Greece is undergoing profound change and reforming large parts of its economy to attract much needed investment and revenue. This includes an extensive maritime sector and the huge tourism industry, of which the cruise business is an important part of both. Greece's Deputy Minister for Culture and Tourism Giorgos Nikitiades granted an exclusive interview to Cruise Business Review's John Pagni to outline what the new government has done to tackle structural problems and how it is laying down guidelines for the future, which will open up new opportunities for all players in the cruise industry.
Q: What is and has been the situation regarding cruise ship ports-of-call in Greece including past and present policy, the rules and regulations covering port fees and taxes, cruise ship terminals, services and those on the way?
A: The geographical maritime characteristics of Greece have always been popular and attracted cruise tourism because of the great diversity of the Greek islands and coastal regions. Cruise ships have, in fact, been coming to Greek ports since the 1950s. Of course, cruise tourism and cruise ships have evolved and developed technologically, especially in the last few years, resulting in the necessity to modernize and improve Greek ports' infrastructure so that they are able to serve the newer ships and the larger number of passengers they bring. There is enormous scope for the exploitation of ports and new port infrastructure is already developing in different areas, both on the Ionian Sea coast as well as along the Adriatic and Aegean seaboards.
On pricing policy, at Piraeus for example, the fee includes services at a lower rate than other European ports and will remain at competitive levels, rendering it a popular destination for cruise companies. We have taken the first important steps for maritime tourism, its infrastructure, passenger facilities, land services and we will continue to do so.
Q: When you visited Finland, you mentioned Greece's cabotage policy, which had a negative effect on cruise ship visits and had resulted in Athens/Piraeus losing its number one spot as the most popular port of call in the Mediterranean to Barcelona. Please explain what is being done to remedy the situation.
A: Removing the cabotage restrictions was the first major piece of legislation for Greece's cruise tourism and concerns the lifting of restrictions on the disembarkation and embarkation of cruise ship passengers in Greek ports regardless of their flag. Until recently, this allowed only ships flying the flag of an EU-member country, and as you know, eight out of ten ships have a third-country flag. The result of this protectionism was to deprive our national economy of 80% of the income that it could have had from this sector.
Piraeus continues to be the largest port for passenger movements in Europe and ranks third in size worldwide, since it is estimated that 21 million passengers are served annually. I would agree that, as a cruise port, Piraeus has lagged behind in terms of modernization in comparison with Barcelona and other Mediterranean ports. It has, however, proceeded with the upgrading of its facilities and a new passenger terminal of 3,900 square meters is under development.
Q: What makes Greece an attractive cruise ship port-of-call in your opinion, and what does the government intend to do to rectify the situation, as already described, to win back as many cruise companies and passengers as possible?
A: Our country's Mediterranean climate with the longest periods of sunlight in all of Europe, the calm seas, the unique monuments of ancient and Byzantine Greek culture, the way of life and entertainment, hospitality, diverse activities and attractions—all these constitute powerful motives for the cruise passenger to come ashore at Greek ports.
We are in constant touch with cruise company executives. In fact, we recently agreed with the board of the European Cruise Council for the establishment of an advisory committee aiming to review problems in cruise tourism and suggest improvements. This collaboration is directed at maximizing growth in maritime tourism in Greece. As an example, here at the ministry, we have ensured that over 200 of the country's national cultural monuments are open to visitors from morning until late afternoon. And we have made exceptional provisions for cruise passengers to visit archaeological sites during official holidays. Our country has all the preconditions in order to be at the forefront of world cruise-tourist destinations, and we are working systematically to achieve that.
Q: Will the privatization of ports, especially the passenger side, be allowed to bring in much needed investment plus cruise-ship service attitudes and skills? Will there be room for so-called public/private partnership projects?
A: We will examine all investment plans submitted by investors and then decide after taking into consideration the interests of the Greek economy. However, I do not see any reason why we would reject, for example, the investment proposal of a group of cruise companies, which would want to proceed with the construction of a passenger port terminal in return for the management of that project for 10, 20 or even 30 years.
Simultaneously, there are likely to be investments that will result from PPP projects and common economic collaboration. The government and Prime Minister Giorgos Papandreou personally are fully committed to exploit state properties and resources, and to this end we will apply our strategy for cruise tourism, and we maintain continuous contact with interested investors.
Q: An article in an international news weekly magazine quoted a World Bank survey that doing business in Greece ranked 109th out of 183 countries. Will this area be reformed to encourage cruise companies to become partners in on-shore facilities and services? Cruise companies build and operate terminals in the Caribbean and organize the excursions there, for example.
A: In recent meetings we have had in Greece with senior executives of the larger cruise companies, they have expressed a keen interest to actively participate in investment programs for the development of cruise-tourism infrastructure. I would also like to mention that Piraeus Port Authority has announced an ambitious investment program with a €500 million budget, which concerns the expansion of the port with the construction of six new cruise berths for new-generation vessels, the building of an exhibition and conference center, and the transformation of existing structures into a five-star hotel and the addition of two new passenger terminals.
Similar development projects are planned to take place at other ports in the country. We are open to proposals by cruise companies on these. These projects will come quickly to fruition with the application of the new legal framework [Fast Track Investment Law], which considerably facilitates investors’ plans with the bureaucratic procedures and with government intervention for the speedy issuance of the required permits.
Q: Would Deputy Minister Nikitiades wish to add anything in the context of the cruise ship business in Greece supported by statistics?
A: In the top spot for the number of cruise ship calls, the most popular Greek port [last year] was Piraeus, which totaled 805 ships with 1,864,657 passengers. Second was Santorini with 682 ships and 763,783 passengers aboard and a similar number [770,990] was recorded by the Port of Katakolon. Then came the ports of Mykonos [662,713], Rodos [577,044] and Corfu [565,686].The average time spent ashore by passengers varies depending on the port and on the coastal attractions, but an average is about eight or nine hours.
The cruise passenger market is of great interest to us; it is estimated each passenger that goes ashore spends on average €70 to €80. If, however, that passenger boards from a Greek homeport, the amount of money spent can multiply by up to a factor of five.
Our government, following our new strategy for tourism, has already begun collaboration with all cruise companies that are active in the Mediterranean and internationally. Members of the government, including myself, have attended cruise-tourism conferences and events, such as Cannes and Miami, and Greece will continue to be represented at such occasions.
Collaboration with cruise companies aims to continue the development of cruise tourism in Greece, the addition of new ports-of-call and the establishment of homeports. Cruise companies have expressed the desire to invest in port infrastructure, which constitutes important encouragement for the development of cruise itineraries.
Greece was in first place for cruise passengers in the Mediterranean in 2009, but lost the top spot in 2010. We hope to regain the number one position and will spare no effort in order to make our country an ideal cruise-tourism destination, with all the necessary services and facilities and to be a buzzing hub of cruise vessels and cruise tourists.