Introduction
Tourism in Greece is one of the most important industries which have been able to boost its national growth. The industry has been rated to contribute more than 15% of the country’s output annually making it the most popular industry. This is based on the many beaches and the Mediterranean coastline which is a geographical advantage to the country. The country which is based in Europe has a rich history as the natives have retained their culture, thus attracting tourists. This has created a base for approximately 17.5 million visitors who originate from all walks of the world (Bramwell, 2004). It has, therefore, been a major goal for the Greece government and political leaders, to stabilize the industry thus creating better environment for the tourists.
The industry due to its high output level has been rated to create employment for 16.5% of the citizens in the country. This is both directly and indirectly as citizens make business and tradeoffs with the tourists. It has also led to the development of the hospitality industry which involves establishment and the running of large hotels, and accommodation facilities to ensure the comfort of the tourist. These hotels range from five star to one star with a total of almost 10,000 registered hotels in the country. The country is also endowned with different archeological sites and cities including Olympia, Rhodes and Thebes. In additional there are different galleries where most artifacts are exhibited including in towns like Klavrta nad Thessaloniki. The Helenic Republic also receives a large tourist base for its specutacular museums with the country having over 150 museums nationally (Carayannis & Korres, 2013).
These sites, cultures, hotel and hospitality industry, marinas and archeological sites have, therefore, created some political pressures on the government to maintain the services and retain the flow of tourists. It is the responsibility of the government to create a condusive political and social environment for the tourists thus ensuring their security. Political wrangles and instability in the country have, however, affected the smooth flow of the industry making it to loose a high chunk of income. These wrangles have affected the desire of most people to visti the country as they fear the current economic crisis in the country thus its political instability. Formation of a democratic government is a very essential factor to international visitors as it indicated the freedom and rights of the citizens. Failure to establish suh a government can cause a reduction of such visitors which has been used, to explain the reduction in the tourists flow in 2012. Greece has alo been highly affected by the Euro crisis which has increased speculations of the debt situation in the country. This has been enhanced with speculations that the country was to leave the Euro, thus reducing the faith most tourists had on the economic stability of the countery.
The essential political event which has highly effected the trade arrangements and internationsl views in Greece is its current Euro crisis. These crisis have placed the country is a complicated situation thus depicted a country on its downfall. The crisiss involve among the least the high debt crisis which the conurty owes the EU making it hard for it to be bailed out. These debts are an accumulation of borrowed funds, and mismanagement of these funds by the existing government. Its national debt has accumulated to a position where the country has been unable to repay these debts. This has created a detrimental crisis for the EU as this failure can lead to its collapse. Greece has also indicated its unwillingness to continue being in the EU (Carayannis & Korres, 2013). This has detrimental effects as it can cause a bail out of other European countries making it hard to sustain it. These crises have been established to have a political background other than an economic one, as the Parliamnent has the responsibility of making most of these decisions.
The political stability in the country has also been questionable inducated by the increased social protests, and demonstrations held especially in Athens. In early 2012, the country experienced several social protests in different cities which majorly affected the flow of tourists in the country (Bramwell, 2004). This was caused by the flop to elect a government in mid 2012. According to the national constitution, this had to be followed by another election within the next six weeks, which was both economically and politically devastating for the country. The increased protests created a situation of fear among tourists who were not assured of their safety. The tourism industry is based on a peaceful and relaxation platform, which the tourists can enjoy in their vacations. Lack of such peace, therefore, acts as a threatening factor as the visitors become aware of their safety thus are not willing to risk their lives. These riots also affected the number of local tourist reported in the country.
The Greek population has been on the decline as people shift from major cities and the country to destinations where their safety is assured. Mass urbanization has also been on the decline especially movement from Athens, to other cities thus creating an atmosphere of fear. This has also highlycontributed to the unemployment rate and increase in brain drain as professional seek jobs in other country. These factosr have made it complicated for investors to input their capital in the tourism, and hospitality industry as they fear losing their investments. Lack of investments thus underdevelopment in this sector has greately affected the tourism level in the country.
The political wrangles and Euro crisis have reduced the economic stability of the country mking currency exchange a complicated task. The international and local media have been diversely involved in reporting the happenings of the country creating uncertainties among the tourists (Briassoulis & Straaten, 2000). It is complicated for any torusit to visit a country where the currency exchange rate is unpredictable, and can shift to their disadvantage within hours. There is also fear of collapse of hotels and other hospitality places within the tie of their visit thus increasing their uncertainity.
