School of Social Sciences

Master’s Degree Programme in Business Administration

Postgraduate Dissertation

Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

George P. Kremmydas

Supervisor: Emmanouil Adamidis

Patras, Greece, June 2018

© Hellenic Open University, 2018 The content of this thesis/dissertation along with its results is owned by the Hellenic Open University and his/her author, where each of them has the sole and exclusive right to use, reproduce, and publish it (totally or partially) for educational or research purposes, with the obligation to make reference to the thesis’s title, the author’s name and to the Hellenic Open University where the thesis / dissertation was written.

Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

George P. Kremmydas

Supervising Committee

Supervisor: Co-Supervisor: Emmanouil Adamidis Dimitrios Manolopoulos University of Patras Athens University of Economics & Business

Patras, Greece, June 2018 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

To Panagis, Paraskevi and Eri for making everything possible!

Acknowledgments

There is no parthenogenesis in all human endeavor and this work is not an exemption. Inspiration for investigating further into this topic came from my participation as an employee in the board of directors’ meetings and the activities of the Regional Union of Municipalities of Ionian Islands which quite often are related to tourism. The President and the members of the board of directors as well as my colleagues in the Regional Union of Municipalities of Ionian Islands provided valuable help and support for the completion of this work for which I am indebted. I want to thank all and each of the interviewees for willingly providing their valuable time as well as invaluable information for preparing this work. My two colleagues from the Local Branch of Kefalonia had a special contribution to this work: Maria Voutsina introduced me to the fascinating world of the hospitality industry and Andreas Zapantis provided valuable feedback and advice at various stages during the preparation of this work. I thank them both! Last, but not least, I would like to thank my family for all the support and understanding they provided me with and promise to them that this is the last degree ever! I spent enough time trying to understand this world it is now time to try change it… …(a bit!)

Postgraduate Dissertation iv George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

Abstract

Tourism has a significant contribution to the Greek economy. Public sector involvement affects the quality and value of the final tourism product and due to its importance is sought by the private sector. The actions and interaction of both sectors and the way they shape their strategic planning and strategic management is complex and interesting from both a theoretical and practical perspective. Using the Ionian Island Region as a case study, qualitative methods were employed in combination with primary data and sources analysis (public records, statistical data, documents, meeting minutes, legal framework etc.) in order to identify strategic management approaches, inefficiencies and/or good practices.

An important point for investigation is whether the two sectors fully understand the extent to which their strategic decisions influence each other and whether formal channels and procedures for communicating and perhaps coordinating their strategies exist. Public sector involvement was examined at the municipal, regional and state level. At the state level the legal framework, development planning and the implementation of EU policies are important determinants. At the regional and municipal level, the management of infrastructure and services to the citizen / visitor is the main focus. In the private sector the existence of many small enterprises is addressed by referring mainly to the corresponding professional associations.

This work is attempting a first approach in understanding public-private sector interaction in tourism industry and provides useful information for establishing formal procedures and practices that could improve and extend it. Past experiences of public-private sector collaboration in prefectural and regional level as well as present good practices in strategic management and analytic approaches in tourism can be exploited in this direction while further qualitative and quantitative research is necessary.

Keywords

Tourism, public sector, private sector, strategic management, municipalities, Ionian Islands Region

Postgraduate Dissertation v George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

Περίληψη

Ο τουρισµός έχει σηµαντική συνεισφορά στην ελληνική οικονοµία. Η συµµετοχή του δηµόσιου τοµέα επηρεάζει την ποιότητα και την αξία του τελικού τουριστικού προϊόντος και εξ’ αιτίας της σηµασίας της είναι επιθυµητή από τον ιδιωτικό τοµέα. Οι δράσεις και η αλληλεπίδραση των δύο τοµέων και ο τρόπος που επηρεάζουν τον στρατηγικό σχεδιασµό και τη στρατηγική διαχείριση είναι σύνθετες και ενδιαφέρουσες τόσο από θεωρητική όσο και από πρακτική σκοπιά. Χρησιµοποιώντας την Περιφέρεια Ιονίων Νήσων ως µελέτη περίπτωσης, εφαρµόστηκαν ποιοτικές µέθοδοι σε συνδυασµό µε την ανάλυση πρωτογενών δεδοµένων και πηγών (δηµόσια έγγραφα, στατιστικά δεδοµένα, τεκ µήρια, πρακτικά συνεδριάσεων, νοµικό πλαίσιο κλπ.) µε σκοπό τον εντοπισµό προσεγγίσεων στρατηγικής διαχείρισης, αναποτελεσµατικότητα και / ή καλές πρακτικές.

Σηµαντικό σηµείο έρευνας αποτελεί το κατά πόσο οι δύο τοµείς κατανοούν πλήρως την έκταση στην οποία οι στρατηγικές τους αποφάσεις επηρεάσουν ο ένας τον άλλον και αν υπάρχουν επίσηµα κανάλια και διαδικασίες επικοινωνίας και ίσως συντονισµού στρατηγικής. Η συµµετοχή του δηµόσιου τοµέα εξετάστηκε στο επίπεδο Δήµου, Περιφέρειας και Πολιτείας. Στο επίπεδο της Πολιτείας το νοµικό πλαίσιο, ο αναπτυξιακός σχεδιασµός και η υλοποίηση πολιτικών της Ευρωπαϊκής Ένωσης είναι σηµαντικοί παράγοντες. Στο επίπεδο Περιφέρειας και Δήµου η διαχείριση υποδοµών και υπηρεσιών προς τον πολίτη / επισκέπτη είναι στο επίκεντρο. Στον ιδιωτικό τοµέα η ύπαρξη πολλών µικρών επιχειρήσεων αντιµετωπίζεται µε την αναφορά κυρίως στους αντίστοιχους συλλογικούς επαγγελµατικούς φορείς.

