Greek Tourism under crisis-strategies, and the way out

Sotirios Varelas, PhD Candidate Department of Business Administration, University of Piraeus,

svarelas@webmail.unipi.gr
Ioannis Katsanakis, PhD Candidate Department of Business Administration, University of Piraeus,

jkatsanakis@gmail.com
Nikolaos Georgopoulos, Professor Department of Business Administration, University of Piraeus,

ngeorgop@unipi.gr

Abstract
Tourism is seen as a useful means of change as it cuts across a variety of economic sectors and is primarily comprised of small and medium sized firms. It is also perceived as an activity that offers straightforward opportunities to achieve a comparable structure, organization and level of provision to the Greek economy. In particular, strategic planning in the region was critical to the future success of tourism as attempts were made to utilize tourism in the process of economic growth. In past decades, due to the lack of strategic planning at the government level, tourism development created a tourism product inherited to them that was weak and with serious problems. The recent international financial crisis has affected Greek tourism not only in multitude financial terms, but also it became more of an obvious structural weakness model developed out of good options and specific central guidance. The year 2010 marked a landmark year for Greek tourism, its influences causes and effects of the economic crisis created a combination of chronic weakness. More than ever, it is obvious that the tourism sector is one of the most competitive advantages of Greece, which is able to lead the economy out of crisis. In recent years, the global tourism industry has experienced many crises such as political instability and economic recession. Currently, uncertainty about the duration, depth, and implications of the global economic crisis persists and is transmitted into the tourism industry. Key words: Tourism, financial crisis, strategic management, Greece, crisis management, decline in tourism demand, competitive advantage

Introduction
The current crisis in the performance of the tourism sector in Greece is part of the more general economic crisis which has mainly affected the fiscal and the financial sector. At the same time the economic crisis hinders the development and the competitiveness of the Greek economy as well as employment.

These circumstances demand the revision of the policies applied so far in the tourism sector not only in regards to the methods, the tools and the individual intended objectives but also in regards to the criteria, the priorities and the lines of action within a framework of a clearly defined and coherent strategy with a mid- and long-term outlook.

Economic Crisis, Recession and Tourism

Investigations into the effects of financial and economic crises on the tourism industry are quite rare (Kuo et al. 2008; Lim 1997; Lim, Min, and McAleer 2008; Pambudi, McCaughey, and Smyth 2009; Smeral and Wuger 2000, 2005, 2008; Song and Li 2008; Song and Witt 2000). These studies typically look into the Asian crisis of 1997 (Prideaux, Laws, and Faulkner 2003; Huang and Xu 1999; Wang 2009). During former downturns and crisis situations, people experiencing short-term income losses financed their travelling mostly from savings. If the trough took longer to traverse, they tended to cut down on their holiday expenditure (cheaper accommodation, fewer visits to restaurants, shorter stays, nearer destinations, etc.) rather than give up travelling altogether. If things got even worse, they made it without a holiday trip, especially when their reduced budget made it necessary to concentrate spending on indispensables. (Smeral, . 2009) Unmistakably, the overall trend of international tourism showed a downturn in 2009 compared to the upward trend of previous years. This is mainly due to the recession which had already started to appear in the final months of 2008 and which hit the economies of the main tourist-generating countries. More specifically, in 2009 there was a decline of -4.2% for the year 2008 while the previous years of 2006, 2007 and 2008 posted positive figures (5.5%, 6.5% and 2.0%, respectively). Estimates of the World Tourism Organization for the development of international tourism in 2010 were confirmed as positive since the emerging economic recovery of generating countries led to an increase in the total number of international arrivals by 4% (UNWTO 2010).

Greek Tourism: a victim of the economic crisis

In 2009, Greece maintained its 16th position in the global ranking of countries based on the number of tourist arrivals which had declined in 2008 (14.9 million arrivals). According to preliminary data by the Hellenic Statistical Authority (ELSTAT), in 2010, however, arrivals merely exceeded the 15 million mark (15,007,490) and Greece lost its position to Thailand and is now ranked 17th. Table 1: International Tourist Arrivals (millions) Rankings Country 2006 2007 1 France 78,9 80,8 2 U.S.A. 51 56 3 Spain 58,2 58,7 4 China 49,9 54,7 5 Italy 41,1 43,7 6 United Kingdom 30,7 30,9 7 Turkey 18,9 22,2 8 Germany 23,5 24,4

2008 79,2 57,9 57,2 53 42,7 30,1 25 24,9

2009 76,8 54,9 52,2 50,9 43,2 28,2 25,5 24,2

2010 76,8 59,7 52,7 55,7 43,6 28,1 27 26,9

9 Malaysia 17,5 21 22,1 23,6 24,6 10 Mexico 21,4 21,4 22,6 21,5 22,4 11 Austria 20,3 20,8 21,9 21,4 22 12 Ukraine 18,9 23,1 25,4 20,7 21,2 13 Russia 20,2 20,6 21,6 19,4 14 Hong Kong 15,8 17,2 17,3 16,9 20,1 15 Canada 18,3 17,9 17,1 15,7 16,1 16 Thailand 13,8 14,5 14,6 14,1 15,8 17 Greece 16 16,2 15,9 14,9 15 18 Egypt 8,2 10,6 12,3 11,9 14,1 19 Poland 15,7 15 13 11,9 12,5 20 Macau 10,7 12,9 10,6 10,4 11,9 21 Netherlands 10,7 11 10,1 9,9 10,9 Source: UNWTO 2011; WTO 2006; UNWTO 2010; Greek Statistical Authority.

Figure 1: International Tourist Arrivals (millions) Regarding tourism receipts, in 2009 Greece fell to 15th rank behind Hong Kong, Thailand and Malaysia showing a significant decline (-10.6) in 2008 (Bank of Greece 2011). In 2010, our country by generating a revenue of just 12.7 billion dollars has now fallen to 21 st position being surpassed by Singapore, Canada, Switzerland and India (UNWTO 2011; Statistical Annex and World Tourism Barometer 2011).

