos ,1 34,0 2,0 Samos ,3 8,5-8,5 (N. Aegean) ,2 5,5-6,4 TOTAL ,3 12,4 0,6 ATHENS ,6-4,2-14,6 GRAND TOTAL ,4 7,9-3,1 * Total Arrivals. Source: Civil Aviation Authority, Athens International Airport Eleftherios Venizelos, Regional Airports. According to data published by airports and by the Civil Aviation Authority (CAA), during 2012 arrivals by air of foreign tourists recorded a decrease of 3.1% compared to 2011, which 10 9

12 was considered a year of recovery for the Greek tourism market, evidencing an increase in air-transport arrivals by 8% (Table 5). Several regions of the country saw a rise in arrivals by air. The highest percentage increase was recorded in the airports of the Peloponnese (44.3%) and particularly in that of Araxos. However, in absolute terms, this increase corresponds to additional tourists, since the bulk of tourist flow arrives in Peloponnese by car or by boat via the Adriatic Sea. The winners of 2012 include destinations of Northern Greece due to increased traffic from the markets of Russia, Turkey and Middle East. Positive was also the outcome for destinations of the Ionian Islands because of the recovery of the UK market. Crete, though, recorded stagnation. Foreign arrivals by air fell (-3.5%) in the islands of South Aegean as well as in the other islands of the Archipelago (-6.4%) due to a significant slump in the German, Dutch and Swiss market. However, in regional airports there was a marginal increase in arrivals by 0.6%. The negative sign of arrivals throughout the country is mainly due to the Athens International Airport, where arrivals fell by 14.6%. Athens for another year experienced the negative consequences of the actual policy situation and the degradation of its historic center. The resulting political conflicts and the ongoing protest demonstrations turned the city center into a non friendly place for residents and tourists. The concerted efforts of the State during 2012 to restore accessibility to the city center have brought positive results, but still there are problems that must be addressed by all stakeholders in the government and the city. If the public and private partnership scheme for the recreation of the city center succeeds, Athens has all the natural and manmade resources that could make it the most attractive tourist destination in the Eastern Mediterranean. The less favorable course of arrivals did not leave untouched tourism receipts that fell by 4.6% in 2012, according to data from the Bank of Greece. The net receipts from travel services, albeit reduced, contributed 55.7% in total net receipts from abroad and thus they offset the 41.9% of the deficit of the trade account of the country. Purpose of visit to Greece Business travel to our country continued to decline during The second quarter of 2012 business travel fell by 19.2% compared to the same quarter of

13 Chart 4 Travel Receipts by Purpose of Visit 2010 & ,7% 4,9% 6,8% 7,8% 2,1% 6,0% 6,8% 4,7% 77,6% 80,4% Source: Bank of Greece. Table 6 Τravel Receipts by Purpose of Travel (million ) Period P e r s o n a l P u r p o s e s Leisure Studies Health Visit to family Other reasons Total Personal Purposes Business Purposes Total % Change regarding last year ,8 280,6 41,7 715,5 534, ,5 980, ,2-0, ,2 272,2 50,4 646,0 462, ,8 904, ,9 2, ,1 306,4 40,3 546,6 472, ,9 698, ,3-10, ,8 282,1 29,8 471,6 620, ,7 745, ,3-7, ,7 223,9 35,2 489,5 596, ,3 713, ,7 9,3 Ι 163,5 53,4 7,9 65,0 55,6 345,5 140,8 486,3 ΙΙ 2.123,6 96,6 10,3 126,4 122, ,0 193, ,5 ΙΙΙ 5.343,2 80,2 16,5 247,5 186, ,7 176, ,2 IV 705,8 76,1 5,5 107,7 108, ,7 187, ,3 % Change on the same quarter of last year Ι 135,7 53,2 7,7 71,1 60,9 328,5 148,1 476,6-2,0 ΙΙ 1.814,0 92,1 10,4 107,7 153, ,8 197, ,8-11,1 ΙΙΙ 4.811,7 67,5 5,1 205,8 314, ,3 247, ,5-6, IV 700,4 69,3 6,7 87,1 91,6 955,1 153, ,4-7,0 Ι 158,1 45,0 4,5 63,3 61,7 332,6 134,1 466,7-2,1 ΙΙ 2.091,0 74,5 7,2 110,2 151, ,9 187, ,1 10,4 ΙΙΙ 5.437,9 53,4 15,9 225,2 279, ,5 234, ,0 10, IV 759,7 51,0 7,6 90,8 104, ,5 157, ,0 5,6 Ι 115,5 37,2 6,7 74,3 58,4 292,1 115,3 407,3-12,7 ΙΙ 1.932,1 64,0 6,4 116,0 143, ,2 151, ,5-7,9 Source: Bank of Greece 12 11