Η παρούσα εργασία επιχειρεί µια πρώτη προσέγγιση για την κατανόηση της αλληλεπίδρασης δηµόσιου – ιδιωτικού τοµέα στην τουριστική βιοµηχανία και παρέχει χρήσιµες πληροφορίες για την θέσπιση τυπικών διαδικασιών και πρακτικών που θα µπορούσαν να την βελτιώσουν και να την επεκτείνουν. Προηγούµενες εµπειρίες συνεργασίας δηµόσιου – ιδιωτικού τοµέα σε νοµαρχιακό και περιφερειακό επίπεδο καθώς και τρέχουσες καλές πρακτικές στην στρατηγική διαχείριση και στις αναλυτικές προσεγγίσεις στον τουρισµό µπορούν να αξιοποιηθούν προς αυτή την κατεύθυνση ενώ περεταίρω ποιοτική και ποσοτική έρευνα είναι απαραίτητη.

Λέξεις – Κλειδιά

Τουρισµός, ιδιωτικός τοµέας, δηµόσιος τοµέας, στρατηγικό µάνατζµεντ, Περιφέρεια Ιονίων Νήσων, Δήµοι

Postgraduate Dissertation vi George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

Table of Contents

Acknowledgments ...... iv Abstract ...... v Περίληψη ...... vi Table of Contents ...... vii List of Figures ...... xi List of Tables ...... xii List of Abbreviations & Acronyms ...... xiii 1. Introduction ...... 1 2. Methodological approach ...... 3 2.1 Stating the problem, defining core methodology ...... 3 2.2 Main research questions ...... 4 2.3 Qualitative research: semi-structured interviews ...... 4 2.3.1 Justification of qualitative research and using interviews as a tool ...... 4 2.3.2 Selection of interviewees ...... 5 2.3.3 Interview structure...... 6 2.3.4 Interview implementation and processing ...... 6 2.3.5 Information on the interviews conducted ...... 7 2.4 Sources of information ...... 7 2.5 Processing data and information from interviews and other sources ...... 8 2.6 Limitations of methodology ...... 9 2.6.1 Scope and depth ...... 9 2.6.2 Extend and resources ...... 9 2.6.3 Bias ...... 10 3. A global perspective: international practices and literature review ...... 11 3.1 What is strategy ...... 11 3.2 The strategic process ...... 11 3.3 Strategic planning versus strategic thinking ...... 11 3.4 Strategy in tourism ...... 12 3.5 The strategic process in the public and the private sector ...... 13 3.6 Public sector, private sector and tourism ...... 14 4. The tourism product of the Ionian Islands Region ...... 16 4.1 The Region ...... 16 4.2 The islands ...... 19 4.2.1 Corfu ...... 19 4.2.2 Paxoi ...... 19 4.2.3 Lefkada ...... 19 4.2.4 Meganisi ...... 19 4.2.5 Kefalonia...... 20 4.2.6 Ithaca ...... 20

Postgraduate Dissertation vii George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

4.2.7 Zakynthos ...... 20 5. Contribution of the public sector ...... 22 5.1 Introductory remarks ...... 22 5.1.1 Public sector hierarchy ...... 22 5.1.2 Public sector: scope of this work ...... 22 5.2 EU policies and strategies in tourism ...... 22 5.2.1 EU Tourism Policy ...... 23 5.2.2 EU funding of tourism-related activities ...... 25 5.2.3 Regional and local actors and EU policies ...... 26 5.3 Government policies in tourism...... 26 5.3.1 Ministry of Tourism ...... 26 5.3.2 Greek National Tourism Organization (GNTO) ...... 28 5.3.3 GNTO Strategy for Promotion and Advertisement ...... 29 5.3.4 Hellenic Chamber of Hotels (HCH) ...... 30 5.3.5 Tools for implementing central government policies and strategies...... 30 5.3.6 Regional and local actors and central government policies...... 31 5.4 Regional and local strategies in tourism ...... 32 5.4.1 Structure and function of regional and local authorities ...... 32 5.4.2 The regional authorities ...... 32 5.4.3 The local authorities ...... 33 5.4.4 The role of local and regional authorities in tourism ...... 33 6. Public sector approaches: empirical research results...... 35 6.1 The Regional Authorities' approach to strategic planning in Tourism ...... 35 6.1.1 Strategy content ...... 35 6.1.2 Strategic process...... 36 6.1.3 Resources for strategy ...... 38 6.1.4 Legal framework / environment ...... 38 6.1.5 Secondary actions related to tourism strategy ...... 39 6.1.6 Evaluation of strategy ...... 40 6.1.7 Documentation ...... 41 6.1.8 Channels with public / private sector ...... 42 6.1.9 Partnerships with private sector ...... 42 6.1.10 Formal channels of consultation ...... 43 6.1.11 Cooperation with municipalities ...... 43 6.1.12 Agreement on strategy with municipalities ...... 43 6.1.13 Views on private sector strategy ...... 44 6.1.14 The role of major businesses ...... 44 6.1.15 Need to change public – private cooperation...... 45 6.1.16 Prospects of Ionian Islands / position ...... 45 6.1.17 Vision – what needs to be accomplished ...... 46 6.2 The Municipalities' approach to strategic planning in Tourism ...... 46 6.2.1 Strategy content ...... 47 6.2.2 Strategic process...... 48 6.2.3 Resources for strategy ...... 48 6.2.4 Legal framework / environment ...... 49 6.2.5 Secondary actions related to tourism strategy ...... 49

Postgraduate Dissertation viii George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