Table 2: International Tourist Receipts (millions) Rankings Country 2006 2007 2008 2009 2010 1 U.S.A. 85,7 96,7 110 93,9 103,2 2 Spain 51,1 57,6 61,6 53,2 52,5 3 France 46,3 54,3 56,6 49,4 46,6 4 China 33,9 37,2 40,8 39,7 45,8 5 Italy 38,1 42,7 45,7 40,2 38,8 6 Germany 32,8 36 40 34,4 34,7 7 United Kingdom 34,6 38,6 36 30,1 30,4 8 Australia 17,8 22,3 24,8 25,4 30,1 9 Hong Kong 11,6 13,8 15,3 16,5 23 10 Turkey 16,9 18,5 22 21,3 20,8 11 Thailand 13,4 16,7 18,2 15,9 19,8 12 Austria 16,6 18,9 21,6 19,4 18,7 13 Macau 9,8 13,1 16,8 17,9 14 Malaysia 10,4 14 15,3 15,8 17,8 15 Canada 14,6 14,6 15,7 13,7 15,8 16 Switzerland 10,8 12,2 14,4 13,8 14,8 17 India 8,6 10,7 11,8 11,4 14,2 18 Singapore 7,5 9,1 10,7 9,4 14,1 19 Japan 8,5 9,3 10,8 10,3 13,2 20 Netherlands 11,3 13,3 13,3 12,4 13,1 21 Greece 14,3 15,5 17,1 14,5 12,7 Source: UNWTO 2011; WTO 2006; UNWTO 2010; Greek Statistical Authority.

Figure 2: International Tourist Receipts (millions)

Source: UNWTO 2011; WTO 2006; UNWTO 2010; Greek Statistical Authority. Tourism in the competitor countries of the Mediterranean has generally followed an upward trend over the last decade, but not without fluctuations due to political circumstances and crises inflicted on the region. It is worth noting that in countries such as Turkey, Croatia, Slovenia and the countries of the North African region tourism is posting positive figures (UNWTO 2010). It is estimated that the pressure from these competitors will continue in the years to come on condition that they manage to maintain and exploit advantages such as holidays outside the Eurozone, recently created tourism supply, and low cost of tourism services. However, the latest crisis in the countries of North Africa highlight once again that crises constitute the determining factor when deciding and selecting a tourist destination. In regards to the Travel & Tourism Competiveness Index ranking of Greece (World Economic Forum 2008; 2009; 2011), the country is currently ranked 17th in terms of its overall prioritization of Travel & Tourism, compared to 2009 during which the country held the 3rd position. Likewise, Greece is now ranked 82nd in the pillar Policy Rules & Regulations while in 2009 it was 57th. In the individual index Effectiveness of Marketing and Branding, Greece slipped from the 39th place (2009) to the 65th. A decline was also reported in the rankings of Greece concerning the pillars of human, cultural and natural resources. Business environment and infrastructure is another area in which Greece is not placed in a high ranking since to start a business involves high costs. However, the worst performing index, albeit a crucial one, is that of price competitiveness in the tourism industry. Greece ranked 129th out of a total of 139 countries. This means that the prices of tourism services do not meet the expected quality.

Figure 3: Greek Travel and Tourism Competitiveness Index Ranking

Source: World Economic Forum 2008; 2009; 2011

Figure 4: Greek Travel and Tourism Competitiveness Index Score (Scale: 1-7) The poor performance of tourism receipts reflects both the weaknesses of the existing infrastructure, which affects adversely the level of competitiveness in regards to quality, and the decline of competitiveness in relation to prices (Bank of Greece 2008; Annual Report 2009)

The Continued Recession and the Effects of the Crisis

According to the data on arrivals in 2010, Greek tourism, despite international recovery, has not managed to exit the prolonged recession from 2008 onwards. Specifically, in comparison to the same period in 2009, there is a significant stagnation (+0.6%) in the total number of non-resident arrivals at national borders, just exceeding 15 million (ELSTAT 2011). The compensation of the above losses has mainly come from markets with large fluctuations such as Russia, Poland, Israel and Turkey. The main volume of arrivals which come from EU countries is reduced by 68% compared to previous years (74.1% in 2008 and 73% in 2009) (ELSTAT 2011). Forecasts of the past that had predicted that Greek tourism would reach 20 million arrivals by the year 2000 failed to materialize (Jenner & Smith 1993).

Table 3: Total number of foreign tourists in Greece (1990-2010) No. of foreign No. of foreign Year Year tourists tourists 1990 8.873.310 2001 14.057.331 1991 8.036.127 2002 14.179.999 1992 9.331.360 2003 13.969.398 1993 9.412.823 2004 13.312.629

1994 10.641.942 1995 10.130.177 1996 9.233.295 1997 10.070.325 1998 10.916.046 1999 12.164.088 2000 13.095.545 Source: Greek Statistical Authority

2005 2006 2007 2008 2009 2010

14.765.463 16.039.216 16.165.265 15.938.806 14.914.534 15.007.490

Figure 5: Total number of foreign tourists in Greece - Source: Greek Statistical Authority The significant decrease in arrivals from the countries that are the major markets of Greece is the most worrying factor. The share of the 5 main markets of 2008 (United Kingdom, Germany, Italy, France and the Netherlands) plunged 10 %-points, from 50.7% out of the total in 2007 to 40.5% in 2010. In absolute numbers, there was a loss of 2.2 million arrivals from these major markets over a period of 4 years.

Figure 6: Number of foreign tourists by country of origin - Source: Greek Statistical Authority

A similar situation is found in the share of the market pie of air arrivals at national borders. In two years the figures have dropped from 73.4% (2008) to 70.9% (2010).