14 Foreign arrivals by country of origin The arrivals from traditional markets of other EU countries continued to decline in 2012, recording a 8.5% decrease compared to The biggest losses were on the Polish market (-43.5%) which attracted 200,000 fewer tourists. There was also a significant drop in the French (-15%), Dutch (-14%), Swiss (-17.1%) and Finnish market (-8.1%). Table 7 Foreign Tourist Arrivals in Greece by country of origin COUNTRIES D% 2011/10 D% 2012/11 I. EUROPE ,4-5,4 EUROPEAN UNION ,9-8,5 France ,4-15,0 Germany ,9-5,9 U.K ,4 9,3 Spain ,3 0,6 Italy ,2-9,6 Netherlands ,2-14,7 Hungary ,1 0,0 Poland ,0-43,5 Portugal ,7-40,9 Romania ,3 3,0 Sweden ,8-4,2 Czech Rep ,8-6,5 Finland ,3-8,1 Switzerland ,7-17,1 Norway ,0 29,8 Russia ,8 18,4 IIΙ. ASIA ,5 4,4 Japan ,0-12,7 China ,3-23,0 Israel ,7-8,1 Turkey ,6 9,1 IV. AFRICA ,1-2,7 Egypt - Sudan ,6 1,0 South Africa ,0-10,4 II. AMERICA ,1-22,4 Brazil ,2-40,3 USA ,7-22,9 Canada ,5-27,8 V. OCEANIA ,0-1,2 Australia ,2 1,7 VI. TOTAL ,5-5,5 Source: Hellenic Statistical Authority, Bank of Greece, Border Survey

15 The German market, which is the largest source for Greek tourism fell by 5.9%, meaning 150,000 fewer arrivals. Inbound tourism from Northern Europe, especially from Germany, Holland and the Scandinavian countries, was negatively affected by the political situation creating uncertainty, by the defamatory comments of the international media about the social and economic situation in our country and the risk of exit from the eurozone. The negative climate was aggravated by the political uncertainty caused by the election result of the 6th May. The climax of the instability in our country coincided with the beginning of the tourist season and the time when Europeans choose the destination for their summer vacation. After the elections of 17th June, the situation in the tourist market returned again to normal, but it was too late for a strong reversal of the downward trend in order to offset the loss of the first seven months. The strong decline of the Southern European markets should be attributed primarily to the economic downturn, which these countries are facing. In contrast, UK constituted an exception to the downturn that followed the tourist markets of EU countries. In 2012 Greece attracted over 160,000 tourists from the UK (9.3%). Despite the impressive increase in absolute numbers, the English market is still well below 350,000 tourists compared with the 2008 level. Chart 5 Foreign Tourist Arrivals in Greece (% change 2012/11) 25,0 20,0 18,4 15,0 10,0 5,0 0,0 9,3 9,1-5,0-10,0-15,0-20,0-15,0-14,7-9,6-5,9-5,5-25,0-30,0-23,0-22,9 Source: Hellenic Statistical Authority, Border Survey by the Bank of Greece. The German market has continued to maintain the position of the largest originator of tourism flows in Greece for another year, followed by Great Britain and France

