Koutoulas @ APTIC 2010 Seoul.pptx

Contents
1.
Brief overview of the Greek tourism industry
2.
The mass tourism model of Rhodes
3.
The "boutique" tourism model of Santorini
4.
The emergence of independent travellers in the age
of the Internet
5.
Useful lessons for Asian hotel investors and tourism
authorities from the Greek experience
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
2
Contents
1.
Brief overview of the Greek tourism industry
2.
The mass tourism model of Rhodes
3.
The "boutique" tourism model of Santorini
4.
The emergence of independent travellers in the age
of the Internet
5.
Useful lessons for Asian hotel investors and tourism
authorities from the Greek experience
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
3
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Development of tourism in Greece
•  Initially a cultural sightseeing destination thanks to its world-class historic monuments
•  After the 1960s, Greece established itself as a “sea & sun” holiday destination with an
ever-growing popularity boosted by blockbuster films such as “Zorba The Greek” and
“Never On Sunday”
•  Greece became the no. 2 mass tourism destination in the Mediterranean after Spain
•  Ill prepared for the challenges of the 21st century: cost, quality, product/market diversity
Tourist arrivals in Greece
between 1960 and 2009
18.754.593
Source: ELSTAT
14.914.534
13.567.453
9.310.492
5.271.115
399.438
1960
1.609.210
1970
1980
1990
2000
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
2007
2009
Dr. Dimitris Koutoulas
4
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Main source markets of Greek tourism
•  91% of all international tourists visiting Greece are from Europe
•  Emerging source markets: Russia and other East European countries, Asian countries
•  Great variation in the number of American tourists
Two major trends
•  Dropping length of stay (5.3 nights
per international visitor in 2009)
•  Shortening tourist season (70% of all
overnight stays between June and
September in 2009)
Number of tourists per country of origin in 2009
Source: ELSTAT
Germany
2.364.486
UK
2.112.149
France
962.435
Italy
935.011
Netherlands
USA
651.440
531.276
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
5
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The Greek hotel sector
•  There are 9.559 hotels operating in Greece with a total bed capacity of 732.279 in 2009
•  Average size is 40 rooms per hotel due to the large majority of family-operated hotels
•  Nearly half of all Greek hotels are two-star hotels averaging 30 rooms
•  Most hotels are seasonal operations
Average number of rooms per hotel according to
star ratings
Source: Greek Chamber of Hotels
Total bed capacity of Greek hotels
Source: ELSTAT & Greek Chamber of Hotels
732.279
172
607.614
438.355
89
278.045
45
5 Stars
4 Stars
3 Stars
30
2 Stars
19
1 Star
118.000
50.000
1960
1970
1980
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
1990
2000
2009
Dr. Dimitris Koutoulas
6
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Overdependence on tour operators
•  European tour operators have been the driving force behind tourism development in
Greece
•  For many years, tour operators have been:
•  filling the hotel beds on the Greek islands
•  providing a huge airlift capacity on their charter flights from across Europe to Greece
•  No need for Greek hotel owners to bother with marketing
•  Tour operators contribute, on average, 60% of all hotel guests in resort areas (2006)
•  Only one single operator (TUI) contributed 30% of all tourist arrivals from the twelve
traditional source market of Greek tourism in West and North Europe
•  Nearly half of the 17.5 million tourists (excluding cruise passengers) who visited Greece in
2007, arrived on charter flights operated by tour operators
•  Percentage of tourists arriving in Greece on charter flights:
• 
• 
• 
• 
• 
80%
61%
70%
69%
80%
of
of
of
of
of
British tourists
German tourists
Dutch tourists
Austrian tourists
Danish tourists
• 
• 
• 
• 
• 
76%
90%
81%
62%
57%
of
of
of
of
of
Swedish tourists
Norwegian tourists
Finnish tourists
Belgian tourists
Polish tourists
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
7
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Overdependence on tour operators
•  Drop in tourist traffic generated by tour operators since 2000
•  Loss of market share in favour of countries outside the Eurozone (Turkey, Egypt, Croatia,
Bulgaria, Tunisia, Morocco etc.)
•  Immense pressure on Greek hotels to lower their prices and to introduce cheap allinclusive offerings
 Greek hotels were, thus, forced to explore new markets (new segments, new countries)
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
8
Contents
1.
Brief overview of the Greek tourism industry
2.
The mass tourism model of Rhodes
3.
The "boutique" tourism model of Santorini
4.
The emergence of independent travellers in the age
of the Internet
5.
Useful lessons for Asian hotel investors and tourism
authorities from the Greek experience
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
9
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
What’s so special about Rhodes?
