A proposal by main opposition Syriza, the leftist coalition that is leading in the polls ahead of the Greek election on Jan. 25, to limit the "all-inclusive" deals in tourism has alarmed both industry officials and tourists, the New York Times reported on Wednesday.
Syriza disdains the 'all-inclusive' deals, arguing it keeps tourists penned up in resorts and away from local businesses and attractions and has proposed to limit them if it is elected, the article titled "Greek Left’s New Issue: All-Inclusive Resorts" says.
In fact, the NYT argue, 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."
"The tourism proposals reflect the broader tumult and uncertainty of Greece as it heads into the election coping with a financial crisis that rivals the Great Depression. The uncertainty has global financial markets hanging on the outcome of the election and what it means for the future of Greece and the European Union."
The travel industry may not emerge unscathed in any electoral outcome, the article continues. In addition to Syriza’s threat to go after all-inclusive deals - Tsipras has said the business model "largely alienates tourism from the local economy" - the party has said it will reopen big privatization deals already agreed upon. That could include deals to sell public land to resort developers and a plan to privatize 14 small but crucial airports that serve Greek cities and islands.
The ruling New Democracy party, led by Prime Minister Antonis Samaras, has proposed to double the value-added tax on hotel accommodations to 13 percent from 6.5 percent. Since the onset of the crisis, the tax rate has been moving like a bouncing ball. In 2009, the tax on both food and accommodations was 9 percent. In 2010, it was initially increased to 10 percent and then to 11 percent.
The next year, it was increased to 13 percent for food, but lowered to 6.5 percent for accommodations. In 2012, the food tax was raised to 23 percent, but it was lowered to 13 percent again in 2013. Now the government is proposing to unify the two rates at 13 percent.
Hoteliers are alarmed, after a record year had them feeling optimistic again. Tourism plummeted in the depths of the financial crisis, but rebounded by 20 percent last year with a record 21.5 million arrivals.
Syriza’s plan to go after all-inclusive deals has particularly raised eyebrows, since they accounted for about €2 billion of the industry’s projected €15.20 billion in revenue last year, and are offered by competing tourist destinations in Italy, Turkey and Egypt.
"Why not be the California or Florida of Europe?" Andreas Andreadis, the president of the Greek Tourism Confederation, who wants to do more to make the country a vacation destination and even a place for second homes told NYT. Politicians, he added, "think three months down the road. No vision. Without vision, you are dead."
Referring to the proposed tax increase, he said, "It’s completely stupid in an exported product where you compete with the entire world." He added, "It’s committing suicide, basically."
New Democracy would not comment on its tourism plan. The tax increase has been described as a temporary measure, though a clear time frame has not been provided. The party’s leadership has also said the tax increase was the troika’s idea, pointing the finger at an unpopular target, though party officials believe that the tourism industry is one of the few that can bear a tax increase.
The proposal is creating strains within the party. On Monday, the government’s tourism minister, Olga Kefalogianni, came out against it in an interview published by Naftemporiki, a financial newspaper.
"We need to be taking initiatives that reinforce tourism and not measures that stop it," she said, adding, "I am saying clearly that the next government should aim for the withdrawal of this when negotiations with the troika resume after the election."
Syriza’s proposals reflect its populist ideology, which is aimed at curbing austerity policies and aiding small businesses and average citizens.
"For the all-inclusive, our view, as well as that of the tourism industry, is that it’s not the best thing," said Michalis Kritsotakis, a Parliament member from Syriza who is responsible for the party’s tourism policy. "What we ask is a better quality of tourism, but the all-inclusive is not something that can be banned."
He called for a new model that would lead to "a lesser number of all-inclusive packages in due time" or "the stopping of the negative effects that the all-inclusive packages have."
"The first thing that happens is that some tourists who use them do not have a good view of things because they are embedded in a hotel," he said, adding that some tourists "didn’t even know what part of the country they were at."
Some more-luxurious resorts are already changing tack, like the Ikos Oceania in Halkidiki in northern Greece, which has begun to incorporate local restaurants into a more expansive definition of "all-inclusive." But resorts that are more mass market would most likely have trouble expanding their offerings while keeping prices in check.
"You cannot forbid or cancel all-inclusive; it’s an international need of the customer," said Yiannis A. Retsos, managing director of Electra Hotels and Resorts and president of the Hellenic Hotel Federation. "We cannot discuss it seriously," he added.
The article also hosts the view of a Welsh tourists who regularly holidays in Rhodes, who said he would think twice before choosing Greece if the all-inclusive were limited.
Source: New York Times
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