16 The Russian and Norwegian market continued to grow at high rates, despite the high rise they had made the previous year. The Russian market expanded by 18.4%, following the impressive growth of 63.8% that was recorded in It climbed fourth in the ranking in 2012 with 875,000 arrivals, surpassing in size the Italian market. Arrivals from Norway increased by 29.8% after a similar increase in The upward trend continued in the Turkish market that grew by 9.1%. The second largest Asian market after Turkey is Israel. This year it declined by 8.1%, after an increase of 139% over the previous year. The arrivals from Far East declined significantly, mainly due to the precipitation of business tourism. Alarming decline was recorded in arrivals from America. The U.S. market shrank by 22.9% and Canada by 27.8%. Chart 6 Evolution of foreign tourism shares by region (%) Asia 5,8% America 4,6% Other regions 21,6% European Union 68,0% Asia 5,9% America 3,6% Other regions 27,4% European Union 63,1% Source: Hellenic Statistical Authority, Border Survey by the Bank of Greece. Briefly, the image of individual markets in 2012 shows a significant reduction of shares from the U.S. and EU countries. Asian markets improve slightly their share, mainly due to the upward momentum that the Turkish market continues to show. The share of EU countries fell by 5 percentage points. At their greatest extent such losses are covered by the increase of tourist arrivals from European countries outside the EU (Russia, Norway). Finally, the significant drop in arrivals from China and Japan shows that the inhabitants of these countries combine trips to Greece with trade or other business. The Greek destinations have not achieved yet to establish themselves as important centers for touring in the emerging Asian markets. Travel expenditure and average length of stay. According to data from the annual border survey conducted by the Bank of Greece, the average trip expenditure by foreign tourists in our country has declined steadily: from 730 in 2008, dropped to in 2011 (Table 8). Correspondingly, the average daily consumption fell from 76.3 in 2008 to 69.6 in The average length of stay of foreign tourists in Greece decreased from 9.6 days in 2008 to 8.0 in 2011 (Tab. 8)

17 Chart 7 Travel Expenditure by non-residents in Greece 7.000, , , , , , ,0 0, , , ,9 486,3 476,6 466,7 407, , , , , , , ,1 Ι ΙΙ ΙΙΙ IV Source: Border Survey of the Bank of Greece. Indications obtained from the first two quarters of 2012 show that the average length of stay seems to have been stabilized in recent months at the low levels that prevailed after Table 8 Travel Expenditure by non-residents in Greece Year Quarter Expenditure per journey ( ) % Change of Expenditure per journey compared to the same quarter the previous year Expenditure per overnight stay ( ) Average duration of stay ,0 76,3 9, ,3 73,5 9, ,4 68,6 9, ,5 69,6 9, Ι 469,7-0,5% 61,9 7,6 ΙΙ 687,9-4,1% 74,4 9,2 ΙΙΙ 777,2-5,7% 74,6 10,4 IV 539,1-4,1% 72,0 7, Ι 486,1 3,5% 61,9 7,9 ΙΙ 646,3-6,0% 65,9 9,8 ΙΙΙ 686,0-11,7% 70,5 9,7 IV 524,3-2,7% 68,1 7, Ι 421,1-13,4% 62,8 6,7 ΙΙ 624,7-3,3% 70,5 8,9 ΙΙΙ 699,8 2,0% 70,4 9,9 IV 532,9 1,6% 66,5 8, Ι 416,2-1,2% 59,8 7,0 ΙΙ 627,0 0,4% 70,3 8,9 Source: Bank of Greece

