Greece Tourism Report Q3 2009

SWOT Analysis
Greece Tourism Industry SWOT

Island beaches will always be a key attraction

Staging of the 2004 Olympics has allowed a considerable upgrading of the

countrys overall infrastructure

Greece is being regarded as an increasingly expensive country, reducing one of its

traditional attractions as a tourist destination

Responsibilities for the tourism industry are spread among many ministries,
causing numerous problems

Post-Olympics era includes the development of an investment-friendly environment

Government is seeking to prioritise tourism development over the coming years

Development of green tourism is a government priority over the medium term

(ecological camping and marina tourism, for example)

Potential Formula 1 track could build on the Olympics to boost the sectors
attractiveness

Boosting investment to make Greece an all-year-round tourist destination

Greece is becoming an important destination for corporate events and conferences

Very strong growth in passenger numbers in the low-cost airline sector (which
should also tie in with efforts to promote city break tourism in the country)

Rival destinations outside the eurozone (especially Croatia, Turkey, Tunisia and
Egypt) are gaining ground in terms of market share due to the competitiveness of
their own national currencies

Further political unrest, as occurred in street violence at the end of 2008, would be
particularly damaging for the tourism industry

Strengths

The re-election of the economically liberal centre-right New Democracy (ND) party
in September 2007 should mean a continuation of fiscal consolidation, and probusiness reform

Weaknesses

Tensions between Macedonia and Greece over the former country's use of the
name 'Macedonia' are likely to persist, but this does not pose a serious threat

Opportunities

Relations with Ankara have improved significantly and Athens' support for Turkey's
efforts to join the EU will enhance the prospects for regional political stability
There is evidence the spending spree on infrastructure and capital projects for the
Olympics in 2004 has had a knock-on effect of spurring private sector investment

Strengths

Weaknesses

Opportunities

Threats

Greece Political SWOT

Threats

The shadow of corruption still lies over the public administration a scandal over
alleged pay-offs to government-appointed pension fund managers in 2007 badly
damaged the New Democracy Party

The worsening economic situation globally threatens to derail the governments

reform agenda and elevate political discord regarding appropriate policy response

Business Monitor International Ltd

Page 7

Greece Tourism Report Q3 2009

Greece Economic SWOT

Strengths

Greek real GDP growth has consistently outpaced that of the eurozone over the
past several years
The budget deficit has been reduced substantially since the ND first came to power
in 2004

Weaknesses

A rapidly ageing population and a rising social security bill pose long-term fiscal
risks and international financial bodies have warned that in its current incarnation
the pension system could collapse before 2025

Opportunities

Greeces profile has risen as a result of the Olympics, which has also boosted
tourism revenue
Although growth is slowing somewhat, the expansion of domestic demand will
continue to outstrip the eurozone average

Threats

EU development funds are in long-term decline, as the eastward expansion of the

EU means Greece is no longer one of the poorest countries in the organisation
A wide current account deficit will prove a serious concern as credit markets
remain tight. Finding financing amid a global recession is set to become more
difficult

Greece Business Environment SWOT

Strengths

Weaknesses

Opportunities

Threats

Membership of the eurozone reduces transaction costs for exporters

Strong investment in recent years (due to the Olympics and EU funding) has
improved long-term growth potential
Comparatively low-cost environment within the eurozone
A poor record on corruption. Greece came last out of all Western European states
in Transparency International's Corruption Perceptions Index 2008, below Italy and
Portugal
A continued reputation for heavy bureaucracy
The EU enlargement in May 2004 improved access to markets in the 10 new
member states, and Greece is geographically well-placed to benefit
Olympics-related investment in Athens has greatly improved transport and
business infrastructure in the city
The centre-right government has begun to implement limited labour market reforms
and economic liberalisation
Inflation will remain above the eurozone average throughout the forecast period,
thereby chipping away at international competitiveness
High levels of government debt will constrain growth and reduce the government's
ability to run an expansionary fiscal policy over the medium term should growth
disappoint
The accession of 10 new member states to the EU in May 2004 most of which
are low-wage states has increased competition

Business Monitor International Ltd

Page 8