Tourism on the Greek Islands: Issues of peripherality, competitiveness and development

The Aegean archipelago is the largest island complex in Europe, accommodating 500 000 Greek people, living on 95 inhabited islands. The region's economy depends heavily on tourism, as it is estimated that tourism's contribution varies between 50% and 90% of the Gross Regional Product. The Aegean has been an established destination since the 1960s, offering a great number of facilities. The traditionally built islands and the beautiful landscapes on the one hand, and the unspoiled sea on the other, make it a desirable destination. The major attractions are ‘sun, sand, sea, sex’ types of products, often augmented to take advantage of the cultural, heritage, natural, and historical resources, as well as the events and festivals taking place in the area. Both tourism enterprises and the destination as a whole experience an overdependence upon conventional distribution channels, and especially integrated tour operators, for delivering their products. As the majority of tour operators aim to reduce their prices in order to increase their competitiveness and market share, they constantly aim to minimise the profit margins of local principals. Consequently, despite the unparalleled environmental and heritage resources, the Aegean islands fail to attract the desired ‘high‐quality, high‐expenditure’ tourists. The deterioration of the tourism product and image leads to a lower willingness to pay by consumers, which consequently, leads to a further drop in quality, as the industry attempts to attract customers with lower prices. The concentration of bargaining power in European tour operators, in combination with the inability of the Greek tourism industry to promote itself effectively, inevitably reduce the profit margins of principals and their ability to yield decent returns on their investment. As a result, tourists' expenditure per capita deteriorates gradually, whereas their volume increases. Consequently, tourism enterprises find it difficult to operate and compete and the economic benefits for the destination deteriorate dramatically. Socio‐cultural and environmental impacts also decay local resources and jeopardise the sustainability of the region in the long term. It is therefore proposed that scientific research, political debate and community action should be utilised in order to rationalise the strategy for tourism on the Aegean Islands. This will enable the tourism industry to deliver the benefits it owns to its main stakeholders in the new millennium. Copyright © 1999 John Wiley & Sons, Ltd.