18 Tourism seasonality in Greece. According to the results of the Border Survey of the Bank of Greece, in % of the total tourist traffic corresponds to the period June - September, while 85% to the period May - October. The rates for the same periods of the previous two years are almost identical (Chart 8). Consequently, the above periods define the edge ("peak") of the tourist season in Greece within a year for at least the last years. Chart 8 Monthly Distribution of Tourist Arrivals in Greece 25% 20% 15% 10% 5% 0% Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece. Examining the distribution of visitors per month, we observe that the above finding is generally met with some variations among visitors from different nationalities (Chart 9). It is characteristic that 81.3% of the Italians visiting Greece in 2012 made their holidays during the period June - September, while a significant proportion of visitors from the USA came for vacation in Greece in March (3.4%, the percentage is even higher for 2010 and 2011). The Americans also had an increased percentage of total visits during the month of November (7.4%), significantly higher than the corresponding percentage of visitors from other countries. Noteworthy is also the fact that a significant volume of visitors from France (7% of the total French visitors) came to Greece for holidays from April, one month earlier than the visitors of other nationalities 16 17

19 Chart 9 Monthly Distribution of Tourist Arrivals by Country of Origin of the Visitors 2012 Euro Zone Countries Non Euro Zone Countries 50% France Germany Italy 30% U. K. Russia USA 40% 25% 30% 20% 10% 20% 15% 10% 5% 0% 0% Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece. The overall conclusion from the study of chart 9 is that visitors who come to Greece for tourism from the U.S. are more evenly distributed over the period of one year compared to visitors from other country of origin, clearly considering Greece as a purely summer destination. At present, the winter tourism is a comparatively small part of total tourism activity, though with significant growth potential. Overnight stays of tourists in Greece The monthly distribution of the duration of stay in Greece - as is the monthly distribution of tourism expenditure - is identical to the picture of tourist arrivals as it is reflected in Chart 8. The duration is expressed by the number of overnights made by tourists in Greece in hotels and similar accommodation, in houses (owned or not), in vessels, but also in any other type of accommodation. Examining further the number of nights spent by tourists on a monthly basis in 2012, we observe that during the period May - October and even more during the period June September, the number of nights per visit is significantly increased compared to the other months. This picture - despite annual changes - generally occurred in the years 2010 and 2011 (Chart 10). It is characteristic that in the month of December, the length of stay is 30% - 40% lower compared to the month of August 18 17

20 Chart 10 Number of nights per visit on a monthly basis for the years Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece. The length of stay in Greece varies between tourists from different countries of origin, with the Italians generally making holidays no more than 7 days during the winter and 12 days in the summer months, while the Americans prolong their stay generally more than other visitors nationality, especially during the winter months. The Russians showed smaller variations in the length of stay from month to month. In any case, it is again clear the trend of tourists to spend more days in Greece during the summer months. Chart 11 Number of nights per visit on a monthly basis by country of origin of visitors 2012 Euro Zone Countries Non Euro Zone Countries France Germany Italy 19 U. K. Russia USA Jan Feb Ma Apr May Jun Jul Aug Sept Oct Nov Dec 4 Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece

21 Expenditure per visit and day of stay in Greece Changes in tourism expenditure per visit in a year is equivalent to changes in the number of nights per visit. In August 2012, tourists spent on average about 750 euros during their stay, while in December about 420 euros (45% reduction). General expenditure per visit is higher during the summer months (Chart 12). Chart 12 Tourism expenditure per visit on a monthly basis for the years Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece. The only notable differences are related to the size of the expenditure per visit of the American and the Russian tourists who spend more during their stay compared to visitors of other nationalities

22 Chart 13 Tourism expenditure per visit on a monthly basis by country of origin of visitors 2012 Euro Zone Countries Non Euro Zone Countries France Germany Italy U. K. Russia USA Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece. With the exception of the months of August and September, the tourism expenditure per day of stay decreased compared to 2011 (more than 10% for the months of February, March and October). These changes resulted in changing the picture of 2011, which was characterized by significantly higher costs per day spent at the beginning and at the end of the summer tourist season, and going back the monthly change of the size to the picture of 2010, which was characterized by an increase in size until May, stagnation until October and decline thereafter until December (Chart 14). Chart 14 Tourism expenditure per day of stay on a monthly basis for the years Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece

