INSETE Study Lays Groundwork for Truly Sustainaable Greece Tourism

Numbers from a new study released by INSETE, the Greek Tourism Confederation’s (SETE) intelligence body show big growth on lesser returns. According to the study arrivals in Greece increased by almost 90% in the period 2005 – 2017. Meanwhile, the average tourist spend dropped by 30% on the view of source markets.  Once again, however, sustainability for Greece’s tourism seems a highly subjective case in point. Here’s the report, followed by some objective observations. 

The INSETE analysts looked at incoming tourism, arrivals, overnight stays and travel receipts and key indicators including average spending, average stay duration, etc over the crisis years which impacted Greece’s economic growth. The researchers focused on key source markets, including Germany, the UK, France, the US, Italy, Netherlands, Russia, Australia, Romania, Belgium, Switzerland, Cyprus, Turkey, Bulgaria, Sweden, Austria, Albania, Canada, Denmark, Czech Republic and Spain – which account for 85 percent of all travel receipts of incoming tourism in Greece for 2017.

The final INSETE study results revealed that arrivals to Greece grew by 89% over the period 2005-2017, or 27.2 million in 2017. In all overnight stays rose by 36.8 percent, to 209.8 million in 2017, with revenue increased by 32.4 percent, to 14.2 billion euros in 2017. However, average spending per person over the same period On the downside average spending per person in the 2005-2017 period dwindled by 30 percent – to 522.3 euros in 2017. This meant the average expenditure per night shrank by 3.2 percent – to 67.7 euros in 2017, and that the average duration of stay dwindled by 27.6 percent – to 7.7 days in 2017.

The negative side of the INSETE analysis revealed what appears to be a systemic problem Greeks now wrestle with. With average spending per person among eurozone travelers dropping 19 percent, and with an overall 30% drop, Greek businesses dependent on tourism revenues are suffering a double negative impact. Drastic austerity and increased taxes, along with this imbalance of economy in the industry, has presented a seemingly insurmountable hurdle for many hoteliers and other tourism-dependent business.  

Given the fact touristic flows have skyrocketed for the period 2012 to 2017, the negative win indicated by INSETE’s work should be a benchmark for any future sustainable tourism work in Greece. Official channels are keen to present huge numbers in support of Greece authorities and programs, but the reality of burgeoning Greek tourism can only be assessed looking at the overall impacts. I’ve highlighted previously some of the negative trends being set by companies like TUI, Thomas Cook, and others. Now the INSETE report substantiates to a degree my claims the trend is totally unsustainable. 

This April report by INSETE shows a massive increase in UK and German demand for airline seats to places in Greece like Heraklion, on Crete. A key point of my previous arguments is the fact TUI and other travel companies are ushering in budget seeking German travelers is paramount for any understanding of real sustainable tourism. A “for instance” being the fact the average American tourist spends an average of €935 euro compared to €678 euro per German visitor. The Germans spend €65 euro per day, and the Americans spend €89, but the real quotient for unsustainability lies in the fact Greek providers and workers cannot afford the lost potential revenue. It’s a downward spiral that only has one ending no matter how many millions of tourists visit. 

Seeing for once the actual numbers so vividly presented, it’s easier to imagine a Greece that is no longer coveted because of its culture and kindness, but one avoided for having become a German bean counter ecosystem and culture. Profit, growth for the sake of short and medium term gain, these realities will only sink in once the old Greece is destroyed to make way for 1,000 more all-inclusive feed troughs. Crete to Kos, the present model will end in unfriendly, underpaid peasants who cannot smile at their British or German guests anymore. Philoxenia, that quality of loving strangers Greece is so notorious for, it will mutate. The average hotel waiter in Greece, for instance, makes a bit less than €500 per month. Whereas in Italy this salary is nearly 2x, and for the worst drive-in window clerk at McDonald’s in Germany, the pay is in excess of €1,000 euro per month. 

Looking at this report with a long view, the solution for Greece seems blazingly simple for me. The tour companies, officials, and even the hoteliers here in Greece all formulate their plans based on demand. For instance, the German inbound market is catered to not only because TUI is pushing it, but because hotels like those here on Crete want that guarantee. They need 99% occupancy even if it costs them their business. As crazy as it sounds, this is the reality. Why more hotels are not engaging Russia (€732 euro pp) and Austria (€700 euro pp), whose travelers spend more than any but the Americans, is anybody’s guess. Maybe there’s no Russian TUI to offer a chunk of revenue all at once? 

Even if we look at the micro-economic impacts of this questionable tourism bonanza, huge questions remain unanswered by SETE, the GNTO, and even the WTTC. Once again these organizations’ affinity for big numbers obscures any real sustainable future. Take, for instance, the projections on job creation from this WTTC report. Let me quote directly here: 

“Travel & Tourism generated 459,000 jobs directly in 2017 (12.2% of total employment) and this is forecast to grow by 5.2% in 2018 to 482,500  (12.4% of total employment)”

Finally, the reality for Greeks can be seen in how Greece compares to other countries in the total revenue gleaned from tourism. Italy, for instance, gained €106 billion euro in 2017, but Greece only eeked out €16.2 billion in direct contribution to GDP. Please take note here, this figure does not even meet the world or European Union average. And where overall contribution is concerned, matters are even worse since Greece is barely at 60% of the European norm. Tourism is creating jobs, but what salaries can be expected from a downward spiral price structure? How can Greek businesses survive on ever decreasing revenues? Take the WTTC report’s revelation that visitor exports, or the money tourists spend here, are not even on a par with Portugal, which has about the same population and GDP. Using the interactive below you can compare these export numbers to see how other countries compare. 

The bottom line for Greeks and their situation cannot fully be portrayed without looking at all these figures skeptically. Another “for instance” from the WTTC report reflects growth for Greece from now until 2028 to be a lot less than Egypt, Malta, Turkey, Cyprus, and the world at large. Essentially, the numbers do not indicate what the vested interests say they indicate. Stagnation of the real win for Greek businesses is what I am seeing. This is indicated in the Visitor Exports (Another WTTC report) numbers in particular. With inflows skyrocketing in every other aspect, how can consistent 4% growth in tourist spend spell “sustainable?” It cannot. Let me say this again, it cannot. We have to do a better job of crunching the numbers, but more importantly, we must be more objective and think long term. Sustainable for the future does not mean until 2028, it means sustainable indefinitely. We cannot attain the solution by referencing business or government focused on profit now.