6.2.6 Evaluation of strategy ...... 50 6.2.7 Documentation ...... 50 6.2.8 Channels with public / private sector ...... 51 6.2.9 Partnerships with private sector ...... 51 6.2.10 Formal channels of consultation ...... 51 6.2.11 Cooperation with Regional Authorities ...... 51 6.2.12 Agreement of strategy with Regional Authorities ...... 52 6.2.13 Views on private sector strategy...... 53 6.2.14 The role of major businesses ...... 54 6.2.15 Need to change public – private sector cooperation ...... 54 6.2.16 Position and prospects of Municipality and the Ionian Islands ...... 54 6.2.17 Vision, what needs to be done ...... 54 7. The private sector in tourism ...... 56 7.1 The structure of the tourism private sector ...... 56 7.1.1 The heterogeneity of tourism ...... 56 7.1.2 General structure ...... 56 7.1.3 Accommodation: Greek law categories...... 57 7.2 Tourism Associations and Employer’s Associations ...... 58 7.2.1 Tourism Associations ...... 58 7.2.2 Tourism Employer’s Associations ...... 59 7.3 Greek Tourism Confederation (SETE) ...... 59 7.3.1 Brief history of SETE ...... 59 7.3.2 Member Unions ...... 60 7.3.3 Institute of the Greek Tourism Confederation (INSETE) ...... 60 7.4 Hotel associations ...... 61 7.4.1 Hellenic Chamber of Hotels (HCH) ...... 61 7.4.2 Hellenic Hoteliers Federation ...... 61 7.4.3 Local Hotel Associations ...... 62 7.5 Non-primary hotel associations ...... 62 7.5.1 Greek Confederation of Tourist Accommodation Enterprises ...... 62 7.5.2 Local Federations of Tourist Accommodation Enterprises ...... 62 8. The private sector and the strategy of tourism: empirical research results ...... 64 8.1 Content of strategy ...... 64 8.2 Strategic process ...... 66 8.3 Resources for strategy ...... 66 8.4 Legal framework / environment ...... 67 8.5 Secondary strategies ...... 67 8.6 Evaluation of strategy ...... 67 8.7 Channels with public sector...... 67 8.8 Formal channels of consultation ...... 68 8.9 Cooperation with other associations ...... 68 8.10 Agreement of strategy with public sector ...... 69 9. Public-private sector actions & interaction in the strategic management of tourism . 70 9.1 Past experience and current affairs ...... 70

Postgraduate Dissertation ix George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

9.1.1 Prefectural Committees for Tourism Promotion ...... 70 9.1.2 Ionian Islands Tourism Company (ETIN) ...... 71 9.1.3 Municipal Tourism Committees ...... 75 9.2 Regional-level interactions ...... 77 9.2.1 Regional Authorities: private sector partnerships ...... 77 9.2.2 Regional Union of Municipalities of Ionian Islands ...... 78 9.2.3 Central Union of Municipalities ...... 78 9.3 Strategic management perceptions and practices ...... 79 9.3.1 Public sector ...... 79 9.3.2 Private sector ...... 80 9.4 Harmony and conflict ...... 82 9.5 Lessons for the future ...... 84 10. Conclusions ...... 85 10.1 Summary ...... 85 10.2 Discussion and evaluation ...... 86 10.3 Proposals – practical implications ...... 86 Bibliography ...... 88

Postgraduate Dissertation x George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

List of Figures

Figure 1 A screen shot of the standalone Zotero application. References can be organized in collections (left panel). For each of the references listed (central panel) the associated PDF file or web-page snapshot can be attached, while the reference fields, related notes and tags can be previewed (right panel)...... 8 Figure 2 Zotero - Microsoft® Word integration...... 9 Figure 3 Map of the region of Ionian Islands...... 17 Figure 4 Extract of the section on economy and tourism from the recent Annual Report of the Region of Ionian Islands...... 41 Figure 5 Poster of the forthcoming 5th annual Festival of Gastronomy in Lefkada. The Festival is co-funded and co-organized by public and private sector entities...... 78 Figure 6 The poster of the International Conference on Health Tourism organized by KEDE in Ithaki on 26-27 May 2017...... 79

Postgraduate Dissertation xi George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

List of Tables

Table 1 Permanent population (2011 Census), area (in km2) and population density for the Ionian Islands Region (table adapted from RII, 2017)...... 16 Table 2 Hotel units, rooms and beds per hotel star-category, regional unity and municipality in the Region of Ionian Islands. Data for 2017. Source: Hellenic Chamber of Hotels...... 18 Table 3 Shareholders of Ionian Islands Tourism Company S.A. as of 18/5/2012. The table was adapted from the company’s list of shareholders...... 72

Postgraduate Dissertation xii George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

List of Abbreviations & Acronyms

EETAA ...... Hellenic Agency for Local Development and Local Government1 ELIME ...... Hellenic Ports Association ETIN ...... Ionian Islands Tourism Company EU ...... European Union GEPOET ...... General Pan-Hellenic Federation of Tourism Enterprises GG ...... Government Gazette (in Greek: Φ.Ε.Κ.) GMA ...... Greek Marinas Association GNTO ...... Greek National Tourism Organization GSRA...... Greek Car Rental Companies Association HACA ...... Hellenic Air Carriers Association HAPCO ...... Hellenic Association of Professional Congress Organizers HATEOA ...... Association of Hellenic Outdoor Activities Enterprises HATTA ...... Hellenic Association of Travel & Tourism Agencies HCH ...... Hellenic Chamber of Hotels HHF ...... Hellenic Hotel Federation HPYOA...... Hellenic Professional Yacht Owners Association ICT...... Information and Communication Technologies INSETE...... Institute of the Greek Tourism Confederation KEDE...... Central Union of Municipalities PEDIN ...... Regional Union of Municipalities of Ionian Islands PIN...... Region of Ionian Islands S.EP.O.A...... Association of Organized Branded Food Service Chains SAAE ...... Hellenic Association of Airlines Representatives SEEN ...... Association of Passengers Shipping Companies SETE ...... Greek Tourism Confederation SETKE ...... Confederation of Entrepreneurs of Greek Tourism Enterprises

1 In certain cases, the corresponding Greek abbreviation / acronym in Latin characters is used (e.g. PEDIN for Regional Union of Municipalities of Ionian Islands from ΠΕΔΙΝ i.e. Περιφερειακή Ένωση Δήµων Ιονίων Νήσων) instead of using the abbreviation / acronym of the corresponding English translation of the expanded name (e.g. RUMII in the case of PEDIN). This is done because the Greek abbreviation / acronym is commonly used in everyday communication or because the corresponding organization uses the Latin version of the Greek acronym / abbreviation in electronic and / or printed documents in English.

