FOX ON FRIDAY

 

WYSK – What You Should Know. Greece, Tunisia.

Greece

Greece now seems likely to leave the Euro currency zone, perhaps by default.

 

The destination’s financial troubles could be good news for visitors, although they will need to take more cash with them. TV reports show lines of people at ATMs and banks shuttered, and there are worries about the reliability of airports, hospitals, hotels.

 

The visitor business was good in 2014 – up 23% to 22.0mn. Spend +10% to US$17.8bn – resulting in a lower spend-per-visitor than industry norms. (That was US$809, compared with the rule-of-thumb US$1000.)

 

WTTC puts Greece’s travel business revenue at 7.0% of GDP – but that includes segments of the business that are not related to the visitor business.

 

Summer bookings are vital. Future visitor bookings have fallen around one-third since capital controls were imposed. That does not mean a one-third drop in visitor arrivals, but over the year – if there is no further bad news – I think the fall could be around 10-15% in 2014 visitors and -10% in spend (actual visitors may spend more because many goods and services will be cheaper, even if in Euros).

 

 

Tunisia

Even before June’s terrorist attack at a resort hotel, and three months before at a tourist-frequented museum in Tunis, the destination’s visitor business was in trouble.

 

Arrivals fell 3.2% in 2014 (to 6.07mn), which means they were 12.1% down on 2010. That was the peak year with 6.90mn visitors, and the year the Arab Spring started, in Tunisia, in December.

 

WTTC puts Tunisia’s travel business revenue at 7.4% of GDP – but that includes segments of the business that are not related to the visitor business.

 

I think the visitor count will fall 15% this year, and revenue up to 20%. As a percentage of GDP perhaps not so big a drop – for the sad reason that overall GDP is likely to fall this year.

 

 

Gainers

For Greece, probably most for Spain but also Italy. Of other destinations, Turkey has its own image problems (in terms of gaining diverted visitors) and France is too costly.

 

In the medium-term, if Greece leaves the Eurozone and brings back its drachma currency, that almost certainly will be devalued, which will make Greece cheaper than its competitors. Then again, other destinations in the Eurozone might gain because the value of the Euro has been falling this year, and more again as a result of Greece’s crisis.

 

For Tunisia, probably not two other main tourist destinations in North Africa – Egypt and Morocco. Because visitors will worry about terrorist contagion.

 

I think again Spain.

 

But remember that travellers are also human beings. Because they want to change their Greece or Tunisia visit this year, it does not mean automatically they will choose a similar destination. So instead of North Africa, they might switch to the US, or a cycling-holiday in Norway, or a new car.

*Reports on these topics in our Travel Business Analyst newsletter contains some important additional observations on the data shown here.

 

 

 

The Fox

Remember, I’ll be famous after I’m dead.

 

Advertisements