SETE: Tourism could help econ­omy re­turn to growth, but risks re­main

Kathimerini English - - Focus - BY RE­NEE MALTEZOU

Greek tourism rev­enues may rise by up to 9 per­cent this year, help­ing Greece re­turn to strong eco­nomic growth, but po­lit­i­cal is­sues could cloud that fore­cast, the head of Greek tourism body SETE told Reuters yes­ter­day.

An­dreas An­dreadis said 2017 tourism rev­enues could rise up to 14.5 bil­lion eu­ros – af­ter a 6.4 per­cent drop to 13.2 bil­lion eu­ros in 2016. Tourist ar­rivals were seen in­creas­ing to 27 mil­lion vis­i­tors from 25 mil­lion last year.

With a long coast­line and dot­ted with is­lands, Greece re­lies on its sandy beaches and an­cient tem­ples for an eco­nomic re­cov­ery.

Tourism ac­counts for about 18 per­cent of its gross do­mes­tic prod­uct and em­ploys a fifth of its work force.

The coun­try aims at 2.7 per­cent growth in 2017 and hopes to re­turn to bond mar­kets this year, af­ter seven years in bailouts that plunged it into deep re­ces­sion.

But the pro­jec­tions hinge on Greece con­clud­ing a re­view soon of its bailout progress with its in­ter­na­tional lenders, avoid­ing a flare-up in re­la­tions with neigh­bor­ing Turkey and han­dling the mi­grant cri­sis ef­fi­ciently.

“We could see a re­bound to 14.2-14.5 bil­lion eu­ros, which trans­lates to a 9 per­cent in­crease year-on-year,” An­dreadis told Reuters. “But these es­ti­mates come with con­di­tions.”

He added he ex­pected a drop in cruise ar­rivals this year – from 2.5 mil­lion last year – due to the po­lit­i­cal in­sta­bil­ity in the re­gion and mainly Turkey, which holds a con­sti­tu­tional ref­er­en­dum in April.

Re­la­tions between Greece and Turkey, neigh­bors and NATO al­lies, have been strained since a Greek court re­fused to ex­tra­dite eight Turk­ish sol­diers seek­ing asy­lum in the coun­try af­ter a failed coup at­tempt against Re­cep Tayyip Er­do­gan in July.

Both coun­tries, which re­main at odds over ter­ri­to­rial dis­putes and eth­ni­cally split Cyprus, play an im­por­tant role in man­ag­ing Europe’s mi­gra­tion cri­sis.

“The sit­u­a­tion in Turkey is cur­rently un­pre­dictable... Af­ter April, ten­sion will defuse ev­i­dently,” he said, adding that it was in Greece’s in­ter­est to “keep its cool.”

Prob­lems man­ag­ing the mi­grant cri­sis last year took a toll on book­ings for Greece, a gate­way for migrants to Europe, and forced busi­nesses to slash prices, which in turn led to re­duced rev­enues de­spite a peak in ar­rivals, An­dreadis said.

SETE ex­pected a 2 mil­lion rise in ar­rivals this year be­cause “the im­age of Egypt and Turkey has not re­cov­ered [and] Greece is a safe des­ti­na­tion while Spain in­creased prices,” he said, re­fer­ring to a main com­peti­tor for sun-seek­ing tourists. “In this en­vi­ron­ment, Greece of­fers best value for money.”

Ini­tial data point to in­creased de­mand from Rus­sia. Pre-book­ings from Ger­many and Bri­tain, Greece’s main tourist mar­kets, are also up year-on-year de­spite Bri­tain’s de­ci­sion to leave the EU, said An­dreadis, who will present SETE’s out­look in de­tail in Berlin next week.

Greece signed up to its first bailout with the Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund in 2010. Its third bailout ex­pires in 2018, and the IMF has yet to de­cide if it will par­tic­i­pate in the coun­try’s cur­rent res­cue pack­age. A rift between the EU and the IMF over Greece’s progress has clouded its lat­est bailout re­view, which has dragged on for months, re­viv­ing fears of a new Greek cri­sis. The lenders’ mis­sion chiefs re­turned to Athens yes­ter­day to re­sume talks.

“It was a first step but we don’t have a deal yet,” said An­dreadis. “This is a sig­nif­i­cant risk, which could af­fect de­mand and ar­rivals, if there is no happy end.”

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