Postgraduate Dissertation xiii George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

WTO ...... World Tourism Organization (also UNWTO: United Nations’ WTO)

Postgraduate Dissertation xiv George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

1. Introduction

Tourism is a major contributor to the Gross Domestic Product of Greece and a valuable drive for development and employment in related areas of the economy (INSETE, 2017; SETE, 2018). The very nature of the tourism industry makes it unique in the sense that the involvement of the public sector is regarded as absolutely necessary and not as an anathema as in other sectors of the economy. This is because many aspects of the tourism industry (infrastructure, environment, culture etc.) remain the responsibility of the government (central or local) even in the most “liberalized” economies. Therefore, the strategies and actions of both the public and the private sector interact in many ways in order to shape the final tourism product of a country or region. The way strategies are formed, implemented and modified in both sectors as well as the complex multilevel and hierarchical interactions of the actors and strategies involved is a significant determinant of success in the highly competitive and globalized tourism industry. The structure and efficiency of the public sector, the fragmented nature of the private sector in the field of tourism as well as the political, financial, legal and international environment are all factors contributing to the final outcome (Tribe and Hall, 1995; Elliott, 1997; Bramwell and Lane, 2000; Kerr, 2003; Buhalis and Costa, 2006; Burns and Novelli, 2007; Laws, Agrusa and Richins, 2011). Understanding this complex interaction of public and private sector in the field of tourism is vital for maximizing their efficiency in improving the final tourism product and achieving sustainable development in the industry.

In this work we use the Region of the Ionian Islands in Western Greece as a case study in order to examine and understand the structure of the strategic process in the public and the private sector in the field of tourism. We focus on inter- and intra-sector interactions and their contribution to the regional strategy and the way this strategy affects the tourism product offered and the competitiveness and efficiency of the region in the global tourism market. Our aim is to analyze both the structure and functionality of the regional tourism industry of Ionian Islands using an analytical approach that tries to clarify the relative contribution of actors, actions and interactions.

Although the economic, legal, political, market, competitiveness and globalization environmental factors are vital for understanding the global as well as the local characteristics of the tourism industry it is the actions and interactions of local actors in the public and private sector that have a vital contribution in shaping the profile of the regional tourism market. The perceptions and hence reactions of the actors in both the institutional and individual level to the environmental factors significantly affect the mechanics of the strategic process at the regional level. Therefore, our methodological approached was aimed at gathering qualitative empirical data that focus on the perception/understanding, formation, implementation, evaluation and adaptation of the strategies by individual actors in both the public and the private sector within the complex framework of their interaction.

Key executives from the public and private sector were interviewed using a semi-structured interview approach (Jonker and Pennink, 2010). A set of predetermined questions was used in order to guide the interview towards the main research questions of this work while some freedom was allowed for discussion to help put the views expressed in context. The interviews were not recorded in order to allow for more freedom of expression for

Postgraduate Dissertation 1 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region interviewees. Notes were kept during the interview which were amended and extended, whenever necessary, right after the end of the interview. The manual notes were transferred to electronic text and were organized, tagged and cross-referenced using the simple word- processing tools available in Microsoft® Word software.

The analysis of the information available from the interviews provides significant insight into the mechanisms and interactions involved in the strategic process of the Greek tourism industry in both the public and the private sector.

The research methodology used in this work is presented in Chapter 2 along with the sources of information and tools used.

In Chapter 3 international practices in the interaction of public and private sector in the tourism industry are presented while the academic literature on the strategic process in the public and the private sector is reviewed.

The tourism product of the Ionian Islands Region as well as the parameters and factors contributing to its final form are presented in Chapter 4.

Public sector involvement in the formation of the tourism product is presented in Chapter 5, while the empirical research results obtained in this work for the approaches of the public sector in tourism strategic management are presented in Chapter 6.

The private sector role in shaping the characteristics of the regional tourism product is discussed in Chapter 7 where the main actors involved are presented. The empirical research results obtained for the strategy of the private sector in tourism together with its idiosyncrasies with respect to its strategic approaches are presented in Chapter 8.

The interaction of the public and private sector in the tourism industry of the Ionian Islands Region is discussed in Chapter 9. We focus on how each sector affects the strategic process of the other one and on how their strategies interact in order to form the resulting Regional strategy and tourism product.

In Chapter 10 the results of this work are summarized and discussed while future research directions are presented together with practical proposals for the collaboration of the two sectors in the Region of Ionian Islands.

Postgraduate Dissertation 2 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

2. Methodological approach

2.1 Stating the problem, defining core methodology

Tourism has a significant contribution to the Greek economy with the Ionian Islands Region being the second Greek Region in terms of the contribution of tourism to the GDP (SETE, 2018). Public sector involvement affects the quality and value of the final tourism product. Contrary to the established discourse in other sectors of the economy, this involvement is both necessary and welcomed by the private sector. The actions and interaction of both sectors and the way they shape their strategic planning and strategic management is complex and interesting from both a theoretical and practical perspective (Tribe and Hall, 1995; Elliott, 1997; Bramwell and Lane, 2000; Buhalis and Costa, 2006; Burns and Novelli, 2007; Laws, Agrusa and Richins, 2011).

From a theoretical perspective the nature and mechanics of the strategy process in both the private and public sector as well as their interaction in forming the joint strategy and the final product in the tourism industry is the main focus. From a practical perspective the main interest lies in finding solutions to problems arising from inefficiencies in the strategic cycle in the private or public sector or in the interaction / collaboration of the two sectors.

Thus, the main research themes that arise are: a) the analysis of the strategic process in each sector, b) understanding the interaction of the two sectors. Those themes are treated in the Chapter 3 where the literature is reviewed and international practices are presented.

Using the Ionian Islands Region as a case study, qualitative methods are employed in combination with primary data and sources analysis (public records, statistical data, documents, meeting minutes, legal framework etc.) in order to identify formal strategic management approaches, inefficiencies and/or good practices. A crucial point is whether the two sectors fully understand the extent to which their strategic decisions influence each other and whether formal channels and procedures for communicating and perhaps coordinating their strategies exist.

Public sector involvement will be examined at the municipal, regional and state level. At the State level the legal framework, development planning and the implementation of EU policies are important determinants. In the private sector the existence of many small enterprises is addressed by referring to the corresponding professional associations. This work could help in understanding public-private sector interaction in tourism industry and provide useful information for establishing formal procedures and practices that could improve and extend it.

