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Proposal for a new development model

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Presentation Outline <ul><li>Purpose </li></ul><ul><li>Methodology </li></ul><ul><li>Greek tourism today </li></ul><ul><li>Factors affecting tourism in the future </li></ul><ul><li>The new development model for tourism economy </li></ul><ul><li>Our vision for 2020 </li></ul><ul><li>The human factor </li></ul><ul><li>Areas of intervention </li></ul><ul><li>Conclusions </li></ul>

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Purpose <ul><li>To propose the strategic directions and the framework </li></ul><ul><li>for Greek Tourism towards 2020. </li></ul><ul><li>The new development model should : </li></ul><ul><li>Define the leading role of tourism in the country’s economy. </li></ul><ul><li>Highlight tourism as priority for government policy. </li></ul><ul><li>Give specific tourism development directions. </li></ul><ul><li>Support the transition of the tourism policy from verbalistic approach to rational action. </li></ul><ul><li>Ensure that a series of prerequisites have been met in order to improve tourism competitiveness. </li></ul><ul><li>Be attractive for new investments. </li></ul><ul><li>Contribute to the dissemination of tourism benefits within the society. </li></ul>

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Methodology <ul><li>Research :“The importance of tourism for the Greek economy and society”, </li></ul><ul><li>University of the Aegean </li></ul><ul><li>www.greektourism2020.gr </li></ul><ul><li>Seven (7) workshops ( Samos, Kos , Chania, Chios, Zakynthos, Rhodes , Salonica ) </li></ul><ul><li>Secondary research which included a wide literature review </li></ul><ul><li>Conclusions of the 9 th SETE Tourism & Development Conference subject “Tourism: Priority in Government - Consciousness in Society”, which took place on the 18 th & 19 th October 2010 in Athens </li></ul>

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Greek tourism today <ul><li>The role of tourism in the Greek economy </li></ul><ul><li>The competitiveness of Greek tourism </li></ul>

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The contribution of tourism to GDP, employment, trade balance Source : WTTC, Bank of Greece

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Population evolution in selected tourism areas Source : Athanasiou et al, 1992, Pavlopoulos & Kouzelis , 1998, EL.STAT statistical yearbooks

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Compound Index for Prosperity & Development on regional level Source : Allmedia , 2002, Petrakos G. & Psycharis G. , 2004, Regional development in Greece , Kritiki

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Change in international tourist arrivals , receipts & average per capita tourism expenditure, Greece & competitors, 2000 - 2009 Source: EL.STAT. , UNWTO

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World ranking in arrivals ( mi .) 2000 & 2009 12 th Source: UNWTO, 2006, Yearbook of Tourism Statistics 16 th Source: UNWTO, 2010, Tourism Highlights

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World ranking in receipts ( bi . US$ ) 2000 & 2009 11 th Source: UNWTO, 2006, Yearbook of Tourism Statistics 15 th Source: UNWTO, 2010, Tourism Highlights

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Change in international tourist arrivals and hotel beds 2000 & 2009 Source: SETE , based on data provided by the Hellenic Chamber of Hotels, EL. STAT

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Geographical concentration of tourism supply ( based on hotel beds ) 2000 & 2009 Source: SETE , based on data provided by the Hellenic Chamber of Hotels 65%

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Image of Greece as a tourism destination

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Factors affecting tourism in the future <ul><li>Climate change </li></ul><ul><li>Demographics </li></ul><ul><li>Technology </li></ul><ul><li>Globalization of competition </li></ul><ul><li>Safety </li></ul><ul><li>Middle class </li></ul><ul><li>Perceptions of luxury </li></ul>

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Climate change <ul><ul><li>Temperature increase ( 0,3 ο C -0,7 ο C per decade) will even cause the outbreak of tropical diseases. </li></ul></ul><ul><ul><li>Increased number of days with temperature above 40 ο C. </li></ul></ul><ul><ul><li>The number of days with temperature above 30 ο C will double . </li></ul></ul>

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Climate change <ul><ul><li>What if the 120 millions tourists that visit the Mediterranean countries will constantly decrease because of the climate change? </li></ul></ul><ul><ul><li>What if north Europeans will prefer to take their holiday in their countries or in other north European countries? </li></ul></ul><ul><ul><li>What if high season will not be the summer but spring and autumn? </li></ul></ul><ul><ul><li>What if our market mix will radically change? </li></ul></ul><ul><ul><li>Maybe it is high time we adapted tourism planning to the new upcoming changes… </li></ul></ul><ul><ul><li> </li></ul></ul>

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Demographics <ul><ul><li>Household and family profiles </li></ul></ul><ul><ul><li>Migration </li></ul></ul><ul><ul><li>Population and age profiles </li></ul></ul>Source: Valeria Croce, MODUL University Vienna, 2009, presentation in the World Travel Monitor Forum, Pisa UN, 2002, World Population Aging 1950-2002