23 The Russians and Americans spent 90 to 110 euros per day in the period May - October, a figure significantly higher than that of visitors from other countries. The Russians also spent more than 160 euros per day in December (probably during the Christmas holidays), while significantly increased, compared to the other months, was the expenditure in the month of December for the French. Overall, however, the daily expenditure of tourists from the 6 main countries of origin is higher during the summer than in the winter. Chart 15 Tourism expenditure per day spent on a monthly basis by country of origin of visitors 2012 Euro Zone Countries Non Euro Zone Countries 100 France Germany Italy 180 U. K. Russia USA Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb March Apr May Jun Jul Aug Sept Oct Nov Dec Source: Bank of Greece. Competitiveness of Greek tourism To better capture the competitiveness of the tourism sector, the World Economic Forum for the last seven years has established the Travel and Tourism Competitiveness Index (TTCI), which measures the factors and policies that influence the development of tourism sector in different countries. This index is derived through the estimation of fourteen separate indicators-pillars, critical for the competitiveness of tourism, which fall into three broader categories of indicators. The first is the institutional and regulatory environment of the country, the second is the business environment and infrastructure, and the third is the man-made, cultural and natural environment. For the 2013 TTCI 140 countries participated. According to the latest data from the WEF, Europe remains the first region in the world in terms of tourism competitiveness, as the first places in the overall TTCI index ranking are occupied by European countries. Switzerland holds the leading position in the general classification, while regarding the three sub-indices holds the first position in the ranking for the regulatory and business environment, and ranks second in the man-made and natural environment. Germany is in the second place of the overall ranking and in the ranking for 22 21

24 the regulatory and business environment. Supremacy in the ranking index for anthropogenic, natural and cultural resources have steadily USA. Finally, Greece lost another three positions in the overall standings for the competitiveness of the tourism sector reaching the 32nd place in 2013 from the 29th place in However, tourist infrastructure in Greece is classified as excellent and ranks in 3rd place on the pillar tourist infrastructure. In a relatively good position (20th) is classified for the aviation infrastructure and the rich cultural resources (25th). The loss of three positions in the overall ranking is considered to be due to the shrinking of available resources for the development of the tourism sector, because of the serious economic and financial problems. Table 9 The Travel & Tourism Competitiveness Index 2013 and 2011 Comparison Overall Index T&T Regulatory Framework Business Environment and Infrastructure T&T Human, Cultural and Natural Resources Countries Overall Rank Score Overall Rank Score Rank Score Rank Rank Score Rank Rank Score Rank Switzerland 1 5,66 1 5,68 1 5, , ,63 2 Germany 2 5,39 2 5,50 8 5, , ,31 5 Austria 3 5,39 4 5,41 2 5, , ,24 10 Spain 4 5,38 8 5, , , ,36 6 USA 6 5,32 6 5, , , ,65 1 France 7 5,31 3 5,41 9 5, , ,20 9 Portugal 20 5, , , , ,84 17 Italy 26 4, , , , ,05 15 Cyprus 29 4, , , , ,27 44 Czech Rep. 31 4, , , , ,61 31 GREECE 32 4, , , , ,58 29 Croatia 35 4, , , , ,37 43 Turkey 46 4, , , , ,63 28 Morocco 71 4, , , , ,89 73 Egypt 85 3, , , , ,74 71 Source: The Travel & Tourism Competitiveness Index, WEF

25 Χώρες Policy Rules and Regulations Table 10 Top Three Performing Economies per Pillar Environmental Sustainability Safety and Security Health and Hygiene Prioritization of Travel & Tourism Air Transport Infrastructure Ground Transport Infrastructure Tourism Infrastructure ICT Infrastructure Price Competitiveness in the T&T Industry Australia Austria Barbados Brazil Brunei Canada Cyprus Finland Gambia Germany GREECE Hong Kong Iceland Iran Italy Kazakhstan Korea, Rep Lebanon Mauritius New Zealand Seychelles Singapore Spain Sweden Switzerland Un. Arab Emirates U. K USA Source: The Travel & Tourism Competitiveness Index, WEF Human Resources Affinity for Travel & Tourism Natural Resources Cultural Resources 24 23