Figure 7: (%) Change 2010/2009 of the number of foreign arrivals in the main Greek airports - Source: Greek Statistical Authority The number of overnight stays spent in hotels and camping sites by foreign tourists in 2009 was reduced by 2.7% (ELSTAT 2010) due to the economic crisis that hit major European market during that period. On the other hand, in 2008 the effects of the crisis on the domestic market had not become visible since the number of domestic tourists increased by 1.8%.

Figure 8: Number of nights spent in Greek hotels - Source: Greek Statistical Authority Another alarming consequence of the international economic crisis which seems to have become a permanent characteristic is the seasonality of arrivals. In other words, there is a very strong concentration of arrivals during the summer months (June September). It is notable that in 2010 67.3% of the total number of arrivals occurred during the summer months while the corresponding percentages in the years 1995, 2000 and 2005 were 64.4%, 65.1% and 61.2% respectively.

Figure 9: Greek hotels average monthly occupancy (%) - Source: Greek Statistical Authority

Perhaps the most important of all indicators that accurately captures not only the consequences of the economic crisis internationally but also the general image of Greece abroad is that of receipts. According to the Bank of Greece, 2010 was a dire year in terms of tourism receipts in the foreign exchange balance. Specifically, despite the fact that Greece managed to hold on to the number of arrivals, the downward trend in tourism receipts continued and declined even further: from 10.9% in 2009 to -7.56% in 2010. In this same year, there was 785.7 million Euros less revenue compared with the same period in 2009. The Governors 2010 Annual Report attributes this loss of revenue more to the decrease of average daily spending than to the average length of stay of tourists in Greece (Bank of Greece 2011). Table 4: Trade Balance Evolution and Annual Change (%) in Tourism 2001-2009
Receipts Payments Balance Annual Balance Change 2002 10.284,70 2.548,70 7.736 30,50% 2003 9.495,30 2.109 7.386,30 -4,50% 2004 10.347,80 2.310,40 8.037,40 8,80% 2005 10.729,50 2.445,70 8.283,80 3,10% 2006 11.356,70 2.382,80 8.973,90 8,30% 2007 11.319,20 2.485,70 8.833,50 -1,60% 2008 11.635,90 2.485,70 8.833,50 -1,60% 2009 10.400,30 2.424,60 7.975,70 -11,30% 2010 9.614,40 2.177,50 7.436,90 -6,80%

Source: Bank of Greece 2011

Figure 10: Trade Balance Evolution in Tourism 2001-2009

Figure 11: Balance Annual Change in Tourism (%)

Apart from the recession caused by the economic crisis in the Greek tourism product, Greek tourism was also hit hard by the countrys image as a destination. Destination image has an important role in the various models of travel decision making developed to date (Schmoll, 1977; Moutinho, 1984; Woodside & Lysonski, 1989). According to the publicity analysis of 20 major international media which was conducted by Critical Publics from October 2009 to May 2010, there were 40,841 negative references during the economic crisis, the largest part of which included derogatory remarks about Greece. This damaged the image of Greece to a great extent. According to the Greek Minister of Culture and Tourism, another key factor which has contributed to the negative image of the country are the 4 people who lost their lives during the violent demonstrations in May 2010. The economic crisis found the Greek National Tourism Organization owing more than 120,000,000 Euros to foreign and domestic advertising companies and quite understandably such an economic situation cannot allow expenditure for a new campaign. According to the President of the aforementioned organization, these debts have played a major role in the generation of all this negative publicity.

Crisis Management, the Greek case

When interviewed on May 2011, the President of Greek National Tourism Organization explained that, after the tragic events of May 2010 the Minister of Culture and Tourism acted without delay and established a Crisis Management Committee, whose objective is to coordinate actions in order to reverse the negative climate. What ensued was the systematic and coordinated dissemination of information to Foreign Offices in consultation with the Embassies and the Press and Communication Offices of the Secretariat General of Information and Communication abroad and to tourism stakeholders and tour operators. There was an immediate response to every negative publication through our offices abroad. Familiarization trips for foreign journalists were organized in collaboration with institutional stakeholders involved in tourism in order to improve the positive image of our country. These same journalists would then report their experiences to their own media. With the support of national Greek television, promotional material was developed. These included testimonials of foreigners visiting the country and in particular Athens, and talking about their experiences here and now. The promotional action YOUINGREECE YOUINATHENS has been

uploaded on the website of the Greek National Tourism Organization www.visitgreece.gr, supplemented with a great deal of information about the country and especially its high level of security. The informational material of YOUINGREECE is also available on DVDs which have been distributed to all our offices abroad. The executive officers of the Greek National Tourism Organization abroad promptly organized and had meetings with the tour operators and the journalists of the country in which they were appointed so as to promote our informational material. In November of the same year the government took one of the most decisive measures for tourism, that is, the reduction of the VAT for accommodation from 11% or 13% to 6.5%. In regards to the restrictions but also to the subside the effects the economic crisis has brought about, the Prime Minister outlined a new package of measures during the General Assembly of the Association of Greek Tourism Enterprises. These measures are: The Manpower Employment Organization of Greece (OAED) will subsidize social contributions so that 50,000 unemployed people can be re-hired in seasonal hotels from October to April, excluding the period from June to September Removal of cabotage restrictions for cruise ships The programs Green Tourism, Alternative Tourism, Cooperate and Innovate, and Upgrade in Tourism will come into effect with the support of the NSRF. A new spatial framework for tourism taking into account the model of vacation homes and condominiums Visa costs reductions for tourists from new, dynamic and emerging markets, such as Russia, Ukraine and Belarus The liberalization of the ground handling market at all Greek airports The exemption of landing and parking fees for aircraft at all Greek airports, with the exception of Athens International. These measures apply to this summer, with a 50% exemption due to be applied for the winter months. Nevertheless as it has already been mentioned, the crisis that has hit Greek tourism is deeper and it is mainly because of the lack of strategic planning at the policy level. A number of proposed strategic options and actions so that the country can exit the crisis are presented below.