Postgraduate Dissertation 3 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

2.2 Main research questions

In order to design the details of our methodological approach and clearly define the objectives of this work we had to select and clearly state the basic research questions. Those questions evolve around four main axes: A) How is strategic management planning and strategic decision-making being done in the public and private sectors of the Greek tourism industry? How does this modus operandi affect the final tourism product offered? B) What is the framework (legal, political, economic, international competition etc.) under which the two sectors operate and how do they interact with each other? How does their interaction affect their strategic management planning and decision- making processes? Are there / could there be any formal channels for cooperation / collaboration? C) What are the strategies of the two sectors for the development of tourism in the Region of Ionian Islands (infrastructure, marketing, services etc.)? Is there any plan for coordinated action(s) to achieve strategic goals? Is there any vertical collaboration / coordination within each of the two sectors (i.e. public sector: coordination of local authorities of first and second degree and central government and private sector: coordination of professional bodies like Chambers of Commerce, Hotel Unions, etc. with individual enterprises or clusters of enterprises)? D) Is there a need for changing the status quo in public – private sector collaboration for strategic planning in the tourism industry for the Region of Ionian Islands? What steps should be taken?

These main research questions where used as a guide in order to design the structure of the interviews (see the following sections) as well as the roadmap of the background research in the sources of information available to us.

2.3 Qualitative research: semi-structured interviews

2.3.1 Justification of qualitative research and using interviews as a tool Given the problem at hand and the main research questions outlined in the previous section the use of qualitative research approaches seemed more appropriate for our work with personal interviews being the tool of choice.

We seek to understand the strategic process and the interactions involved between public and private sector in the tourism industry. The complexity of the strategic process and of the interactions involved preclude the use of other approaches like questionnaires. There is a vast amount of information and details involved that even the smartest questionnaire design wouldn’t be able to capture. Even a well-structured rigid interview would miss important details. For this reason, we opted for a semi-structured interview approach: a core interview structure with a basic set of questions was designed before the interview but the design and the delivery of the questions left space for open discussion within the general area defined by the interview structure.

Postgraduate Dissertation 4 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

This approach has at least two advantages for our needs: it allows for a more comfortable and relaxed interview approach without losing track of the main information being sought and it offers the opportunity to gather information that would otherwise have been neglected. In almost all interviews the interviewees pointed out sources of information, events, key figures and actors, topics and issues of either primary or secondary interest to this work that were consequently searched and included. For example, public sector interviewees contributed valuable information about infrastructure supportive for tourism while private sector interviewees provided information for problems, issues and inefficiencies that are central to the tourism industry.

2.3.2 Selection of interviewees One important issue for the design of this research was to decide the set of interviewees. For this purpose, we took into account the following parameters: a) Strategy in the public sector is mainly decided by elected top officials and implemented by permanent staff. Officials can provide more information about the decision-making process and permanent staff about the implementation of strategy while both can – depending on the extent of their experience – provide information on strategy evaluation. b) The private sector in the Greek tourism industry is characterized by numerus small- sized enterprises (most of them family-operated) and only a few sized enterprises (big hotels etc.). The tourism related enterprises are organized in professional associations with elected board members while the sized enterprises play key role in the local economies and have clearer strategic views and understanding of the business environment than small family enterprises. Thus, both officials from professional associations and executives from large enterprises had to be interviewed. c) Understanding the hierarchical structure of the public and the private sector and the interactions of the actors involved in the tourist industry is important for selecting a representative set of interviewees. d) Each of the four larger insular municipalities (Corfu, Kefalonia, Lefkada, Zakyntos) and each of the three small insular municipalities (Paxoi, Meganisi, Ithaca) represent a different model and approach of tourism development. Thus, public and private sector representatives from each of the seven islands have to be interviewed in order to capture information related to the micro-strategies for each island.

Based on the above parameters the following list of prospective interviewees was devised (organized by sector and body in each sector):

A) Public sector i. Region of Ionian Islands 1. Regional Vice-Governor for Tourism 2. Regional Vice-Governor for each of the four regional Unities 3. Staff of the office for Tourism, Sports and Culture ii. Municipalities of the Ionian Islands (Corfu, Paxoi, Lefkada, Meganisi, Kefalonia, Ithaki, Zante) 1. Vice-mayors for Tourism of each Municipality, 2. Members of each Municipal Committee for Tourism,

Postgraduate Dissertation 5 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

3. Staff of each Municipality attached to the Vice-mayor for Tourism or to the Municipal Tourism Office, B) Private sector i. President of the Local Chamber of Commerce or board member in charge of tourism (Corfu, Lefkada, Kefalonia, Zante), ii. President or board member of the Association of Hotel Owners (Corfu, Lefkada, Kefalonia, Zante), iii. President or board member of the Association of Apartment Owners (Corfu, Lefkada, Kefalonia, Zante) iv. Owners or managers of sized enterprises in each of the four larger islands (Corfu, Lefkada, Kefalonia, Zante).

The interviewees were selected from the above list in order to ensure full coverage of public / private sector bodies and insular municipalities.

2.3.3 Interview structure The interview was designed and structured in a way that would cover the basic research questions (see section 2.2). In brief, the interview structure and the corresponding questions aimed to clarify the following issues: 1. The strategic plan of the public / private entity represented by the interviewee together with the mechanisms for constructing it and the resources put on it. 2. The views of the interviewee about the legal framework and how it affects the entity represented. 3. How the entity takes care of all secondary actions related to the strategic plan in tourism. 4. How the entity evaluates its contribution (effectiveness of the strategic plan) and by what methodology. 5. How the entity collaborates with entities of the opposite sector, through which mechanism and on what projects. How this collaboration could be improved and / or enhanced. 6. How the entity collaborates with entities within its own sector and how do their strategies relate to each other. 7. Does the entity / interviewee see a need in changing the interaction / collaboration of public – private sector and how. 8. What are the prospects of the insular municipality the entity operates in and the Region in general in the field of tourism. 9. What is the vision of the entity. What the interviewee / entity would wish to accomplish that has not already been accomplished.

