Hoteliers say Greek riots prompted thousands of booking cancellations, hurting key industry

Athens hoteliers say Greek riots emptying rooms

ATHENS, Greece — Images of flaming buildings and riots in Athens during last week’s protests in debt-ridden Greece have taken an early toll on the country’s vital tourism industry, hotel owners said Thursday.

About 20,000 overnight stays at hotels in Athens and nearby resorts have been canceled since May 5 riots that left three people dead, according to the local hoteliers’ association.

The setback reveals persisting challenges for Greece’s battered economy, despite a €110 billion ($138 billion) international rescue program that staved off bankruptcy. A painful austerity program taken to secure the aid is expected to keep the economy in recession until 2012, while unemployment has hit new records.

Greece has little heavy industry and a large trade deficit. But tourism accounts for an estimated 17 percent of annual economic output and one in five jobs, and a significant drop could cost more jobs and slow the country’s way out of recession.

“There is clearly a significant fall in our clientele and the trend for cancellations is rising,” Yiannis Retsos, head of the Athens and Attica Hoteliers’ Association, told The Associated Press.

“We have clients calling us up to ask whether there is still a revolt going on,” he said. “The footage of the riots and the burnt bank has been played repeatedly for days on international media. Your average American thinks that Athens is continuously burning.”

Violent protests broke out after the government announced harsh austerity measures — including salary and pension cuts — that have deepened Greece’s recession but were needed to secure the rescue loans.

About 100,000 people took part in the May 5 protest during a general strike, when three bank employees died after becoming trapped in a burning building torched by rioters. Extensive clashes saw 15 civilians and 41 police injured, in what the government called “a black day for democracy.” Unions have called a new general strike for May 20.

The hoteliers’ association said the cancellation data concerned just 68 of the area’s 450 hotels, and included group and conference bookings.

“The most worrying thing is that the rate of new bookings has frozen, during a couple of months that are traditionally the best for (tourism) in the greater Athens region,” it said in a statement. “There is also a significant drop in new bookings throughout Greece, which is due to international reaction as long as the situation in our country is seen as uncertain.”

An estimated 14.9 million people visited the Mediterranean country in 2009, drawn by its perennial lure of sun, beaches and ancient sites. That was still about 1 million fewer than in 2008, and 1.2 million down from 2007.

“We want people to understand that right now in these times of hardship, when tourism must serve as a significant source of economic growth, the situation must change because this does not just affect Athens but also the entire country,” Retsos said.

He also urged the government to pay its advertising debts to foreign media, which he said influenced their coverage of events.

The labor unrest has also hit cruise tourism. Last month, communist unionists stopped several hundred mostly Spanish tourists from boarding a cruise ship, in a dispute over labor reforms. The ship owners threatened to stop cruises to Greece, in a move the country’s association of tourism enterprises said could cost 400 jobs and €10 million ($12.6 million) in revenues.

Faced with the second highest budget deficit and public debt in the 27-member European Union, the governing Socialists have pledged to save €30 billion ($37.76 billion) over the next three years by cutting pensions and civil service pay, reforming the generous social security system and fighting tax evasion.

The finance ministry on Thursday said it had found more than a third of 150 doctors investigated in an expensive part of Athens had cheated tax authorities. It said the doctors, who declared annual income of as low as €300 ($377), could have their practices closed down.

The ministry also named 11 doctors who it said were fined a total of more than €4 million ($5.03 million) for alleged tax violations.

Meanwhile, Greece’s Statistical Authority said Thursday that unemployment shot up to a new five-year high of 12.1 percent in February. In comparison, the joblessness rate was 11.3 percent in January and 9.1 percent in February 2009.

A total of 605,277 people were unemployed in February 2010, around 38,000 more than in January.