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Technology <ul><ul><li>Increased on line penetration </li></ul></ul><ul><ul><li>Wide use of web applications for mobiles </li></ul></ul><ul><ul><li>Increased interaction through social media </li></ul></ul><ul><ul><li>Constant upgrade of information systems </li></ul></ul><ul><ul><li>Full application of digital data </li></ul></ul>Source: Deloitte, 2010, Hospitality 2015: Game changers or spectators? ( adaptation )

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Globalization of competition Source: Ricky Mack, Boeing Commercial Airplanes, 2009, presentation in the World Travel Monitor Forum 2009, Pisa

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Safety The adaptation of crisis management methods and techniques must be among our strategic priorities.

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Middle class size (mi.) and global share (%) Source: Wolfensohn Center for Development at Brookings, 2010, “ China’s Emerging Middle Class: Beyond Economic Transformation”

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Perceptions of luxury <ul><li>Travelers coming from emerging economies will seek for “opulence”. </li></ul><ul><li>Luxury will still mean business class, champagne, caviar, distinctive design, branded accessories, shopping luxury etc. </li></ul><ul><li>Travelers coming from mature economies will take distance from consuming. </li></ul><ul><li>Luxury will mean self actualization, distinctive experiences and well being feelings. They will seek for experiences of high quality and customized/exclusive service. </li></ul>

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The new development model for the tourism economy <ul><li>Our vision for 2020 </li></ul><ul><li>The new development model </li></ul>

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Our vision for 2020 Greece to be a country that offers a high standard of living for its residents , a country where residents from all over the world would like to stay either permanently or temporarily . Greece to be a pleasant country for its permanent residents hence pleasant and attractive for its visitors, its temporary residents.

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Our vision for 2020

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Our vision for 2020 With this vision the Gross Domestic Product of Greece in the year 2020 will be referred as Gross Domestic Prosperity and the Average Spending per Person of our visitors as Average Satisfaction per Person .

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The new development model <ul><li>Conceptual definition </li></ul><ul><li>Development dilemmas </li></ul><ul><li>Counteractive facts </li></ul><ul><li>Reference framework </li></ul><ul><li>Targeted results </li></ul><ul><li>Areas of intervention </li></ul>

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The new development model conceptual definition

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The new development model development options

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Business unit or destination? <ul><li>Tourists first “buy” the destination. </li></ul><ul><li>The destination needs business units . </li></ul><ul><li>Priority to the destination should be given according to its development level. </li></ul><ul><li>Business support depends on the total destination attractiveness. </li></ul>

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To subsidize private investments or to finance infrastructure projects ? Infant industry For all business through general infrastructure Regional convergence Attracting investments Creating added value

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To support all businesses or selected pioneers? Priority should be given to the support of companies that contribute proportionally more both to the broad economy and regional development over time

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Inbound or domestic tourism? Inbound 73% Domestic 27% Redistribution of income Positive influence on the balance of payments

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New or established markets?

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Quantity or quality?

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The new development model reference framework Source: SETE , based on http://www.forumforthefuture.org/projects/the-five-capitals

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The new development model targeted result - Triple Bottom Line

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The human factor <ul><li>Employment in the tourism economy </li></ul><ul><li>Employment policy for tourism </li></ul><ul><li>Tourism policy for employment </li></ul><ul><li>Human resource training </li></ul><ul><li>Image and social status </li></ul>

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The human factor employment in the tourism economy <ul><li>Tourism stimulates employment in a wide range of economic sectors including employees with different educational levels. </li></ul><ul><li>Tourism employment positively affects young people in regional areas. </li></ul><ul><li>For every (1) job created in tourism, another one (1) is created in the broad economy. </li></ul><ul><li>One (1) out of five (5) Greeks is directly or indirectly employed in the tourism sector. </li></ul>

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The human factor employment in the tourism economy Source: SETE , , based on data provided by WTTC, EL.STAT.

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The human factor employment in the tourism economy Service Productivity in tourism : Greece and competitors Source: SETE

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The human factor employment in the tourism economy International tourism receipts per employee (US$) Source: SETE

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The human factor employment policy for tourism

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The human factor tourism policy for employment For every 100 beds 16 jobs are created For every 100 beds 6 jobs are created

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The human factor human resource training

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The human factor image and social status Employees Denigration Prestige Being proud Businessmen Social stereotype Sector introversion Anti –partnership syndrome

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The new development model for tourism economy areas of intervention <ul><li>Organizational and institutional reforms </li></ul><ul><li>Tourism supply management </li></ul><ul><li>Tourism demand management </li></ul>

