Greece's debt-laden economy cannot count on tourism to dig it out of recession this year, with the industry forecasting at best minimal growth and at worst a further decline after a deep slump in 2009.
Blessed with sun-drenched beaches, paradise islands and stunning monuments, Greece drew some 15 million foreign tourists a year before the global economic crisis struck.
Tourism employs one Greek in five and accounts for about 20 percent of the 250-billion-euro ($341.3 billion) economy, making it critical for recovery from the first recession in 16 years.
"The year 2010 will be quite difficult for tourist businesses," said Argiro Fili, president of the Hellenic Association of Travel and Tourist Agencies. "We will all again depend on last minute bookings and low prices." Revenue from foreign tourists fell by nearly 11 percent in the 11 months to November 2009, central bank data showed, pushed down by recession in Europe and the United States, competition from cheaper nearby destinations, and social unrest in Greece.
"Early bookings from the key British and German markets … are a bit down even compared to 2009," said Andreas Andreadis, head of the Hellenic Hotel Federation.
Asked to forecast 2010 tourism revenues, he said: "It will play between minus 5 percent and plus 5 percent."
Greece's Touristic Research Institute predicts revenue will keep falling despite a 2-3 percent rebound in arrivals.
"It's a very uncertain, very volatile situation," Andreadis told Reuters, saying the euro-dollar exchange rate and last-minute Internet bookings would be decisive.
A cheaper euro is good news for Greek tourism. But headlines around the world about the country's debt crisis and strikes against austerity measures are bad for business.
"It is not good to be in the news every day with negative messages," Andreadis said.
PRICES
The mood is grim among hotel managers and shop owners.
"People pass by and look at the window, then they come in but they don't buy," said Nikolaos Vousouras, 70, a tourist shop manager near Athens' central Syntagma Square. "This year will be like 2009, with reduced revenues."
Others said they did not expect much of a rebound despite signs of a global recovery. "We just hope we won't have losses," said 39-year-old Ismini Panayotopoulou who runs Pan Hotel, a 33-room, 3-star.
The U.N. World Tourism Organisation (UNWTO) has forecast a small rebound in global tourism this year as many countries exit recession, but said Europe would be the slowest to recover.
John Kester, chief of market trends at the UNWTO, said British tourists were expected to travel somewhat more, which was good news for Greece.
But faced with competition from cheaper destinations such as Turkey and Croatia, Greece needs to do more than work on prices. "They can't base products on low price," he said. "They have to sell good value for money."
