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Financial Troubles in Popular European Travel Destinations: Can Tourism Help?

Some of Europe’s most popular tourist destinations have been hard hit in the recent economic crisis. At the same time, the recent political unrest in the Middle East and North Africa has opened doors for less tumultuous Mediterranean countries to attract thousands of new visitors. As a result of the economic downturn, there are many bargains now available to travelers in countries such as Greece, Spain and Portugal. Hotels, airlines and many tourist services have slashed their prices to attract tourists, yet the risk of social unrest continues to deter many travelers from visiting such financially troubled destinations. Is this a reason for travelers to stay away or can tourism be a key to helping these struggling economies get back on track?

According to The Guardian, tourism already accounts for about 10 percent of gross domestic product in Spain and Portugal. In Greece, one in five people works in the tourism industry, which makes up about 18 percent of the economy. To ease the impact of the economic crisis, these countries are investing in greater measures in their tourism industries. For example, Greece typically attracts about 52 percent of its visitors between July and September, with other seasons seeing very little visitation, according to the tourism ministry. This disparity puts a tremendous amount of pressure on infrastructure during those peak times. To encourage travelers to visit year round, Greek tourism officials are trying to prioritize alternatives such as agritourism and religious tourism. In addition, Greece has waived landing and takeoff fees for aircraft, lifted visa restrictions for non-EU citizens and taken steps to facilitate foreign investment in the tourism sector.

Madeira's tourism revenue alone accounts for a significant portion of Portugal's total gross domestic product. Photo courtesy of Antonio Spinola, regional director of Tourism Maderia.

With almost 13 percent of its population engaged in tourism, Spain is targeting new markets from which to draw travelers and revenue. “Spain aspires to be the preferred tourist destination for India,” said Deputy Minister of Tourism Joan Mesquida Ferrando, according to the Indian travel trade website Express TravelWorld. To this end, the Spanish tourism institute, TurespaÒa, has established a Facebook page for India and is giving the Indian film industry priority in movie partnerships. Along with an e-newsletter for the trade market, TurespaÒa also recently launched a “Spain Addict” website with customized versions for various countries, including India.

“We have a resource that is better than oil: our weather, our landscapes, our culture and our gastronomy, which are unlike any other in the world,” Spain’s Industry, Trade and Tourism Minister Miguel Sebastian stated during an official visit to the Canary Islands in April, the Associated Press reported.

In Portugal, U.S. Ambassador Allan Katz believes attracting more American tourism could help reset the country’s economy. Speaking at a seminar on Tourism and Security in July, Katz noted that Portugal offers all the things U.S. travelers are looking for in Europe – history, good food, and good wine – yet most Americans know very little about the country.

Yet even without a growth in the American market, things are looking up for Portugal, with an increasing number of visitors from countries such as France, Germany, Spain, Brazil and the United Kingdom, according to Frederico Costa, executive director of the Portuguese tourism board, Turismo de Portugal. “A conservative estimate for 2011 would be an increase of something between five and 10 percent in visitor numbers and anything up to five percent more bed-nights,” Costa told the global travel industry news service eTurboNews in September. “We’re also expecting tourism receipts to rise by as much as five percent this year. 2010 was the turnaround year in terms of tourist numbers and, although some regions are slower to pick up than others, we’re optimistic that 2011 is going to be a positive year.”

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