2.3.4 Interview implementation and processing Each of the interviewees was contacted by telephone, email or in person in order to arrange a meeting for the interview. Before the interview each interviewee was handed a letter explaining in brief the title, purpose and context of this research work and provided the main research questions as outlined in section 2.2 above. During the interview the interviewee was handed a copy of the main questions (structure) which was used as a pathway for the semi-structured interview that followed. Deviations from the structure were allowed when necessary but all the main questions were delivered to the interviewee and always in the order of the printed sheet provided.

Postgraduate Dissertation 6 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

All interviews were conducted by the writer (in Greek) and in all cases only the interviewee was present. Following some initial research on the topic and after having consulted a few of the interviewees it was decided that the interviews will not be recorded and only notes will be kept during the interview. The main reason for this decision was that on-the-record interviews would affect the quality and information content of the responses thus withholding valuable information that would not otherwise have been made available. It was quite common for the interviewees to express personal opinions or reveal information that would have been sensitive if read in a political context or otherwise outside the academic context. Although it was not our aim to acquire sensitive or compromising information, nevertheless, wiping it out from the interviews by using a tape recorder would have altered dramatically the liberty and content of the information provided. The most interesting fact of all is that almost invariably the issues that our interviewees were reluctant to comment on, on the record could definitely be made available to us by other sources or comparison of interview data albeit with much more effort and in a less clear way.

Right after each interview the handwritten notes were transferred into Microsoft® Word format for archiving and further processing. The notes were extended wherever necessary in order to record and clarify points made during the interview that might later be forgotten. Further processing of the interview data was conducted using features of Microsoft® Word, Zotero and XMind tools (see section 2.5 on data processing).

2.3.5 Information on the interviews conducted The interviews were conducted from January till May 2018. Out of an initial catalogue of 54 prospective interviewees (26 in the public and 28 in the private sector) it was only possible to contact 38 of them within the time frame available for this study. Given the fact that the interviewees were located in all seven municipalities of the Ionian Islands and that the end of this project coincided with the beginning of the tourism period only 24 interviews were finally conducted. 12 interviewees represented the public and 12 interviewees represented the private sector.

From the total of 24 interviews, 22 where conducted in person by visiting the interviewees in their working places while one was conducted by phone and one by video-conference. Interviews took place in Corfu, Lefkada, Kefalonia, Zakynthos and Ithaki while the interviewees from Meganisi and Paxoi were interviewed in Lefkada and Corfu respectively. The duration of the interviews ranged from an hour to up to two hours maximum while the majority interviews lasted about one and a half hour. In many interviews – especially with interviewees representing the public sector – further documentation was provided by the interviewee in the form of internal documents, meeting minutes, brochures, publications etc.

2.4 Sources of information

The information provided by interviews was really important in understanding the mechanics and interaction of the strategic process in real-life but, nevertheless, a vast amount of information came from other sources that among others include: • Strategic planning documents • Decisions of governing boards • Publications

Postgraduate Dissertation 7 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

• Meeting minutes • Press releases • News in the media • Published studies and analysis • Internal documents from the entities contacted • Statistical bulletins

As noted earlier almost all interviewees have either directly or indirectly pointed towards and in certain cases provided one or more sources of information from the ones listed above and provided indispensable guidance for extracting valuable information.

Figure 1 A screen shot of the standalone Zotero application. References can be organized in collections (left panel). For each of the references listed (central panel) the associated PDF file or web-page snapshot can be attached, while the reference fields, related notes and tags can be previewed (right panel).

2.5 Processing data and information from interviews and other sources

Although at the beginning of this study software tools for qualitative research were evaluated (the evaluation included tools like NVIVO2) their use was finally rejected based on two factors: a) Our decision not to use recorded – transcribed interviews (in order to avoid self- censorship effects) limited the need for a qualitative research tool. b) The depth and scope of this work involved information and data that were manageable without using specialized qualitative research tools.

2 http://www.qsrinternational.com/nvivo/nvivo-products

Postgraduate Dissertation 8 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

The archiving, processing and analysis of the information and data required for this work was conducted with the use of the following tools:

1) Zotero3 (see Figure 1) is a reference management software application that allows gathering, organizing, processing and using bibliographic information and relevant research material. An important feature of this tool is that it allows the attachment of the corresponding original sources (PDF files, snapshots of webpages, text, image, video etc.) to each bibliographic / reference entry as well as user notes and keyword labeling. Since it provides browser integration it is an ideal tool for easily archiving, processing and using information from webpages, libraries, electronic publishers etc. 2) XMind4 is a software tool for mind mapping and brainstorming with management elements, complex information management etc. It provides mind maps, organization charts, tree and fishbone diagrams etc. 3) Microsoft® Word5 was used in order to transfer the handwritten notes from the interviews and the analysis of primary information sources into electronic text format. The review, commenting and cross-reference features of Microsoft® Word were used to organize and process our data. Zotero provides full integration for Microsoft® Word (see Figure 2) and thus the incorporation of citations, the automatic creation of reference lists and the instant access to original sources (articles, web pages etc.) was made Figure 2 Zotero - Microsoft® Word integration. possible at the press of a button. Moreover, XMind allows exporting mind-maps to Microsoft® Word as well as referencing files on disk (e.g. Microsoft® Word documents) and webpages.

2.6 Limitations of methodology

2.6.1 Scope and depth This work focused on the strategic process in tourism industry in both the public and private sector and the interaction between them in forming a regional strategy. For this purpose, the Ionian Islands Region was used as a case study. Although very interesting and challenging as a first approach the problem at hand needs successive iterations and dissecting parts that could be examined separately. For example, the contribution of the public sector and the contribution of the private sector could each be examined separately and in depth. The external environment (legal, international, economic, etc.) and its effect on the strategy of each sector deserves separate treatment.

2.6.2 Extend and resources One of the basic limitations of our methodology is the extent to which it could be applied in relation to the time and resources available to us. In the public sector more officials and

3 https://www.zotero.org/ 4 https://www.xmind.net/ 5 https://products.office.com/en/word

Postgraduate Dissertation 9 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region executives could be interviewed in order to get a more complete image. Moreover, officials at higher that the regional levels could be approached (e.g. GNTO, KEDE, Ministry of Development etc.). In the private sector the view of more representatives from individual enterprises could prove useful in understanding how the strategic process is materialized at the enterprise level and what is the immediate effect of public sector actions on them.