26 Developments in the institutional environment of Greek tourism The previous year 2012 was marked by the re-establishment of the Ministry of Tourism (Presidential Decree 85/2012, Government Gazette A 141/2012). Basis for the establishment of the new Ministry were the services of the former Ministry of Tourism, which were merged into the Ministry of Culture and Tourism through the following institutional and administrative regulations: The Ministry of Tourism also undertook the General Secretariat of Culture and Tourism Infrastructure, which was renamed General Secretariat for Tourism and Infrastructure Investment, while acquiring the competence for the management and coordination of the programmes of the National Strategic Reference Framework (NSRF) that fall within the scope of tourism. The institutional framework, governing the competences of the Ministry of Tourism, continues to be fluid, moving in the direction of the absorption of powers of its supervised public entities. In the context of the overall restructuring of the public sector and the saving of resources, the Organisation of Tourism Education and Training (OTEK) was abolished by the Law 4109/2013 (Gov. Gazette A 16/2013) titled "Abolition and merging entities in the public and broader public sector. The actions and responsibilities of OTEK are eventually carried out by the Ministry of Tourism and its educational units now operate as regional services. In a bill filed for public consultation in January 2013, there is shift of competences exercised by the Greek National Tourism Organization (GNTO) to the Ministry of Tourism in the field of tourism studies and investments. Apart from the transposition of the relevant Directorates of GNTO to the Ministry, the latter detaches the Special Agency for Promoting and Licensing Tourism Investments, which was established in GNTO according to Article 12 of Law 4002/2011 (Gov. Gazette A 180/ 2011), as amended by Article 148 of Law 4070/2012 (Gov. Gazette A' 82/ 2012). At this point, it is worth noting that the tourism business community, as expressed by the professional collective bodies, when welcoming the re-establishment of the Ministry of Tourism, had expressed the view that the Ministry of Tourism should be enhanced by a range of powers exercised by other Ministries, which are considered to be crucial for the operation and development of tourism businesses. The activation of the Special Agency for Promoting and Licensing Tourism Investments which approves and authorizes as "one stop service" tourist investments of over 300 beds, complex tourist accommodation and installations of special tourism infrastructure, marks the first implementation of this new policy by the Ministry of Tourism. During 2012 a number of law changes also occurred in the regulatory field of tourism: Key element to the development of entrepreneurship is the license regime for tourist accommodation, which was amended by Law 4070/2012(Gov. Gazette A' 82/ 2012), in order to simplify and accelerate the process of granting operation license This license is made uniform for the entire hotel unit and its services, including 24 25

27 individual stores, restaurants, bars and swimming pools that operate in the hotel premises. Henceforth, the same person could be responsible for the observance of sanitary rules for all hotel services. The law provides for the possibility of granting by GNTO preliminary approval of the accommodation operation when there is submission of all necessary documents by the interested entrepreneur. A deadline of 50 days is foreseen for the public administration to carry out the necessary controls of the hotel establishment and grant the license operation. Strict disciplinary action is taken against the officials who do not meet the deadlines. The qualifications and requirements for the appointment of hotel Director have been updated to meet the demands of 4 and 5 star hotels, based mostly on higher or university education and work experience of the interested person. The grid of provisions referred to the licensing of hotel accommodation received the favorable impact of rationalization and simplification of the environmental legislation. In accordance with the.joint Ministerial Decision No 59845/2012 (Gov. Gazette B 3438/2012) the environmental licensing of hotel accommodation, within the city limits with a capacity of more than 120 beds and outside the city with a capacity of less than 100 beds, becomes more simple. So, it is no longer required to conduct Environmental Impact Study, but the hotel has to be subjected to Standard Environmental Commitments which form an integral part of the operation license, issued by GNTO. There is no time limit for the Standard Environmental Commitments, which remain in effect unless significant changes occur to the premises, for example increase in the capacity of the hotel by more than 10%. In 2012 the framework for the creation and operation of complex tourist accommodation was completed. This new form of accommodation has been established by Article 8 of Law 4002/2011 (Gov. Gazette A 180/ 2011) and henceforth a series of executive decisions have been issued, such as: The Ministerial Decision No. 177/2012 on determining the technical and functional specifications of complex tourist accommodation (Gov. Gazette B 319/2012). The Joint Ministerial Decision No. 278/2012 laying down specific energy requirements (Gov. Gazette B 615/2012 ) and The Ministerial Decision No 125/2012 on setting standard regulations of joint ownership and operation of complex tourist accommodation (Gov. Gazette B 195/2012). Tourist accommodation complex is a new form of integrated accommodation, which includes 5-star hotel combined with furnished homes and special tourism infrastructure on an area at least 150,000 sq.m. The houses can be sold or leased for at least 10 years, while the proportion of the houses should not exceed 30% of the total build-up area of the complex. It is provided by law to create such a complex in an existing hotel if the area is at least 50,000 sq.m following specific terms and conditions set forth in paragraph 6 of Article 8 of law.4002/2011. This new form of accommodation ceased to be a point of contention between the state and the hotel industry. after the above legislative clarification, that the tourist accommodation 26 25

