The island of Crete experienced a stellar tourism season for 2018 with roughly €5 billion euro being spent from January through October, according to figures from the Bank of Greece. Overall, Greece saw travel receipts exceed €15.6 billion, which is an increase of 9.9%, compared to the same period of 2017 and is primarily due to a 10.8% increase of arrivals of non-residents of the country. The data also showed that Crete was responsible for fully one-third of these revenues. The tourism bonanza does not reflect, however, the lost opportunity costs of overbooking sub-premium vacations.
The Good News
According to Nikos Chalkiadakis, President of the Union Hotel in Heraklion, from 15.6 billion. about 5 billion., so 1/3 of the travel receipts, go to the island of Crete. Furthermore, these receipts in the 10 months amounted to 15,613 billion. euro versus 14,211 billion. euros in the same period of 2017 and 12,803 billion. of euro 2016. The lift in receipts reflects success for the objective of lengthening of the tourist season, since the month of October was excellent, with increase in travel receipts by 18.3%, which was accompanied with an increase of arrivals of non-resident travelers by 15.6%, breaking any historical precedent in arrivals. Travel receipts in October amounted to 1.4 billion. euros, compared with 1.2 billion. euro in October 2017 and a billion. euros the same month of 2016.
This good news may be short-lived, however, as experts predict tougher competition from Turkey and Egypt in 2019. Since Turkey is cheaper than Crete and Egypt is gaining interest from Russian travelers again, tourism professionals hold a guarded expectation for Greece overall next year. German tour operators express the view that the record of 2015 could again be achieved for the Turkish tourism, the Turkish hoteliers to capitalize on the year’s rise and have already secured a higher price in (p.p. which had a “throw” of the previous years), having the opportunity to cover the losses of previous years. But this “optimism” could be TUI and other monoliths posturing for better negotiations with hoteliers.
In Between the Lines
The report on Crete tourism comes with the caveat that “Germans are the best and most stable of our clients,” which certainly means the report by Insete Intelligence is biased. The German market is stable because of factors of promotion and price, since TUI more or less rules the package accommodations and trips field. This previous report on TUI efforts to leverage Crete reveals the underneath of country competition. The bottom line for Crete and other destinations mentioned is that the big tour operators are surely pitting one destination against another before the flood of bookings comes in. Greece, Turkey, and Egypt on the billboard as “cheap” vacation spots sounds like a TV commercial to me. And nobody seems to be thinking about sustainability or “best practices” either.
Make no mistake, this news is part of a much larger push by TUI and the other big tour operators to sustain growth. A report from Skift the day before Christmas amplifies my contention here. TUI Group wants to play an even bigger role in the market, and the company has already gobbled up a bigger presence with the acquisitions of Hotelbeds’ destination services division in March and online platform Musement in September. Earlier this month TUI celebrated the reopening of the world’s first Robinson Club in Fuerteventura, and announced the 2020 opening of Robinson Club Ierapetra, on Crete.
Prime tourism is so widely overlooked on Crete. Desperate for bookings, hotels here have more or less prostrated themselves to covet TUI and other tour operators’ guests. I’ve seen this since 2014 when we first visited to discuss off season offerings with hotels here. And the problem has grown to epic proportions now. The “balance” of the tourism product here on Crete is massivley akilter, and I am not the only one concerned. Nikos Chrysogelos is a Greek politician and environmentalist who fears big problems ahead for Greece. This Traveller story cites his reasoning:
“We can’t keep having more and more tourists. We can’t have small islands, with small communities, hosting one million tourists over a few months. There’s a danger of the infrastructure not being prepared, of it all becoming a huge boomerang if we only focus on numbers and don’t look at developing a more sustainable model of tourism.”
That story highlights the disastrous damage done to infrastructures in cities like Barcelona, Venice, Amsterdam, Dubrovnik, Madrid, and on the island of Mallorca by overflows of tourists. In 1995 Greece had just over 4 million tourists, and in 2018 there were 32 million. The Greek National Tourism Organisation (GNTO) is supposedly aware of the dangers, but their solution is to make the touristic season bigger and to dilute the massive touristic flows over more months. But as anyone in business knows, more availability in Summer will only see more bookings for cheap TUI guests. The GNTO solution is a facade. The government needs tax euros and big business, and any solution a government agency comes up with is going to be tainted by this. Santorini will sink like Atlantis again, and Crete will be as dry as a popcorn island when the GNTO and other governmental agencies will be heard crying “sustainable-sustainable-sustainable” – and everyone reading this knows it.
So, what’s the solution? The answer is blatantly simple. Regulate over-tourism using price. If TUI threatens to take their guests to Timbuktu, let them. Crete and the rest of Greece have to have leverage on the corporate giants, and prime tourism can create that lever. The economics are there. 50% booked at price “A” is a lot more profitable than 100% booked at price “B” considering overhead and all other factors. Too many are seeking guarantees in light of the obvious long-term damage over-tourism will cause. The Palace at Knossos cannot withstand the 8x increase in visitors in between 1995 and today, let alone another 10x increase the GNTO and other decisionmakers would have. Somebody has to do some keen thinking in order to make the right decisions now. €5 billion seems like a lot of money typed into a headline, but what was the cost to encur that revenue boost? I am not seeing shop owners driving luxury cars just yet. Everyone on the street just seems wearier and just as broke.
TUI and the government are NOT solving the bigger problem. I leave you with a citation from The Telegraph’s Greece travel expert, Jane Foster, who says Santorini is already in trouble, but that Rhodes and Lindos “were still madly busy when I was there last year in late September, so I imagine they were unbearable in July and August”. Now imagine a review of Chania or Ierapetra that includes the word “unbearable” from a travel reviewer. Crete was “unbearable” in August. I am not looking forward to that billboard for my favorite destination. If the trend keeps on, pretty soon “Tourists Go Home” will be a theme on Crete.