Exit Strategies from the Crisis

In the past a large number of studies have discussed the crucial role of Greek tourism as well as the strategies that this sector should use to lead the country out of the crisis. Many organizations such as the European Commission, the Greek National Tourism Organization, the Association of Greek Tourism Enterprises, the Hellenic Federation of Enterprises, the Hellenic Chamber of Hotels and research institutions such as the Research Institute for Tourism have frequently pointed out the role of tourism and strategies for a way out of the crisis. The purpose of this paper is to provide a survey of the research literature so as to describe the major strategies that should be undertaken and which will give Greek tourism again its comparative advantage. In this context, the opinions of organizations, crucial to Greek tourism, will also be presented.

International Experience: Turkey as an example

According to ELSTAT 1991 year data, 8,036,000 tourists arrived in Greece. In the same year, Turkey received 5,517,897 visitors, albeit being a country just entering the tourism sector. This was during the same period when Turkey was experiencing an economic crisis and was under the supervision of the IMF.

In 2003, arrivals in Greece increased modestly by reaching 13,900,000 visitors. For the neighbor country, 2003 was a landmark year since Turkey received 14,029,000 tourists surpassing Greece which had already entered into recession. Similar growth rates were recorded in regards to tourism revenues. In 2003, the revenue of Greece was 9,460,100 Euros, decreasing from the 2002 figure of 10,579,900 Euros, while Turkey posted revenues of 11,611,200 Euros. According to the finding of the working group of the , Turkeys model is an example of longterm tourism policy as the country has already set out and is implementing a specific strategic plan for Turkey 2023. Among the main objectives of the 2023 Tourism Strategy are for Turkey to ensure 65 million visitors and 85 billion Euros revenue and to become one of the top five tourism destinations of the world. The Turkish Ministry of Culture and Tourism for some time now has a consolidated organizational chart. There are four General Directorates under the Deputy Minister: a. The General Directorate of Investments and Establishments b. The General Directorate of Research, Education and Cultural Heritage (Education General Management, Cultural Heritage and Museums General Management, Financial Services Funding) c. The General Directorate of Culture as an independent area of action (Fine Arts, and Cinema, State Theatres and State Opera Ballet d. The General Directorate of Culture Tourism (Libraries, Publications, National Libraries, International Relations, EU issues) The recent consolidation of the sectors of tourism and culture which is also expressed in the aforementioned organizational chart confirms the strategic choice of cultural tourism as a major objective of Turkish policies for the last 10 years. Prioritizing the promotion of religious tourism is another such objective (specialized promotional material, posters, an annually organized conference, etc.). The region of Cappadocia which has been experiencing rapid growth in recent years is particularly being promoted. Of course, the designation of Konstantinopole as European Capital of Culture in 2010 gave the city a chance to showcase itself. In Greece, on the other hand, not only has the merger between Culture and Tourism not brought about any changes but it has actually hindered many actions (Ministry of Culture and Tourism 2010). All supervisory issues concerning tourism facilities, i.e., specifications, classifications, etc. are carried out by the respective associations (TUROB is the hotel association and TURSAB the one for tourist agencies). The formation of the national tourism strategy is the responsibility of an office which is accountable to the Deputy Minister. Investments are of great importance. There is a General Directorate which includes a General Management Office and two individual ones that are responsible for investments. According to the Greek Embassy, the incentives for tourism investment in Turkey include state land allocation on a 49-year lease base, VAT exemption on machinery and equipment and in certain cases tax exemption on imported goods. Furthermore, hotel enterprises that generate more than 1 million dollars in foreign exchange earnings are treated as exporters. Moreover, since 2008 the VAT on accommodation has dropped from 18% to 8% while there is provision to facilitate the lending capacity of businesses (GEPOET, 2010). It is worth noting that the positions of both Minister of Culture and Tourism and President of TURSAB have been occupied by the same individuals since 2007. At the same time, in last 18 years 48 different individuals have exercised the political leadership of Greek tourism, with an average tenure of less than 5 months (SETE, 2010). The objective of Turkeys advertisement campaign is to promote Turkey through destination marketing approach, when world tourism market accelerates and travel dates are set. It is also

important to reach the following marketing and communications goals throughout the tender proposals (Ministry of Culture and Tourism, 2010)

Marketing Goals:
Expanding Turkey's market share in main markets, preserving share in the mature markets, and increasing the share in the developing markets. Increasing the total number of visitors by 6% and the revenue by 8% under normal circumstances. Increasing the percentage of the number of tourists with high income levels. Increasing tourists individual spending and the duration of stay. Expanding the demand for tourism to 12 months by decreasing the impact of seasonality. Increasing the share of culture, golf, congress, yacht, city, youth, health and eco tourism. Ensuring a balanced distribution of tourism to Turkey's different regions

Communication goals:
To position Turkey as a positive and well known touristic destination To increase awareness for natural richness and historical places of Turkey through destination promotion and marketing approach. To emphasize the variety and harmony of Turkeys touristic products To position Turkey and destinations such as Istanbul as an important alternative for short breaks (Easter, Christmas, New Years Eve, school holidays etc.) To promote the international sports activities, cultural and artistic events taking place in Turkey To cherish friendly and welcoming human factor with slices of life in the campaign visuals.