2.6.3 Bias There are at least two identifiable sources of possible bias in our work: a) For reasons that are not necessarily all that obvious, public-sector officials were more easily accessible for interview and devoted more time than representatives of professional associations or individual businesses. Thus, the public sector is over- represented in terms of interview data provided, despite the fact that an equal number of interviewees from each sector where finally interviewed. b) The writer is working for the Regional Union of Municipalities of the Ionian Islands, a private-law entity in the public sector representing the Municipalities of the Ionian Islands Region. Although this facilitated the access to information and officials for interviews and provided deeper understanding of the processes and interactions involved (providing ethnographic insight into this work) it is also responsible for bias in the study. On one hand the role and view-point of the public-sector might tend to be overstated. On the other hand, contacting officials and staff from public sector bodies while being the staff of such an entity might affect the outcome of interviews in both positive or negative ways and could also affect the liberty of expressing opinions and views on behalf of the writer.

Postgraduate Dissertation 10 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

3. A global perspective: international practices and literature review

3.1 What is strategy

The answer to the general question about what strategy really is, is not an easy one. Having its roots in the military, the concept of strategy in the context of business, has been used in many different ways and has received various definitions. In general strategy involves thinking for the future issues affecting organizations, while strategic management provides the concepts, frameworks, tools and techniques required for this purpose (Evans, 2015). According to Chandler’s definition, strategy involves determining long-term goals and objectives, adopting the appropriate courses of action and allocating the resources required for goal achievement (Chandler, 2003, p. 13).

3.2 The strategic process

Strategy is often referred to as a process because it is not a static phenomenon, it proceeds continuously, with its intermediate stages being revisited as the organization dynamically interacts with its internal and external environment (Evans, Campbell and Stonehouse, 2011; Evans, 2015; Thompson, 2015).

Depending on the author and context, the components and stages of the strategic management process vary. There are at least three general phases that form the strategic cycle: analysis, selection and implementation of strategy (Evans, Campbell and Stonehouse, 2011; Evans, 2015). The analysis of the internal and external environment of the organization precedes the selection of an appropriate strategy which is then implemented. During the implementation of the strategy and as conditions are changing the strategy is re- analyzed and different strategic choices are made and implemented and thus the cycle continues as the dynamical interaction of the organization with its environment proceeds.

Other authors (Mihiotis, 2005; Thompson, 2015) conceptualize the strategic process as a cyclic sequence of more detailed steps which include: 1. Setting the strategic vision, mission and the core values of the organization. 2. Deciding the strategic objectives of the organization. 3. Developing the appropriate strategy for achieving the objectives and the vision of the organization. 4. Implementing the strategy. 5. Monitoring and evaluating the strategy and correcting and revising any aspect of the strategic process at any of the previous steps.

3.3 Strategic planning versus strategic thinking

Since its introduction in the mid-60s, strategic planning was regarded as the optimum manner for strategy design and implementation. In strategic planning thinking is separated

Postgraduate Dissertation 11 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region from action: specialist “thinkers”, the strategic planners, are in charge of preparing optimal strategies together with action plans so that the “actors”, the managers, can successfully implement them. In practice strategic planning has quite often impeded strategic thinking as the strategic vision is obscured and confused by the quantitative and analytic approaches of planning. Successful strategies involve vision not mere plans (Mintzberg, 1994).

The application of planning in practice mainly involved programming i.e. the expression and expansion of existing visions and strategies whereas in strategic thinking the strategic process should capture what is learned and synthesize it into a vision for the organization. In real life, prediction of the future course of an organization is not possible, strategy-makers cannot be disconnected from the subjects of their strategies and the complete formalization of the strategy process is not possible (Mintzberg, 1994). These are the three main reasons that cannot make strategic planning a substitute for strategy making.

3.4 Strategy in tourism

One important consideration in the strategic management of tourism is the fact that tourism related products are mostly services rather than tangible goods. A number of features of the services distinguishes them from physical products (Evans, 2015): • Services are intangible, you cannot examine them by your senses. Marketing and promotion has to adapt to this reality. • Producing and consuming services in the tourism sector are inseparable. The consumer has a first-hand experience of the production process (e.g. cleaning a room, cooking a meal at a restaurant, welcoming visitors at a reception etc.) and therefore, there is no chance for correcting any errors before the consumer realizes them. • Due to inseparability the services are perishable: if they are not bought at the time of offer they perish and no income can be made. Balancing capacity with demand is very important. • Services are heterogenous, they cannot be identical as the human element and other factors affect their delivery. • Due to intangibility there is no ownership as it exists for physical products. The clients are paying for the use or for accessing something and this makes difficult to build relationship with the customer.

In addition to the above characteristics, tourism related services are usually of high cost, seasonal, interdependent, easy to enter/exit, they have social impact and they are affected by external shocks (Kerr, 2003; Murphy and Murphy, 2004; Moutinho, 2011; Evans, 2015).

One other important idiosyncrasy of the tourism industry is that competition in this sector is primarily the competition of destinations before it becomes the competition of (usually local) enterprises (Go and Govers, 2000). Therefore, the concept of destination governance and strategic management is important. The cooperation and collaboration of public-sector entities, private-sector associations and enterprises, the harmonization of policies and regional / local interests are issues of managerial, political and academic interest (Laws, Agrusa and Richins, 2011).

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3.5 The strategic process in the public and the private sector

When analyzing strategic management and the strategic process in the public and in the private sector a significant difference encountered concerns the clarity of strategic goals. In the private sector the strategic goals are centered around maximizing the returns on investment for the shareholders. The strategic goals for the public sector are often less well- defined, unquantifiable, and subject to alterations. This is not only due to the absence of clear profit quantification (e.g. return on investment, etc.) but also due to the fact that, often, numerous authorities and interest groups are involved as well as contradicting orders and principles (Rainey and Bozeman, 2000; Klein et al., 2013). The ability of the public sector in determining objectives has been recognized by researchers in the field of public administration and political science but strategic management research has not paid sufficient attention to the boundaries, internal structure, development and performance of public sector entities (Kivleniece and Quelin, 2012; Klein et al., 2013). Klein et al. (2013) examine the public sector through the prism of value creation and capturing in both sectors (private and public) and propose that examining the capabilities creation and leverage of public entities provides new means for understanding their behavior (Klein et al., 2013).