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Organizational and institutional reforms <ul><li>Government and broad public sector </li></ul><ul><li>Private sector </li></ul><ul><li>Distribution network </li></ul><ul><li>Web presence </li></ul><ul><li>National Tourism Organization </li></ul><ul><li>Alliances </li></ul><ul><li>Networking </li></ul><ul><li>Brand </li></ul>

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Organizational and institutional reforms government and broad public sector 1992 – 2010 : 18 years 48 different persons on governmental level in tourism administration

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Organizational and institutional reforms government and broad public sector 1992 – 2010 : 18 χρόνια 48 πρόσωπα στην πολιτική ηγεσία <ul><li>Independent Ministry of Tourism </li></ul><ul><li>Permanent Secretary General for Tourism </li></ul><ul><li>Tourism Secretariats in all tourism related Ministries </li></ul><ul><li>Coordination & supervision from Prime Minister’s office </li></ul>

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Organizational and institutional reforms government and broad public sector Regional governance based on Kallikrati’s plan Regional Marketing Agencies Source: http :// www . ypes . gr / Source: SETE , 2004

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Organizational and institutional reforms government and broad public sector Sample product mix per region

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Organizational and institutional reforms government and broad public sector

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Organizational and institutional reforms private sector - representation

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Organizational and institutional reforms private sector - organization

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Organizational and institutional reforms private sector - organization <ul><li>Think Tank </li></ul><ul><li>To analyze the wider economic, social and political environment (e.g. political and economic crises, new regulations affecting tourism field). </li></ul><ul><li>To combine the above analysis with the existing know how through formal and informal workshops. </li></ul><ul><li>To generate new ideas and diffuse political positions that promote Greek tourism. </li></ul><ul><li>To strengthen the scientific approach in tourism. </li></ul><ul><li>To contribute to the formation, monitoring and evaluation of the tourism strategy implementation. </li></ul>

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Organizational and institutional reforms distribution networks <ul><li>Web presence </li></ul><ul><li>National Tourism Organization </li></ul><ul><li>Alliances </li></ul>

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Organizational and institutional reforms distribution networks - web presence

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Organizational and institutional reforms distribution networks - National Tourism Organization

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Source: Ministry of Economy and Innovation, 2007, National Strategic Plan for Tourism-Portugal Organizational and institutional reforms distribution networks - alliances Initial distribution model New distribution model

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Organizational and institutional reforms influential networks

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Organizational and institutional reforms brand

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Organizational and institutional reforms brand

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Organizational and institutional reforms brand Explore your senses ’ 06 Live your myth in Greece ’ 05 ’ 07 - ‘08 The true experience

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Organizational and institutional reforms brand

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Organizational and institutional reforms brand

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Organizational and institutional reforms brand

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<ul><li>Organizational and institutional reforms </li></ul><ul><li>Tourism supply management </li></ul><ul><li>Tourism demand management </li></ul>The new development model for tourism economy areas of intervention

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Tourism supply management <ul><li>Quantitative approach </li></ul><ul><ul><li>Oversupply estimation </li></ul></ul><ul><li>Qualitative features </li></ul><ul><ul><li>Core product + Added value = Final product </li></ul></ul><ul><ul><li>Expectation gap and Value for Money </li></ul></ul><ul><ul><li>Anti - Service syndrome </li></ul></ul>

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Tourism supply management Oversupply estimation Source: SETE , based on data provided by the Hellenic Chamber of Hotels, EL. STAT, Confederation of Greek Rented Rooms ( ΣΕΕΔΔΕ )

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Tourism supply management qualitative features Final product of QUESTIONABLE QUALITY, OVERPRICED, NON COMPETITIVE Core product EXCELLENT Added value NEGATIVE

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Source: SETE Tourism supply management expectation gap & value for money under promise - OVER DELIVER

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Tourism supply management No need for classification systems Source: Amadeus, 2010, Invent the future: the new normal for hotels in 2010 and beyond

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Tourism supply management anti-service syndrome

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<ul><li>Existing supply </li></ul><ul><li> </li></ul><ul><li>Provisioning new supply </li></ul><ul><li> </li></ul><ul><ul><li>Α. «- ikos » approach </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Β. Intersectoral approach </li></ul></ul><ul><ul><li>C . Holiday home not paid for (Second home) </li></ul></ul><ul><li> </li></ul>Tourism supply management

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Tourism supply management existing supply More Value for Money

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Tourism supply management new supply Source: SETE , based on data provided by UNWTO , World Travel Monitor , 2005 & 2009, EL.STAT. Market share of Greece in its basic source markets

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Tourism supply management new supply Source: SETE , based on data provided by UNWTO , World Travel Monitor , 2009 Total outbound trips : geographical and product markets, 2009

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Tourism supply management - ikos approach