Research Studies
There is no doubt that the problem of Greek tourism is primarily a lack of strategy and long term policies. Porter (1985:1) suggests that competitive strategy is the search for a favourable competitive position in an industry, which is a function of the attractiveness of the industry and the relative competitive position within that particular industry. In the literature, there are extensive references which explore the problem that Greek tourism is facing as well as the proposed solutions. Indicatively we can mention Zacharatos, 1984, 1986; Komilis, 1987; Loukissas, 1977; Papadimitris, 1988; Papadopoulos, 1985; Moore, 1992; Tsartas, 1989; Velissariou, 1991; Fotis, 1992; Buhalis, 1991, 1995, 2000c, Buhalis & Diamantis, 2000. According to Josephides, a depolitisation of Greek tourism, towards a professionally managed public sector, guided through a compromised strategic Master Plan is urgently required (Josephides, 1995). Smeral at his article The Impact of the Financial and Economic Crisis on European refers generally at a series of strategic option to fend off the recession on tourism demand. Cutting down on marketing expenditure is counterproductive and will only enhance the crisis. The impact of marketing budgets can be enhanced by intensive cooperation. Intense attention to local markets (not just for overnight stays but also for day trips) is a realistic way of mitigating the consequences of demand lacks. In times of crisis, demand for all-inclusive packages rises, which should be greatly varied in terms of duration and quality levels. Guests should not be forced to

 undergo long-term pre-booking processes. Shorterm flexibility provides a competitive advantage. Repeat visitors know their holiday region and are an ideal segment to lavish care and attention on in order to alleviate a slowdown. The more transparent the offer the more will guests know what to expect in terms of costs. Prices should be maintained as much as possible and the level shored up by additional temporary special offers. Innovations and new product interpretations always help gain new customers. Phases of very low demand are a good opportunity to carry out internal structural reforms and apply new concepts. Resistance to technological and organisational innovations is easier to overcome. Strengthening staff motivation improves an operations service quality and increases customer satisfaction, which is a major measure to improve its competitive position. Identifying potential cost savings provides some leeway for demand-creating measures and necessary investments. (Smeral 2009) By adopting the European Charter for Small Enterprises in June 2000, the State Members recognized that small and medium enterprises must be considered as a main driver for innovation, employment as well as social and local integration in Europe. This is particularly applicable in the sector of tourism all around Europe and obviously in Greece. The first to put forward a new developmental model of Greece is the renowned Harvard University professor Michael E. Porter who in May 2003 and upon an invitation by the Greek government presented his essay: The Competitive Advantage of Greece: Moving to the Next Level. The model that Porter suggests so that Greece can gain a competitive advantage is that of clusters. A cluster is defined as a geographic concentration of interconnected businesses and associated institutions in a particular field linked by common technologies and skills. They normally exist within a geographic area where ease of communication, logistics and personal interaction is possible. Clusters are normally concentrated in regions and sometimes in a single town. (Porter 1990). Tourism, in particular, is a sector where the strengthening of the relationships (clusters) among local tourism service companies, producers and standardization businesses, and their partnerships with other sectors, such as culture, becomes a centralized policy The Italian region of Prato or Montana are exemplary in this respect (Montana 2003). Buhalis suggests that Greek tourism and SMTEs need to focus towards the differentiation strategy, define their niche markets and serve them accordingly. This strategy is already adopted in several resort areas, such as Valencia in Spain, where it is recognised that the need for differentiation has now become essential owing to the level of competitiveness that has been attained (and can be foreseen) in the world tourist market (Fayos-Sola 1992). Differentiation is also particularly useful for insular destinations in microstates, where a limited number of economic and financial resources are available (Wilkinson 1989) .As most destinations consist of SMTEs, networks, there is an overlap between their strategic orientations, and therefore the above analysis is applicable to both the Greek tourism industry and SMTEs. Buhalis (2001) also proposes that all Greek resorts and SMTEs should assess their assets and strengths for serving specific target markets, taking advantage of their small size which facilitates flexibility and specialisation. According to Buhalis, there are 3 strategic dimensions for Greek tourism such as: 1. Enhance the satisfaction of tourists and delight the customer;

2. Strengthen the long-term profitability and competitiveness of Greek tourism and SMTEs; 3. Develop Greek destinations sustainably, and ensure prosperity of host population Buhalis further specifies his strategic dimensions into goals and actions.

1. Enhance the satisfaction of tourists and delight the customer

1.1 Improvement of services a. Standardisation of service delivery b. Development of quality control systems c. Consistency of promises d. Improvements in operational management e. Flexibility in services delivery f. Training and education improvements g. Smile and personal relationships h. Augmentation of tourism product i. Total quality management 1.2 Specialisation of tourism product a. Niche marketing b. Lifestyle targeting 1.3 Value for money a. Quality at each price level

2. Strengthen the long-term competitiveness and profitability of Greek tourism and SMTEs
2.1 Increase revenue a. Increase tourist volumes b. Target new markets and penetration in existing markets c. Use yield management d. Expand distribution channel mix e. Aggressive marketing f. Achieve high average spending per customer g. Select high-quality specialised tour operators h. Attract alternative types of tourism i. Use alternative distribution channels j. Motivate front-of-house employees as salesmen 2.2 Cost control and rational management a. Standardize service delivery b. Increase productivity c. Reduce labor costs d. Rationalize supplies management e. Education/training for managers and employees f. Use of new technology g. Integrate service delivery within SMTEs 2.3 Human resources management a. Internal marketing b. Empowerment c. Satisfactory salary and working conditions d. Long-term relations with employees e. Motivation and rewards 2.4 State and public tourism organisation support a. Destination development and control b. Incentives policies for improvement c. Attract European Union assistance d. Promotional activity

e. Provide financial resources

3. Develop Greek destinations sustainably, and ensure prosperity of host population

3.1 Environmental protection a. Carrying capacity identification b. Zoning system application c. Architecture preservation d. Installation of sewage treatment systems e. Reduction of noise pollution f. Natural supplies management 3.2 Infrastructure amelioration a. Accessibility improvements b. Telecommunication improvements c. Public facilities advancements 3.3 Transportation improvements a. Improvement of local timetables b. Punctuality and reliability c. Improvements of vehicles d. Flexibility to meet demand needs 3.4 Economic integration a. Integration with raw material production b. Utilization of local labor force c. Integration of tourism services d. Diagonal integration of destinations economy 3.5 Equitable return on resources utilized a. Establish mechanism for reinvestments b. Provide services for host community c. Invest in sustainability of resources d. Ensure equity in distribution of wealth produced Source: Adapted from Buhalis 2001: 470.

