GREECE: Tax Cuts To Boost Greek Tourism

Tax cuts and land-use planning are the main factors that can improve the competitiveness of Greek tourism and contribute to its steady growth, according to the Greek Tourism Confederation (SETE).

In a meeting on Thursday with Prime Minister Alexis Tsipras at the Maximos Mansion, a delegation from SETE, headed by its president, Yiannis Retsos, called for the VAT rates on transport, accommodation and the food sector to be adjusted to lower levels, equivalent to those of competitor countries.

In statements to the media, Retsos said that the confederation informed the Greek PM on the main issues concerning tourism.

“Taxation, especially the value-added tax (VAT) and the stayover tax on accommodation, reduce the competitiveness of our product,” he said. The VAT rate imposed on the Greek tourism sector is currently seven percent more than that in competitor countries.

Regarding the stayover tax, which is planned to be charged on Greek hotels as of January 2018, SETE underlined that its imposition for all months of the year will undermine efforts to extend the season and also negatively affect the country’s winter destinations.

SETE has proposed for the stayover tax to be imposed only during the two-month period from July to August, as it is estimated that demand will be less affected.

Moreover, the SETE delegation brought the issue of land-use planning to the attention of the Greek PM.

“There is currently no land-use plan in place… These two issues, taxation and land-use planning, are also a barrier to investment, which is needed by the country,” Retsos said.

The Greek PM was also informed about SETE’s initiative to link tourism with culture and agriculture.

Regarding the progress of this year’s tourism season, SETE informed PM Tsipras that it is showing growth so far both in arrivals and revenue.

“This year will be a good year… But the government must take advantage of this positive circumstance that exists in the sector so that what is being done today is the basis of a strategic planning for the future… The sector should be the one that the country can depend on in the future to come out of the crisis,” he said.

The South Aegean region and the island of Crete were among the 30 most popular tourism destinations in the European Union in 2015, according to Eurostat, the statistical office of the European Union.

The South Aegean ranked 26th and registered 23.4 million overnight stays by EU residents and non-residents in 2015, while Crete ranked 27th with 23.3 million overnight stays.

The Canary Islands in Spain topped the list with 94 million overnight stays and were followed by Île-de-France with 76.8 million and Catalonia with 75.5 million.

Among the top 30 tourist regions in 2015, six were located in Spain, France and Italy, four in Germany, two in Greece two in Austria, one in Ireland, one in the Netherlands and one in the United Kingdom (inner London).

Nearly 90% of overnight stays within the EU were spent by EU residents, while only 10 percent of overnight stays concerned non-EU residents.

The United States topped the list of EU travelers’ popular destinations outside the European Union with a share of 13.8 percent in 2015. Turkey was second with 10.4 percent and Morocco third with 4.6 percent.

Greeks mostly traveled to Albania (53.8 percent) and Turkey (9.4 percent) outside the EU.

Two tour operators and three airlines are handling the bulk of travelers interested in visiting Greece this summer, according to the Hellenic Slot Coordination Authority (HSCA).

More specifically, according to the HSCA, five airlines, namely Aegean/Olympic Air, Ryanair, easyJet, Smart Wings and Transavia, and four tour operators – TUI, Thomas Cook, Jet2.com and Mouzenidis – control more than half, or 10.5 million spots, out of a total of 20.1 million spots planned for this summer. HSCA data is collected at 23 Greek airports excluding Athens International Airport.

According to the same data, overall tourist traffic appears to be in the hands of just five “players” accounting for almost nine out of the 20 million planned spots: Aegean/Olympic Air, Ryanair and easyJet with 5 million spots, and tour operators TUI and Thomas Cook representing 3.4 million spots.

Aegean Airlines is in the lead with 3.3 million planned spots. Irish low-cost carrier Ryanair meanwhile is the champion serving the majority of international flights to 23 Greek airports (excluding Athens) for the summer, with 1.4 million planned spots.

At the same time, TUI Group has booked 1.8 million spots this summer through its own carriers: Thomson Fly, TUI fly and JetAirFly. Thomas Cook, follows holding 1.5 million spots via its airlines Thomas Cook and Condor.

Greek tour operator Mouzenidis through its carrier Ellinair has scheduled half a million spots for its mostly Russian clientele.



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