•  One of the Mediterranean’s most attractive and most popular islands
•  World-class historic monuments such as the Medieval Town and the Acropolis of Lindos
•  Great scenery both along the coast and in the green mountains
•  Great beaches
 over two million visitors each year
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
10
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The local hotel sector
•  474 hotels with 39.163 rooms and 74.847 beds (2009)
•  The hotels of Rhodes have twice the average size of all Greek hotels (83 rooms vs. 40
rooms per hotel)
•  The island’s four-star and five-star hotels are even larger (188 rooms on average)
•  Efficiently operated large resort hotels offering:
•  Low room rates for tour operators
•  Affordable holidays for European vacationers
•  A healthy profit margin for the hotels (until recently)
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
11
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The golden days (until 1999)
•  Rhodes was the first Greek resort area to flourish thanks to the tour operators
•  Tour operators brought easy money and prosperity to the island since the 1960s
•  Virtually no competition on the mass tourism market until the 1990s
•  Overbuilding of some parts of the island (especially in the north)
•  High growth rates between 1968 and 1999 followed by seven years of decline
Overnight stays at the hotel of Rhodes
Source: ELSTAT
12.000.000
10.816.711
10.000.000
8.000.000
7.861.485
6.000.000
4.000.000
2.000.000
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
68
19
66
19
64
19
62
19
60
19
58
19
56
19
19
19
19
54
76.000
52
0
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
12
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The decline (after 1999)
•  Caused by growing competition from other Mediterranean destinations (mainly Turkey)
and by unfavourable exchange rates after the introduction of the Euro
•  Rhodes became a highly substitutable “me too” holiday destination aiming at the most
price-conscious segment of this market
•  The island’s marketing activities focused not on the unique features of Rhodes but on the
similarities with hundreds of other Mediterranean destinations (sea and sun)
•  Hotel overcapacity further aggravated the pressure on hoteliers
300
250
200
150
100
50
Source: various
0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2002
2003
2004
2005
2006
Comparative development of
overnight stays at the hotels of
Rhodes, arrivals on charter
flights and hotels beds for the
period 1981-2006 (1981 = 100)
Overnight Stays
Arrivals on Charter Flights
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Hotel Beds
Dr. Dimitris Koutoulas
13
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The decline (after 1999)
•  Less overnight stays per bed and lower occupancy
•  Shorter stays (9,9 nights per hotel guest in 1981  7,9 nights in 2006)
•  Shorter season
•  Less tour operator-generated traffic
Annual overnight stays per available hotel bed
Source: ELSTAT
250
226
200
150
100
110
50
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
2005
2003
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
0
Dr. Dimitris Koutoulas
14
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The decline
•  Hotels on Rhodes were forced by tour operators to slash
their rates
•  Low rates attracted a rather undesirable clientele to the
town of Faliraki: The British customers of Club 18-30
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
15
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The reaction
•  Upgrading hotels in order to escape price competition with low-wage countries outside the
Eurozone
•  Introducing pool villas, spas and convention facilities at the large resort hotels
•  Creating new boutique hotels
•  Upgrading marketing and Internet skills in order to attract independent travellers
•  More sophisticated pricing tactics with tour operators in order to deal with overcapacity
•  Providing incentives to low-cost airlines to substitute the shrinking airlift capacity of charter
flights operated by tour operators
 #The result: Rhodes was among a very few Greek destinations that managed to
grow visitor numbers in 2010
Convention Centre of Rodos Palace
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
16
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The next steps
•  Re-establishing Rhodes as a quality resort island
•  Further growing cruise traffic
•  Reviving The Colossus of Rhodes, one of the seven
ancient wonders
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
17
Contents
1.
Brief overview of the Greek tourism industry
2.
The mass tourism model of Rhodes
3.
The "boutique" tourism model of Santorini
4.
The emergence of independent travellers in the age
of the Internet
5.
Useful lessons for Asian hotel investors and tourism
authorities from the Greek experience
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
18
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
A very different holiday experience
•  Different clientele with different travel preferences and different spending power
•  Different types of accommodation
•  Far less dependent on tour operators
•  Sophisticated Internet marketing skills
•  Sophisticated boutique hotel concepts
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
19
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
A few words about the island…
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
20
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The local hotel sector
•  260 hotels with 5.322 rooms and 10.190 beds (2009)
•  Different types of accommodation
•  The Caldera-side boutique hotels are the most prominent and highly recognisable
Perivolas
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
21
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The local hotel sector
•  Charging among the highest room rates in the country
•  The longest tourist season in Greece
•  Boutique hotels emerging also in the other parts of the island
•  Several conventional hotels charge much lower rates
Santorini Grace
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
22
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The tourism model of Santorini is future-proof because…
… it is based on the very unique volcanic feature of the island
… it represents a very distinctive lifestyle proposition and an aesthetic concept
… it appeals to a market segment – weddings and honeymoons – that will always generate
demand
… it is attractive to many nationalities from around the globe
… it creates value as visitors are ready to pay the premium prices of the island
… the unique hotel concepts are complemented by an extraordinary gastronomic offering
(cuisine and wine)
One factor that can undermine this otherwise perfect product is overbuilding!
Santorini Grace
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
23
Contents
1.
Brief overview of the Greek tourism industry
2.
The mass tourism model of Rhodes
3.
The "boutique" tourism model of Santorini
4.
The emergence of independent travellers in the age
of the Internet
5.