Proposals by Tourism Organizations and Stakeholders

For a long time, the scope of action of collective organizations in the tourism sector was characterized by overlapping. It is now deemed necessary for these organizations to collaborate but more importantly, to mark out their area of responsibility in order to protect their own interests. If and when needed, they should also be ready to undertake joint actions.

The Association of Greek Tourism Enterprises (SETE)

From 1994 until today, the Association of Greek Tourism Enterprises has been in the lead providing specialized studies and reports. This sectoral association is also a participant of the Economic and Social Council of Greece. In the latest and most comprehensive report of the Association of Greek Tourism Enterprises for the new development model for Greece 2020, the proposals put forward aim to render tourism the major player in the economic and social development of Greece. The areas of intervention as well as the implementation of individual actions are concisely presented below. Organizational and Institutional Reforms

1. It is the responsibility of the government and the wider public sector to establish an independent Ministry of Tourism as well as a Tourism Secretariat in co-competent ministries. This will allow consent of all political parties in regards to tourism and its policies in force. It is also suggested that there be a close cooperation with the regions of the country so that fragmentation of actions is avoided 2. At the level of the private sector a partnership of organizations in the form of a Destination Management Organization (DMO) for each of the 7 regions is proposed. The DMOs will include a team of experts, i.e., a think tank. 3. Distribution networks and their collaboration with tour operators should be approached in a more professional way. Internet technology, marketing companies and alliances with airline companies are ways to increase their effectiveness and reduce their dependence on these networks. 4. The Association of Greek Tourism Enterprises has always considered the establishment of a marketing company as one of the main requirements of a long term promotion policy which will not be marred by political interventions and mishaps. The government has already agreed upon the establishment of such a marketing organization in which private stakeholders and the public sector participate by 70% and 30% respectively. 5. The Internet presence of Greece is one of the top priorities set by the Association of Greek Tourism Enterprises. 6. Another area of intervention is the alliance with airline companies since they constitute part of the supply chain of the tourism product. The destination should participate in the business risk which is involved in every effort to commence a new airline connection and attract common demand for the airline carriers, especially low budget ones. 7. Outward orientation and influential networks of international organizations are other important areas which require reforms. 8. Building/creating a brand which will not change at the whim of whichever political administration happens to be in power, but will express the long term tourism policies and the sectors involved in tourism.(SETE 2010) Management and Orientation of Tourism Supply It is emphatically noted that there is an excessive supply of beds which is over 30% of the countrys bed capacity and that there is a need to reduce the gap between expectations and value for money. The report proposes that all hotels are degraded ranking key and rated by tour operators instead of the Greek National Tourism Organization. The main directions of the development of tourism supply policies are directed towards special land use, the exemption of tourist congested areas from subsidized policies, which is not the case with the last development policy and the withdrawal of aged accommodation. Any approach towards specialized forms of tourism should be the outcome of detailed planning (segmentation of demand, etc.). The approach should also be intersectoral by developing synergies with other compatible sectors of development.(SETE 2010) Approaching and Managing Tourism Demand The main objective is to create structures and a marketing culture by analyzing each market in relation to their quantitative and qualitative characteristics. Actions should be implemented to reduce seasonality aiming at an all year round tourist season. Prerequisites of success are the management of demand until today and the analysis of the profile of tomorrows travelers. (SETE 2010)

The Hellenic Chamber of Hotels

The Hellenic Chamber of Hotels has every so often put forward proposals and has intervened in the sector of tourism as an official advisor of the state. Its strategic decisions which are set as priorities for hotel businesses are the following: Responding to the economic crisis with the least possible loss for the sector The tourism sector embraces all aspects of society Small and medium enterprises of the sector take full advantage of digital technology Focus on standardization and branding of hotel services Promotion of the protection of the environment as an underlying theme of the actions of the Hellenic Chamber of Hotels Respectively, the Research Institute for Tourism has constantly presented the requirements which will increase the competitiveness of Greek tourism. According to Patsouratis, the strategic objectives and the measures that have been proposed to a large extent do not cater for the aforementioned. The general strategic objectives that should be implemented instead are: 1. Improvement of the quality of the offered services across all the chain of the tourism sector 2. Promotion of cultural heritage enriching and enhancing the dominant model of sun and sea 3. Reduction of seasonality 4. Development and implementation of an integrated tourism policy for all the country so that new areas can emerge (Patsouratis, 2002, The Competitiveness of the Greek Sector) For each of the above strategic objectives, he suggests a number of measures. Infrastructure Measures Regarding the public sector, ports, airports, public transportation and others should be upgraded. Privately owned accommodation could be upgraded by implementing subsidized policies. The elongation of the tourist season could be supported and facilitated by the development of new forms of tourism while in order to enhance the tourism product the establishment of facilities such as golf courses, marinas, etc. is required after having conducted detailed study and planning (Patsouratis, 2002). Measures regarding the education and training of human resources Increasing the size of accommodation to create scale economies, to lower the costs and to increase competitiveness (Patsouratis, 2002) uses the example of Spain which developed large scale hotels and resorts. Stricter guidelines for the hotel rating system and measures to combat illegal lodgings More rigid controls in relation to the private and public transportation of tourists There is extensive discussion to support specialized forms of tourism such as cultural, marine (yachting), conference, etc. which are based on the experience of the tourist. In regards to the promotion actions and policies, the todays informed customer requires constant updating of the global market and a respective adaptation of products and services. There is also emphatic reference to the reduction of the Value Added Tax in all services of the tourism sector. Finally, the role of tour operators and the collaboration with them is stressed, especially in countries like the UK, Germany, and the Scandinavian ones where an oligopoly exists with a

