According to figures compiled by the Institute of the Greek Tourism Confederation (INSETE), per capita spending by holidaymakers to Greece has declined drastically these last 15 years. Among the causes listed, the inflow of tourists from the Balkans and Eastern Europe, alongside the absence of an integrated strategic plan to attract higher-income visitors are major causes. Here’s the latest report along with major causes and suggestions.
The figures from INSETE show a 30 percent decline in the per capita spending by visitors to Greece over the last few years. In 2018, for instance, the average per capital expenditure of visitors to Greece amounted to 519.6 euros, as compared to 2005 when average spending was 745.7 euros per trip, which means expenditure went down 226.1 euros or 30.3 percent.
The biggest part of this revenue loss (63.2 percent or 143 euros) can be attributed to the shortening of the average stay, and 29 percent, or 65.5 euros, to the change in the mix of markets that comprise Greek tourism. On the latter, the report showed that Greece now has more visitors from countries with lower disposable incomes. However, the report does not take into account the EU28 segments like the ultra-conservative German contingent simply spend less anyhow. This is another facet, however.
The report aslo points out inflation since the 2005 season, as an even further spending reduction aspect. Giving Spain as an example, INSETI showed how a comparable market grew significantly while Greece lagged. In Spain the average daily spending was about €600 euros. INSETE’s general director Ilias Kikilias notes that in order to increase tourists’ per capita spending, Greece will need to:
“Create a more sophisticated product with higher-quality features that would upgrade the overall experience of the visitor and concern all links of the value chain that make up the tourism product.”
Kikilias went on to suggest that Greece needs “a more efficient management of destinations with specific strategic planning.” In addition, better cooperation will be needed in many sectors in order to better prepare to welcome higher income visitors.
To this I would add, that tour operators and Greek businesses are to blame for catering more to lower income visitors. A story I wrote recently about TUI and “all-inclusive” holidays brings the point home. Crete, as one of Greece’s best touristic destinations, is not preparing for high-end tourism. On the contrary, the trend on this island is to do more budget all-inclusive business, not less. The short version being, Greece is selling herself short in almost every respect. I’ll not even get into economic impact studies here. The point is, the balance in Greece is slanted toward budget travelers almost exclusively. And the situation is getting worse.
Another recent report of mine showed how an influx of American tourists to Greece has positively affected touristic spending. At least this is true for the first quarter of 2019. Receipts from visitors outside the EU28 elevated spending on the order of plus 30% in the first part of this year. But these plus figures were not about Greece offering a prime product, only a well publicize cheaper one. What I am saying is, the “value” Greece is offering is economy and value, with the “experience” as a secondary consideration.
On top of the infrastructure and other improvements Mr. Kikilias suggested, I would add a rethinking of marketing and PR ideas. Let’s face it, high net worth individuals are looking for deals, but they also want unique experiences only Greece can offer. I can think of at least one marketing concept the Greek Tourism Ministry or other agencies have not thought of. Appealing to the first-time Greek visitor is something that is always on the periphery of Grece travel marketing for hotels, cities, resorts, or governmental ministries. Marketing should focus on media like this, revealing the unique experiences here in Greece.
But convincing the often archaic agencies of Greece (and Europe for that matter) can be painstakingly difficult. Not 30 minutes ago I had to literally beg a wine collective to send me their press releases, news, and photographs – this happens so often. The value of so-called “earned media” has gone into the trash basket with paid marketing taking over the visibility show. Everybody is relying on Google ads and OTAs or third parties to carry their publicity load. Some, like my friends on Crete, have all but forgotten the power of information. Now factor this in with Greece’s revenue woes. A real journalist cannot even tell the story anymore.
This INSETE report should be a wakeup call to the powers that be in Greece tourism. The simple factor my hotelier pals, the retailers in Heraklion, or our tour guide friends should consider is not losing 30% of their income, but what they could do with 30% more! Oh, I forgot to add the growth of 3% per year, now what is €740 something euro per trip times 14 years? Or did INSETE adjust for inflation? I’ll let the hotelier reading this do the math.
In my next report I’ll offer suggestions for expanding the prime tourism dimension. Promoting extreme luxury villas like the Luxury Villa Omikron (feature image) outside Heraklion will be part of the touristic shift.