Most people are confident of the stability of the country within some years but this can take even decades before new leadership can cover the Euro crisis. The country’s political decision makers in the parliament have been put in rocky situations as they face opposition, and increased competition from side lined parties. The two major parties in Greece politics namely Pasok and New Democracy have been in the countries political front since 1974 (Briassoulis & Straaten, 2000). This has, however, changed since the occurrence of the economic crisis in 2008 as most citizens develop different ideologies. The establishment of a stable government which is ready to improve the economic and social status of the country has, however, been a welcome to many who have watched the fall of the country.
Economically, a reduction in demand for any service leads to increased supply which with time affects the prices charged for such services. This has adversely affected the tourism industry in Greece caused by the current political issues in the country. These issues have negatively affected the tourist reports in the country, thus reducing people visiting both locally and internationally. This has caused a reduction in demand for services in the hospitality industry and visitations of the archeological sites, museums and the beaches. To curb the cost of production, the reduction in demand for their supplies have made hotel owners, and museum operators to reduce their srvices and cut on the labor level required. This has, therefore, translated to unemployment in the country as suppliers try to reduce their cost. The informal businesses have also been affected and sectors such as curios, taxi serices have been diversely affected by this reduction.
Schedule indicating the number of tourist and income gained.
D S
D1
19.3
17.2
S D
D1
12.6 14.8
Income in US$ billions
The demand supply curve indicates a reduction in demand by tourists from DD TO DIDI. The equilibrium point, therefore, shifts to the left which indicates a reduction in income gained for 2010. The supply curve, however, remains constant as the tourism organizations in the country are willing, and able to offer such services as required. The demand for tourist in 2010 in Greece reduced by 10.8% from 2009 which can be calculated: as
(19.3-17.2)*100
19.3
=10.8%
This reduction led to a reduction in the income collected within the country of $US 2.2 billion:
14.8-12.6
=2.2 $US billion
This can be explained by the political instability experienced in the country during this period and the Euro crisis. These factors created an environment of uncertainty among the tourists thus reducing their demand for such services.
The tourism sector has also been affected by increased taxation rates imposed by the government in a bid, to raise funds to cover the national debt. The debt owed to the European Union has become a burden to all the citizens making life unbearable. This has also affected the tourism industry as the government has established high rates, to collect revenue from the industry. The industry has been the highest GDP earner for the country, thus an increase in its taxation rate could lead to high revenue collection by the government (Carayannis & Korres, 2013). This tickles down to the tourist as ivestors increase the prices charged to collect such taxes indirectly. Increased prices have an economic effect of reducing demand as people opt to tour other countries where such prices are favorable.
Conclusion
The 5% annual decrease in revenue collected by the tourism, and hospitality industry in Greece can be explained by the increased political instability, and hostility reported the country. The Euro crisis also highly affected the economic stability of the country which was hugely felt in this industry. Most of these are external factors which affect the revenue of any company making them uncotrolable by the management. It is complicated to control the international views of people especially regarding the political stability of a country when such issues are available on media services. The management, however, have the option of conducting international advertisement with screen shots of customer security while visiting the region.
Managers and company shareholders in this industry, however, have a high opportunity to exploit the new government, and administrative changes being made in the government. This involves taking place in establishment of commissions, which can discuss and regulate the rules and taxes imposed on the industry. With the high revenue base made by the industry, it is possible to negotiate tax havens and reduced rates for a specified period of operation. This can be used to boost the profitability level of the organizations as it reduces the cost of production, and service delivery. This also assists in establishment of customer friendly prices which is a main attraction point for most tourists. Consideration of such factors and using the arising opportunity can be of great assistance in boosting and reestablishing the glory that the Greece tourism industry had before 2008.
Graphical representation of tourist in Greece annually
References
Bramwell, B. (2004). Coastal mass tourism: Diversification and sustainable development in Southern Europe. Clevedon [u.a.: Channel View Publ.
Briassoulis, H., & Straaten, J. . (2000). Tourism and the environment: Regional, economic, cultural and policy issues. Dordrecht [u.a.: Kluwer Acad. Publ.
Carayannis, E. G., & Korres, G. M. (2013). European socio-economic integration: Challenges, opportunities and lessons learned. New York: Springer.