high level of concentration. Generally speaking, there is a need to strengthen the synergies with all parties involved in the sector of tourism: ministries, general secretariats, the Greek National Tourism Organization and private stakeholders (Patsouratis, 2002). According to McKinsey & Company, by 2021, and the research Greece made on behalf of SEV 10 Years Ahead the annual GVA could increase (vs. 2010) by approximately 18 billion and employment could increase by approximately 220,000 jobs. The positive impact on Greeces trade and fiscal balance could reach approximately 9 and approximately 3 billion respectively. Greece 10 Years Ahead synthesizes 13 possible priorities for tourism grouped into four strategic themes: Re-defining and re-focusing Greeces commercial strategy. Greek tourism needs to focus its source market targeting, aiming to maintain market share in core European markets (Top Tier: Germany, UK, Scandinavia; Tier 1: Italy, France, Netherlands), while achieving a meaningful penetration in emerging (Russia and China) and long-haul (USA) markets. Developing a network of large integrated resorts (15-20) and vacation homes (approximately 50,000), and establishing Athens and Thessaloniki as attractive City Break destinations Developing quality infrastructure while accelerating investments. This involves investments in 2-3 larger-scale conference centers in Athens and Thessaloniki, as well as the development of the necessary infrastructure to support nautical tourism, especially marinas (to reach 60-65 from 32 today) and 3-4 cruise ship-friendly embarkation ports Facilitating access and transportation. Greece needs to actively promote better connectivity with emerging and long-haul markets by attracting more direct flights from these source markets, as well as lowering entry barriers (facilitating Schengen Visa processes) and airport charges. Revamping Greeces Tourism capabilities and know-how. Greece needs a distinctive Tourism University degree with strong international links. (Mc Kinsey 2011)

EU Strategy: The priorities of the European Union for tourism within the Europe 2020 strategy
The entry into force of the Treaty of Lisbon represents a landmark for tourism, a key economic sector of the EU, which notably contributes to the EU GDP and generates jobs and wealth in the Member States. The Lisbon Treaty acknowledges the importance of tourism outlining, for the first time, a specific competence for the European Union in this field and allowing for decisions to be taken by qualified majority (Title XXII Tourism, Art. 195). The Lisbon Treaty foresees in its article 195a) and b) the possibility for the Union to complement the action of the Member States in the tourism sector, in particular by promoting the competitiveness of Union undertakings in that sector. In a recent Communication from the European Commission, in which a new political framework is proposed so that Europe remains the world's No 1 destination, four priorities are put forward (Commission to the European Parliament 2010): 1. Stimulate competitiveness in the European tourism sector by Promoting diversification of the supply of tourist services Developing innovation in the tourism industry Improving professional skills Encouraging an extension of the tourist season

 Consolidating the socioeconomic knowledge base for tourism 2. Promote the development of sustainable, responsible and high-quality tourism 3. Consolidate the image and profile of Europe as a collection of sustainable and high quality destinations 4. Maximize the potential of EU financial policies and instruments for developing tourism. These four priorities provide the skeleton for a new action framework for tourism which the Commission intends to implement in close cooperation with the Member States and the principal operators in the tourism industry. The objective is to include the sector of tourism in the new strategy that the EU has developed for Europe 2020. The development of tourism in Greece should be adapted to agree with the four priorities mentioned above. This would allow European policies to be implemented in the sector and Greece to be included in the network of European destinations.

The perspective of the Greek National Tourism Organization

When interviewed on May 2011, the President of Greek National Tourism Organization explained that, the non-existence of a long term tourism policy is the major disadvantage of Greek tourism. The areas in which the realization of a long term tourism policy would be of real interest are those of promotion and sustainable management of our tourism capital. According to the President, new tourism policy of the Greek National Tourism Organization is adapted to the need to reverse the negative situation by redefining and improving the quality of tourism supply as well as repositioning the Greek tourism product in the markets within a competitive context. At the same time, we should take into account the other structural weaknesses that the crisis revealed and call for a long term tourism policy to be set out by the central administration. The new tourism model, that is promoted today, highlights actions that are compatible with green (eco) tourism development, integrate environmental technology and practices in tourism enterprises and develop alternative forms of tourism. The strengthening of the link between tourism and the other economic sectors should also be encouraged. This will be achieved by policies that ensure sustainable development. These policies involve specialized forms of tourism, the elongation of the tourist season in all regions of Greece in order to disperse tourists from congested areas and the differentiation of the tourism product by upgrading its quality. The growing number of arrivals as well as the changing profile of modern travelers both contributes to a shift of the tourism paradigm toward a new model, based on comparative advantages and the processes of enrichment and differentiation of the tourism product. Furthermore, the complexity of legal and bureaucratic directives related to tourism, the multitude of legal procedures, and the overlapping authority of different governmental structures are the main problems present in todays investment reality. These impediments are directly addressed in the new strategic choices of tourism development. The cornerstone of our investment strategy relies on (a) a green tourism development model, (b) product differentiation and, (c) curbing bureaucracy The end goal of the tourism strategy is the improvement of services, the reinforcement of competitiveness, the reduction of seasonality and the elongation of the tourist season, and finally the attraction of eco-friendly large investments in the field of tourism.

