Greece 10 Years From Now - A Growth Model With Half a Million New Jobs!

Coat of arms of Greece since 7 June 1975. (Photo credit: Wikipedia)

"Greece 10 years ahead" (GTYA) is the title of a study published by the Athens Office of McKinsey in mid-2011. It outlines a National Growth Model which, the study predicts, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. The study focuses on growth opportunities in 5 major 'production sectors' which are already of prime importance to the Greek economy and on 8 'rising stars', i. e. new sectors where present activity is still small but where significant potential can be expected. In this post, I will focus on the 'production sector' of tourism (page 39 in the GTYA-report).

Production Sector --- Tourism

GTYA states that Greek tourism is not at all the success story which one might be tempted to believe. Since that sector makes up, directly and indirectly, about 15% of Greece's GDP, one might as well start there instead of getting lost in other details.

Since the Euro, Greek tourism was much more a function of the artificial - debt-financed - domestic demand than of international competitiveness. GTYA states that 70% of Greek tourism has been driven by domestic demand with only limited success in new markets like Russia and China. The tourist season is concentrated too much in the summer months (52% of arrivals in Q3) and tourists spend relatively less money in Greece than in Italy or Turkey (146 €/day in Greece versus 200 €/day in Italy and 162 €/day in Turkey). GTYA recommends to:

• * systematically develop core and mature markets while improving the mass-affluent mix
• * upgrade and selectively expand the product portfolio (items: upgrade from 'sun & beach' to 'value for money'; develop 'City Break' themes in Athens/Thessaloniki with global events; 'sailing & yachting themes' to increase embarkation rate; develop network of 'vacation homes'; etc.)
• * deepen destination marketing sophistication while bringing Greece's brand 'back-to-basics'
• * introduce multi-channel platforms for a distinctive pre-visit experience
• * revamp toursim zoning and planning legislation
• * upgrade 3-4 ports for cruise embarkations; build 30-35 marinas; investigate regional airport expansions
• * upgrade cultural sites' infrastructure; develop 2-3 major new conference facilities
• * leverage 'fast-track' framework to accelerate tourism investments
• * increase flight connnectivity with US, Russia and China
• * re-plan and re-schedule capacity, connectivity and quality/cost for island transportation; consider hubs
• * review pricing at access points against demand elasticity
• * build a University Department for Tourism Studies (bachelor and master)
• * improve Central Sector planning and management capabilities

A lot of work to be done? Heck, yes!

A lot of money needed? Heck, yes!

Where will the money come from? Well, we have come a long way to reach the point of even asking this question. In a market-economy, investment money comes from private investors. Private investors will bring that money if there is an attractive business framework and the prospect of earning a decent return on the investment.

That, of course, points to the overall challenge of Greece --- to become an attractive place to do business!

Source - klauskastner