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Newsletter October 2011


Tourism: Strong Numbers; Diving on the Upswing

Greece’s tourist hotels are enjoying strong occupancy rates in 2011, with a strong uptick in international arrivals. In addition, diving is enjoying strong growth in Greece.

According to GBR Consulting, the second quarter was good for Greece’s tourist hotels, which registered an increase of 12.4% in Revenue Per Available Room (RevPAR) compared with the corresponding quarter of 2010. Hotels in Athens registered a significant improvement of 8.9% and hotels in Thessaloniki a 3.3% increase.

The consulting group reported that International arrivals by air really picked up in the second quarter of this year, with Thessaloniki and the rest of Greece seeing substantial increases of 20.9% and 17.0% respectively in Q2, while Athens stabilised. As a result the YTD numbers turned positive as well, while Athens improved from YTD Q1 of -8.3% to -3.0% in YTD Q2.

In terms of RevPAR the developments for Athens and Thessaloniki were also positive with an increase of 8.9% for Athens compared to -4.3% in Q1 and 3.3% for Thessaloniki compared to -11.1% in Q1. The resort hotels opened their doors in Q2 and showed excellent performance with an increase of 12.4% in RevPAR compared to Q2 of 2010, resulting in a YTD of 11.2%.

According to the 2011 Q3 Barometer of GBR Consulting, resort hoteliers are bullish for Q3 regarding occupancy, while for ARR prospects the outlook ranges from stable to slightly optimistic.

Other Developments in Tourism

Airotel Expanding in Greece
Airotel is one of the few chains continuing to expand in city destinations; it has just opened its 7th hotel in the city of Kavala, the 150-room Galaxy Hotel, approximately 1 year after opening the Smart Hotel in Patras. Its expansion plans are based on concepts suitable for the current economic climate.

Spectacular Increase in Arrivals
According to a report of the Hellenic Statistical Authority in July 2011, there was a spectacular increase comparing foreign arrivals of Q1 2011 with 2010 from France (+70.5%), Russia (+79.8%) and Turkey (+97.8%) while arrivals from Britain rose by 32.4% and from the U.S. by 16.6%. On the other hand there was a decline of 19.5% in arrivals from Germany and 15.9% from Cyprus.

Tourism Industry Strengthened—Three Factors
In addition to the increased number of arrivals reported in 2011, the tourism industry as a whole strengthened in 2011, mainly due to a) the reduction of VAT for hotels, enhancing their competitiveness, b) simplified procedures for travel documents, particularly boosting Russian arrivals and c) partial lifting of restrictions for the cruise industry.

Diving: Huge Potential for Tourism Growth

Niche tourism sectors can be powerful economic multipliers. Dive tourism is an ideal example.

Some 250,000 divers from abroad, with their families, are expected to visit Greece through the end of October 2011.  The number from June to date has already reached 115,000 divers, according to Society for the Protection and Promotion of the Submarine Environment and its Surroundings president George Tzanakis.

Some 70 percent of the divers who have already visited Greece this year are from Germany, Russia, Spain, France and Italy, and the other 30 percent are from the U.S.

According to Mr. Tzanakis, Greece was selected as the favored diving destination by 95 percent of a total of 7,500 divers who responded to questionnaires.

Taking advantage of 2005 legislation allowing recreational diving throughout Greece, with the exception of designated archaeological areas, local government administrations throughout Greece have launched a campaign to attract "diving tourists."

Greece earned this "title" for three main reasons cited by the respondents to the survey: "theme," given that there are more than 20,000 shipwrecks in the Greek seabed, of which 6,000 have been formally recognised; "price," as diving in Greece costs about one-third of that in other diving destinations such as Malta, Italy, Croatia, Turkey and Cyprus; and "family," since the families of the divers are quite happy to accompany them to Greece, which offers a plethora of other activities for an enjoyable holiday.

Greece, says Mr. Tzanakis, has an impressive 16,500 kilometers of coastline suitable for diving, with the main destinations of foreign divers being the islands of Kos, Corfu, Zakynthos and Crete, while the recent approval of the re-delimitation of the Northern Sporades area, with 14 new diving spots, creates a new momentum to the Greek market for diving tourism.

Diving tourism, he said, is a powerful "magnet" for attracting more visitors, and added that, according to figures from the international organisation PADI (Professional Association of Diving Instructors), which provides training for divers, more than 20 million certificates have been issued at global level.

Given that 3.5 million of those certified divers are from Europe and 800,000 of them travel abroad each year for new diving experiences, it is readily apparent that "Greece has immense prospects of potentially becoming even their top destination," Mr. Tzanakis said.

A Global Tourism Destination
Greece is one of the top tourism destinations in the world. In fact Lonely Planet placed Greece among its top 10 destinations for 2010 and the Greek Islands were voted the best island destination in the world globally by Conde Nast readers in 2011.

The number of tourism visits over the last decade has shown a steady increase. From 14.2 million international visitors in 2004, more than 17 million people visited Greece in 2010, and it is expected that in a few years this number will reach 20 million, almost twice the country’s population.

The increasing number of tourists and the evolving profile of today’s traveler demand a host of new tourism offerings and infrastructure projects. In Greece, investors will find a wide spectrum of opportunities, a welcome environment for new investment, and some of the most beautiful locations in the world.