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Tourism supply management - ikos approach Evaluating the competitiveness of tourism products

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Tourism supply management intersectoral approach Tourism Accommodation , Food , Transportation , Sightseeing Equipment, Entertainment Construction , Health Services, Financial Services , Printing , Shipbuilding, Aerospace, Security Services, Education, Wholesale, Chemicals, Food and Beverage Demand

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Tourism supply management intersectoral approach To approach sectors for developing synergies

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Tourism supply management intersectoral approach gastronomy , sports, health services, education, culture

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Tourism supply management intersectoral approach - gastronomy Source: SETE , 2009, Gastronomy in Greek Tourism Marketing

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Tourism supply management intersectoral approach - sports

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Tourism supply management intersectoral approach - sports

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Tourism supply management intersectoral approach - health services <ul><li>Tourists - patients that travel having as main motivation medical reasons </li></ul><ul><li>( Health not Holiday -Η nH ). </li></ul><ul><li>However , we do not consider HnH tourists those who visit Greece e.g. for Sea & Sun holiday and they happen to “buy” a wellness service. </li></ul>

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Tourism supply management intersectoral approach - education

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Tourism supply management intersectoral approach - culture Source: SETE , based on data provided by UNWTO , World Travel Monitor , 2004, EL.STAT. European outbound cultural tourism: trips (000) & destination market share (%), 2004

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Tourism supply management intersectoral approach - culture

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Tourism supply management intersectoral approach <ul><ul><li>Product Manager </li></ul></ul>Sport Gastronomy Culture Health services Education

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Tourism supply management holiday home not paid for (second home) Source: SETE, based on data provided by UNWTO , World Travel Monitor 2009 European outbound tourism : trips (000) to holiday home , 2009

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<ul><li>Organizational and institutional reforms </li></ul><ul><li>Tourism supply management </li></ul><ul><li>Tourism demand management </li></ul>The new development model for tourism economy areas of intervention

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Tourism demand management <ul><li>Quantitative & qualitative elements: </li></ul><ul><ul><li>Markets </li></ul></ul><ul><ul><li>Seasonality </li></ul></ul><ul><ul><li>All year long tourism? </li></ul></ul><ul><li>Crisis Management </li></ul><ul><li>Digital strategy </li></ul>

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Source: SETE , based on data provided by EL.STAT. , Bank of Greece Tourism demand management markets - 10 top markets for Greece

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Source: UNWTO, 2009 & 2010, Tourism Highlights Tourism demand management markets - 10 top markets in the world

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No1 Target Tourism demand management markets

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<ul><li>Do tourism employees want to work more? </li></ul><ul><li>Do professionals in the supporting industries e.g. mini markets, entertainment centers etc, want to work more? </li></ul><ul><li>Does government understand that instead of paying unemployment benefits is better to lower the labor cost? </li></ul><ul><li>Do seasonal hotels have the intention to open not with the highest occupancy rate? </li></ul><ul><li>Do tourism destinations want more connections with source countries? </li></ul>Tourism demand management seasonality

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Source: SETE , based on data provided by EL. STAT. Seasonality of international tourists arrivals , Greece, 2009 Tourism demand management seasonality

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Seasonality of international tourist arrivals Tourism demand management All year long tourism? Source: SETE , based on data provided by EL. STAT.

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Seasonality of international tourist arrivals Tourism demand management All year long tourism? Additional demand 3 milions ! Performance at 80%! Source: SETE , based on data provided by EL. STAT.

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Tourism demand management crisis management <ul><li>2007 : Sinking cruise ship in Santorini , children gassed to death in a hotel room in Corfu </li></ul><ul><li>2008 : December social unrest </li></ul><ul><li>2009 : Financial crisis </li></ul><ul><li>2010 : May protests </li></ul><ul><li>201 1: What’s next? </li></ul>

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Source: SETE , based on a proposal provided by PRC Group , THR, MRB, 2007, Crisis Management Plan for Greek Tourism Tourism demand management crisis management

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Digital strategy is not about technology . It focuses on human beings and their desire to be connected with whatever they like . Tourism demand management digital strategy

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Tourism demand management digital strategy

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Tourism demand management digital strategy

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Conclusions <ul><li>Tourism's potential contribution to the country's economic and social development : </li></ul><ul><li>Structrural and institutional reforms on government, regional administration and the wider public sector </li></ul><ul><li>A pproach and manage tourism supply and demand with scientific and creative ways </li></ul><ul><li>O penminded private sector and synergies with other sectors of the economy </li></ul><ul><li> </li></ul><ul><li>Last, but not least: </li></ul><ul><li>day by day technology will make great strides ahead, but in Tourism, </li></ul><ul><li>the people is by far the most important factor of success! </li></ul><ul><li> </li></ul>

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www.greektourism2020.gr