The new tourism policy will encourage the link between tourism and other clusters of economic activity, by investing in a sustainable tourism development model through innovation and differentiation. These priorities are expected to materialize with the development of special forms of tourism and the extension of the touristic season throughout the country, the goal being the revitalization of already well-mature destinations as well as the differentiation of our touristic product through a legitimate, qualitative upgrade of services offered. According to the President of the GNTO, the action plan on tourism is based on a peripheral strategy that meets specific criteria such as: total quality frameworks, energy saving, waste reduction, and re-established competitiveness. Finally, he states that the objective of the organization is to shape a new marketing model of promoting the Greek National Tourism Organization which will essentially be based on new Internet technologies, mobile phone applications and social media.

Conclusion
It is generally acknowledged that the way out of the crisis will be difficult but tourism has the potential and can become the propelling force. This study discussed strategic plans which, despite their different perspectives, converge to a large extent. What is required and what is common ground of all proposals is that tourism and tourism policies should become of the political and social consensus of the country. Long-term tourism policy and its unhindered implementation is a one way street. Tourism must become the focal point of all common efforts.

References
Bank of Greece, (2009), Annual Report for 2008 (in Greek), Athens, Bank of Greece. Bank of Greece, (2011), Bulletin of Conjunctural Indicators (in Greek), No.135, Dec. -Jan, Athens, Bank of Greece. Buhalis, D., (2001), Tourism in Greece: Strategic Analysis and Challenges, Current Issues in Tourism, 4, University of Surrey, pp. 440-480. Clusters of Creativity: Innovation and Growth in Montana, The Experience Enterprise and Tourism Cluster, (2003) COM, (2010) Communication from the Commission to the European Parliament, the Council, The European Economic and Social Committee and the Committee of the Regions, COM, 352, 30.06, pp.7 Fayos-Sola, E., (1992), A Strategic Outlook for Regional Tourism Policy: The White Paper on Valencian Tourism, Tourism Management, 13, pp. 459. Fotis, J., (1992), Vacational lifestyle segmentation of tourists on the island of Rhodes, Greece, MSc Dissertation, University of Surrey, Guildford. Hellenic Statistical Authority, Press Release (in Greek), 21 September 2010, Hellenic Statistical Authority. Josephides, N., (1995), A sorry state for beautiful Greece, Travel Weekly 1261 (5 April), p. 11. Komilis, P., (1987), Spatial analysis of tourism in Greece (in Greek), Athens, Centre of Planning and Economic Research.

Loukissas, P., (1982), Tourisms regional development impacts: A comparative analysis of the Greek islands, Annals of Tourism Research, 9, pp. 52343. McKinsey & Company Athens Office, (2011) Greece 10 Years Ahead- Defining Greeces new growth model and strategy, Executive summary, September . Ministry of Culture and Tourism, Articles and Conditions on 2010 advertising campaign communication / marketing strategies, Ministry of Culture and Tourism, Republic of Turkey. Moore, R., (1992), From shepherds to shopkeepers: The development of tourism in a central Greek town, PhD Dissertation, University of California at Berkeley, USA. Moutinho, L., (1984), Vacation tourist decision process, Quarterly Review of Marketing (UK), 9 (April), pp. 8-17. Papadimitris, G., (1988), Short run and long run prospects of the Greek tourism industry, PhD Dissertation, University of Manchester, Manchester. Papadopoulos, S., (1989), Greek marketing strategies in the Europe tourism market, Service Industries Journal, 9, pp. 297314. Papadopoulos, S. and Mirza H., (1985), Foreign tourism in Greece: An economic analysis, Tourism Management, 6, pp. 12537. Papandropoulos, A., (1995), The crisis in tourism is evident (in Greek), Oikonomikos Tachydromos (29 June), p. 268. Patsouratis, V., (2002), The Competitiveness of the Greek Sector, ITEP. Porter, M., (2003), The Competitive Advantage of Greece: Moving to the Next Level, Harvard Business School. Porter, M., (1985), Competitive Advantage: Creating and Sustaining Superior Performance, New York, Free Press. Porter, M., (1990), The Competitive Advantage of Nations, New York, Free Press. Schmoll, G.A., (1977), Tourism promotion, London, Tourism International Press.

SETE (2010), Towards 2020: comment on the new development model

Smeral, ., (2009), The Impact of the Financial and Economic Crisis on European, Tourism Journal of Travel Research, 48: 3, originally published online. Tsartas, P., (1989), Socioeconomic Impacts of Tourism Development in Cyclades Region with Special Reference on Ios and Serifos Islands during 19501980 (in Greek), Athens, National Centre for Social Research. UNWTO, (2010), World Tourism Barometer, Vol. 8, No 2, June. UNWTO, (2010), World Tourism Barometer, Vol.8, no 3, October. UNWTO, (2011), World Tourism Barometer, Vol.9, No 1, February, Statistical Annex. UNWTO, (2011), World Tourism Barometer, Vol. 9, interim update April. Velissariou, E., (1991), Die Wirtschaftlichen Effekte des Tourismus Dargestell am Beispiel Kretas (The Economic Impacts of Tourism on Crete), PhD Dissertation, University of Munich. Frankfurt: Peter Lang. Woodside, A.G., & Lysonski, S., (1989), A general model of traveller destination choice, Journal of Travel Research, 17(4) (Spring), pp. 8-14. World Economic Forum, The Travel & Tourism Competitiveness Report (2008).

World Economic Forum, The Travel & Tourism Competitiveness Report (2009). World Economic Forum, The Travel & Tourism Competitiveness Report (2011). Zacharatos, G., (1984), Tourismus und Wirtschafts-Struktur. Dargestellt am Beispiel Griechenlands, Europaische Hochschulschriften, Reihex, Band 7, Frankfurt am Main. Zacharatos, G., (1986), Tourism consumption (in Greek), Athens, Centre of Planning and Economic Research.