28 complex is formed by the coexistence of three elements (5*hotel accommodation, special tourist infrastructure and furnished holiday homes ). In the ever changing landscape of special forms of tourism, the Ministry of Culture and Tourism introduced by Law 4070/2012 (Gov. Gazette A' 82/ 2012)., the form of fishing tourism, despite the reactions of the key players in the tourism sector. Fishing tourism consists in providing business packages of tourism services and goods related to fisheries, aquaculture, sponges and to all the cultural and gastronomic environment of fishing communities. The Law provides for the granting of a special license for fishing tourism businesses owned by fishermen or cooperatives of fishermen or fish farmers, who use professional fishing or sponge fishing boats. In the area of marine tourism, which is a major sector for Greek tourism, the Ministry of Culture and Tourism included a special chapter in Law 4070/2012 on tourist ports, modifying the existing legislation for their creation and operation. A redefinition was given for tourist ports in order to include nautical sports vessels and to distinguish for clarity in three separate categories: marinas, anchorages and shelters. The General Secretariat for Tourism now has all the powers of location, administration, management, operation, control and maintenance of electronic records of tourist ports. Prohibition is introduced against docking vessels in fishing ports or shelters where there is licensed tourist port in less than 5 nautical miles. The hotel port which was a particular category of port according to Law 2160/1993 was abolished. A number of issues are also dealt with, mostly related to the creation, process and operation of marinas, the operation rules on the marinas and the rights of the management body. The adoption of the Medium Term Financial Strategy by Parliament with Law 4093/2012 (Gov. Gazette A 222/2012) included a number of provisions that have an impact on the tourism sector, such as: The Law facilitates the hotel enterprises to hire passenger car for private use with driver. Thus, a long-standing demand of the hotel industry is realized adjusting the national legislation in force with European law. The status of the profession of tourist guide is amended in order to align with the requirements of European Law, which are incorporated into Greek legislation (Presidential Decree 38/2010). Consequently it is recognized the right of access to the profession of tourist guide to nationals of Member States of the EU, who are having the relevant qualifications obtained in another Member State of the EU and recognized by the Council for the Recognition of Qualifications in accordance with prescribed procedures. Moreover, intensive training courses for tourist guides are foreseen for archeology and history graduates of domestic and foreign universities 26 27

29 Νational collective agreement for payment terms of the employed in hotel enterprises all over the country. The sectoral collective agreement on payment terms and working conditions of the employed in the hospitality industry could be characterized as widely accepted and so far almost of universal application. It provides for a reduction of the basic sectoral salary of around 15%, while maintaining all benefits (even those removed by the Memorandum of Understanding on Specific Economic Policy Conditionality of February 2012) and bears no changes in the institutional aspects of the previous agreement. The period of validity is from 1/7/2012 to 31/12/2013. The agreement is tailored to the circumstances and new conditions that have shaped the national economy, the tourism industry and consequently the hotel business. It resets rationally and realistically the issue of conditions of remuneration of employees in Greek hotels, moving in three axes: Business survival in an ever-worsening recessionary environment. Maintaining or increasing employment in hotels throughout the country, Achieving industrial peace in a very fragile social environment, the consistency of which is tested daily. Given the fact that the vast majority of hotel enterprises that are small and medium sized struggle for viability, the new national sectoral collective agreement appears to shield the working environment in Greek hotels, preventing bad practices that tarnish the image of the industry and undermine the quality and value of the hotel product

