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rfmcdonaldA Tyler Cowen post at Marginal Revolution let me know that many people in the new Greek government have a problem with the all-inclusive tourist packages that play such a major role in Greece's highly tourism-dependent economy. From The New York Times' Danny Hakim and Aggelos Petropoulosjan:
A more recent Reuters article suggests that many of the initial fears were overblown, that the Syriza-led government would instead like to incorporate more local Greek businesses into the package tours.
I know little enough about the nature of the Greek tourist economy. I do think that trying to maximize tourist revenue is a very good idea, one way in which a hard-pressed Greece can accumulate money. I also wonder about the extent to which the all-inclusive deals at present can be expanded into more expensive trips. Mediterranean tourism in Europe, as I understand it, often involves the creation of self-enclosed tourist enclaves: compare Britons and Germans in Spain, for instance. People on all-inclusive package tours may well not want to engage more with local businesses: they might just want sun and sand and the rest of it.
By trying to include more Greek businesses, and by trying to increase the spending of visiting tourists, there is a considerable risk of Greece pricing itself out of its market. Why spend more money to do things a tourist might not want to do at all, especially when there are other alternatives? (Mr. Phillips quoted in the article mentioned Turkey.) It goes without saying that the new Greek government will have to be very careful.
David Phillips has been vacationing for over a decade at the Electra Palace Hotel on the island of Rhodes.
Everything is included. There is Chinese, Italian or Greek food. There is an endless supply of ouzo, beer and Greek wines. He can even bundle the cost of his flight as part of the package.
“I like to go somewhere a week or 10 days and not worry about where I’m going to get my next meal,” said Mr. Phillips, 52, a civil servant from South Wales, adding that he wanted “to have quiet time where I have no worries at all.”
[. . .]
The Syriza party, the upstart leftist coalition that is leading in the polls ahead of the Greek election on Jan. 25, disdains such “all-inclusive” deals as keeping tourists penned up in resorts and away from local businesses and attractions. It has proposed to limit them if it is elected. In fact, both of the top parties in the campaign are unnerving the tourism industry with proposals that would crimp hotels and resorts, even as the business has been a rare bright spot for the anemic Greek economy.
A more recent Reuters article suggests that many of the initial fears were overblown, that the Syriza-led government would instead like to incorporate more local Greek businesses into the package tours.
"There won't be any action against all-inclusive holidays," Elena Kountoura, from the right-wing Independent Greeks party in Tsipras's coalition, told reporters.
"On the contrary, further upgrading the quality of these packages will boost and extend benefits in local markets and communities."
All-inclusive deals that limit added food and bar expenses for vacationers are especially popular among the millions of foreigners who flock to Greece's islands each year. Tourism employs one in five Greeks and accounts for a fifth of the economy.
Some in the industry, including the head of Greece's tourism association Andreas Andreadis, have proposed more flexible models which could tie local restaurants and bars into the package to spread the benefits.
I know little enough about the nature of the Greek tourist economy. I do think that trying to maximize tourist revenue is a very good idea, one way in which a hard-pressed Greece can accumulate money. I also wonder about the extent to which the all-inclusive deals at present can be expanded into more expensive trips. Mediterranean tourism in Europe, as I understand it, often involves the creation of self-enclosed tourist enclaves: compare Britons and Germans in Spain, for instance. People on all-inclusive package tours may well not want to engage more with local businesses: they might just want sun and sand and the rest of it.
By trying to include more Greek businesses, and by trying to increase the spending of visiting tourists, there is a considerable risk of Greece pricing itself out of its market. Why spend more money to do things a tourist might not want to do at all, especially when there are other alternatives? (Mr. Phillips quoted in the article mentioned Turkey.) It goes without saying that the new Greek government will have to be very careful.