Useful lessons for Asian hotel investors and tourism
authorities from the Greek experience
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
24
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Getting away from the control of tour operators
•  Tour operators can be an excellent partner in growing tourist traffic to a resort
•  In some cases there are such strong conflicts of interest, that it doesn’t make sense to work
with them
•  The Internet has empowered tourist service providers to directly reach their markets, thus
limiting the need to use wholesalers and/or retailers
•  There are two major market segments among European holidaymakers:
•  Those who book their holidays with a tour operator
•  Independent travellers who prefer to organise their vacations by themselves
•  Independent travellers:
•  Book through the Internet
•  Use scheduled flights – and especially low-cost carriers – instead of charter flights
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
25
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
The market of independent travellers
•  Santorini and Mykonos were the first Greek destinations to turn to this market
•  Most local resort hotels have successfully disengaged themselves from dealing with tour
operators
•  They now secure higher room rates, have a longer season and a higher occupancy than
resort hotels in other parts of the country
•  Hotels in other parts of Greece are also being forced to turn to independent travellers as tour
operators (1) keep asking for lower room rates and (2) are sending less business
•  Large increase in hotel consortium membership (e.g. Leading Hotels of the World, Small
Luxury Hotels, Relais & Châteaux etc.) among Greek hotels which are in search of alternative
sources of business
•  New marketing efforts to attract low-cost carriers to the Greek islands
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
26
Contents
1.
Brief overview of the Greek tourism industry
2.
The mass tourism model of Rhodes
3.
The "boutique" tourism model of Santorini
4.
The emergence of independent travellers in the age
of the Internet
5.
Useful lessons for Asian hotel investors and tourism
authorities from the Greek experience
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
27
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Conclusions from the comparison of Rhodes and Santorini
•  Rhodes has been a highly successful mass tourism destination for four decades (until 1999)
•  Now it has reached a point where the destination must reinvent itself in order to ensure the
prosperity of the island for the next four decades
•  It has become a highly substitutable “me too” sea & sun destination, one among hundreds in
the Mediterranean, without taking advantage of its unique features
•  Santorini, on the other hand, represents a future-proof model that has allowed local
businesses – even extremely small ones – to prosper
•  The tourist industry capitalised on the unique features of the island and took it to the next
level
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
28
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Some thoughts for resort developers
1. Find a compelling answer to a tourist’s most obvious question: “Why should I visit your
resort?”
 Include a strongly differentiating – “iconic” – element in the project
 Adhere to strict quality standards and offer a compelling value proposition
 Create a strong brand
 Make sure that all visitors from all market segments are going to have a really great time!
2. Develop a future-proof resort concept
 Create a place that will remain appealing and competitive even after 20 or 30 years
 Avoid “me too” resort concepts and instead opt for being distinctive
 Avoid being part of future overcapacities by employing careful market analysis
3. Manage seasonality by attracting different market segments throughout the year – How?
#  By diversifying your markets – “Don’t put all eggs in one basket!”
 By diversifying your products and offerings
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
29
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Some thoughts for resort developers
4. Keep your destination and your products fresh
 Plan ahead for regular resort refreshment and upgrading before becoming obsolete and
before competitors start outshining you
5. Be environmentally and socially responsible
 or else risk being the target of extensive negative publicity and social media exposure
6. Curb any construction activity that will undermine the positioning and appeal of your resort
 Develop a detailed master plan and zoning regulations and work towards convincing all
stakeholders that it is in their best interest to strictly adhere to it
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
30
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Some thoughts for government authorities
•  Some Greek coastal areas were deeply scarred by poorly planned tourism development
•  However, bureaucracy saved Greece from the vacation real estate bubble
•  Spain is facing not one but three problems:
•  Thousands of ugly high-rise buildings – partly abandoned – are deforming the coast
•  Hotel and other tourist operators are directly impacted by urban decay
•  Thousands of buyers are being trapped with devalued property and loans they cannot
pay back
Benidorm, Spain
Valencia, Spain
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
31
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
Some thoughts for government authorities
•  It is important to understand the different interests – and their conflicts. For instance:
•  Are resort developers just sellers of vacation real estate?
•  Are resort developers also operators of hotels, marinas, theme parks etc. with a longterm commitment to the resort?
•  No future-proof resort development without strict zoning and construction regulations!
•  Encouraging investment with a long-term commitment to the resort’s success!
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
32
1. The Greek Tourism
Industry
2. The mass tourism
model of Rhodes
3. The "boutique" tourism
model of Santorini
4. Independent travellers in
the age of the Internet
5. Useful lessons from the
Greek experience
One last word…
•  There are tempting investment opportunities in Greece despite – or because of – the
economic crisis in Greece
•  Prices are expected to go down, thus making Greece a more attractive tourist destination
•  Real estate in privileged locations is up for sale
•  Hotels and other businesses are available for purchase at considerable discounts
•  The Greek government has made a serious commitment to attracting and facilitating foreign
investors
And let’s not forget:
•  There is no better time to visit Greece than now!
Rhodes and Santorini: Two different models for successfully developing coastal tourism in Greece presented by
Dr. Dimitris Koutoulas
33