30 Annual survey of ITEP for the hotel market. Identification of research. ITEP in collaboration with the Hellenic Chamber of Hotels makes every year a field research among Greek hotels with the questionnaire method. The questionnaire is sent to all hotels in the country in order to gather information on the fundamentals of hotel units affected by the situation. More specifically, the Hoteliers are invited to indicate their average monthly occupancy rate, the average room price and employment during the months of October, May and August. The survey is usually conducted during September and therefore the October data are related to the previous year. It is also reported the turnover of the previous financial year. The performance of the hotels is associated with the quality and technical characteristics of each unit kept at the database of the Hellenic Chamber of Hotels. In the 2012 survey the response was very satisfactory. Completed questionnaires were received from 1,204 units, representing 13% of the total number of hotels in the country. The hotels that have responded dispose 75,981 rooms and account for the 14.6% of the total capacity. The layered distribution of this year's sample is quite satisfactory. There is only a slight under-representation of low class hotel in some areas. For this reason the averages, presented in the following analysis, were multiply weighted by the number of rooms of each unit, by the relative distribution of rooms among the regions and the proportion of rooms of each star category within the region, so as to reduce the relative bias of the estimates. Reference point for all calculations in the present analysis is the room and not the hotel unit. Changes of hotel capacity was the first year in the postwar period where the number of new hotels was lower than the number of those that closed, thereby recording a reduction in the number of hotel units in operation and a corresponding reduction of their total bed capacity. According to hotel records kept by the Hellenic Chamber of Hotels, the number of hotels has decreased by 80 units and the total capacity of the sector by around 2,000 beds. This unprecedented reduction of the hotel capacity cannot be attributed solely to the economic crisis that our country is experiencing the last three years. Besides, in 2009 and 2010, although Greek tourism had witnessed significant precipitation on the demand side, the hotel capacity in the country increased by 4.4%

31 Table 11 Evolution of Hotel Capacity Year Units Rooms (000) %Change compared to previous year (in rooms) Average Room size ,9 35, ,6 7,4% 38, ,1 0,2% 39, ,5 3,7% 39, ,4 2,8% 39, ,5 3,1% 39, ,9 3,7% 39, ,7 1,9% 39, ,2 1,5% 40, ,0 1,0% 40, ,1 1,9% 40, ,0 2,1% 40, ,7 3,8% 40, ,2-0,4% 41, ,0 0,7% 41,3 Source: Hellenic Chamber of Hotels. It should also be borne in mind that, during the period in question, the investments, that were initiated prior to 2008, were in a state of completion, since many new projects had been subsidized by development law. It is worth noting that in Greece the average time between the completion of a project, since its inclusion in the Development Law and the time of actual operation of the unit, is five years. The most likely explanation for the reduction of the hotel capacity is the over-taxation imposed to the industry after 2011 The mandatory inclusion of those who co-manage small hotels in the Self-Employed Insurance Agency as well as the above mentioned over-taxation of real estate, made the operation of small units, targeted primarily at low-income Greek clientele, unprofitable. This explains why most closed units were located in the mainland and in the urban centers. In 2012, the older investment projects that were completed exceeded the number of closed units, so the hotel capacity in the country increased by 22 units and 3,110 rooms. Most new units opened in the Cyclades and the Peloponnese, while in Central Greece, Western. Macedonia, Thrace and Thessaly the number of hotels has continued to decline. The average size of hotels in Greece continued to increase: from 41 rooms in 2011 it reached 41.3 rooms in