The mechanism through which decisions are made differs significantly in the public and the private sector (Rodrigues and Hickson, 1995; Nutt, 2006) and the same holds true for their success. For the private sector the success of this decision-making process is resource dependent: the availability of information and implementation resources are necessary. For the public sector the social qualities of the decision-making process are important: proper participation and lack of intervention from the top hierarchy increase the chances for success (Rodrigues and Hickson, 1995). Nutt (2006) uses a simulation study in order to compare the decision-making process in a public and a private sector entity and locate differences in the attitudes of mid-level managers. It is found that in the private sector an analysis based budget decision is more likely than in the case of bargaining while the opposite holds true for the public sector (Nutt, 2006).

The applicability of the concept of strategic management and the corresponding methods and tools to the public sector has been questioned given its origins in the private sector. Public sector entities differ from private sector ones as they have the ability to employ legal authority to achieve their aims, they operate in a political rather than an economic environment, they aim at creating public and private value and they have to share resources (including human ones) with other entities in the public sector (Alford and Greve, 2017). Alfrod and Greve (2017) propose that a public value based framework (Moore, 1995, 2013) would enable the application of strategic thinking in the public sector. According to Moore (1995, 2013) public sector managers have the mission of achieving high-value utilization of the assets that were placed under their authority. For this purpose public managers have to refer to the external environment that dictates the value and feasibility of endeavors and provides the appropriate resources (Moore, 2013).

Putans et al. (2012) showcasing Latvia as an example, argue that despite the emphasis on strategic plans the public sector shows delays or failures in strategy implementation whereas the private sector tends to focus and excel on short-term planning but underperforms on long-term strategies. Höglund and Svärdsten (2015) in their study of the Swedish Transport Administration point out that contrary to intentions and expectations the application of

Postgraduate Dissertation 13 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region strategic management approaches in the public sector makes the organization more centralized, attentive to short-term metrics and more inclined to operational issues. The authors attribute this to the influence of new public management discourse (focusing on efficiency, measurable output and cost etc.) which alters the intended changes sought by the application of strategic management in the first place and suggest that this discourse should be abandoned (Höglund and Svärdsten, 2015).

3.6 Public sector, private sector and tourism

Most of the research of the previous section (perhaps with the exception of Klein et al. (2013)) focuses on strategic management and the strategic process in either the public or the private sector and its comparison under the different circumstances pertaining to each sector. In this work we are also interested in the strategic interaction of the two sectors (something which Klein et al. (2013) look at under the light of value creation and capturing) and how this dynamic interaction shapes the general strategy and thus the image for the tourism product of a given destination. This is an important and non-trivial issue given the fact that public policymaking tends to be complex, disorderly and incontrollable and seems to defy efforts for developing a solid theoretical framework (Anderson, 2011).

Although the cooperation of public and private sector in the field of tourism is central in achieving common goals and merging policies and strategies (Dudensing, Hughes and Shields, 2011) inefficiency predominates (Andreu Guerrero and Rodriguez-Sanchez, 2012). The problems of collaboration in the tourism sector have been acknowledged as well as the problems involved in coordinating entities in the public sector, in coordinating the public and the private sector and in coordinating private enterprises (Jamal and Getz, 1995). Involving of the major stakeholders and reworking the collective decision-making process in the strategic management of destinations have been deemed necessary (Saxena, 2005). The basic tourism stakeholders include tourists, locals, entrepreneurs and regional/local government (Goeldner and Ritchie, 2012) while in a more detailed perspective the following stakeholders can be identified (Jamal and Getz, 1995): • local authorities, • public authorities involved in allocating resources, • Chambers of Commerce, • tourism associations, • organizations of locals (communities), • social agencies etc.

The tourism strategists have to take into account the views, interests of the stakeholders relative to their role in the development and promotion of the tourism destination (Sautter and Leisen, 1999). The development of destination strategies is dependent upon the availability of appropriate resources (d’Angella and Go, 2009). Globalization and the internet leave destinations more exposed to reputation-damaging events both related to the public and the private sector and thus knowledge and resource sharing is vital for retaining destination competitiveness (Andreu Guerrero and Rodriguez-Sanchez, 2012).

A consensus in tourism destination strategies and policies based on stakeholder cooperation has various potential benefits including: minimization or elimination of long-term costs of

Postgraduate Dissertation 14 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region stakeholder clashes (Saxena, 2005; Arnaboldi and Spiller, 2011), resource sharing among entities involved (Arnaboldi and Spiller, 2011), local control and sustainability (Saxena, 2005), coordination of policies and strategies and proactive measures for defending the destination from negative tourism impacts (Bramwell and Sharman, 1999). Resource and capability sharing can provide high degree of mutual learning for the stakeholders (Andreu Guerrero and Rodriguez-Sanchez, 2012).

Baum and Szivas (2008) examine the role of the government in human resource development for the tourism industry and point out that there is strong support for a national- level integrated approach.

Postgraduate Dissertation 15 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

4. The tourism product of the Ionian Islands Region

4.1 The Region

The Ionian Islands Region is one of the thirteen regions of Greece (see map in Figure 3). It is located in the western part of the country and covers an area of 2.306,93 km2 which represents 1,75% of the total area of Greece. It comprises of 32 islands, out of which only 14 are inhabited, namely: Zakynthos (Zante), Kefalonia, Ithaca, Kastos, Kalamos, Sparti, Meganisi, Lefkada, Antipaxoi, Paxoi, Corfu, Mathraki, Ereikousa and Othonoi (RII, 2017).

After the last local authorities’ reform code-named Callicrates Program (Law 3852/2010, GG A 87), in the Region of the Ionian Islands there are seven Municipalities: 1. Municipality of Corfu, 2. Municipality of Paxoi, 3. Municipality of Lefkada, 4. Municipality of Meganisi, 5. Municipality of Kefalonia, 6. Municipality of Ithaca, 7. Municipality of Zakynthos, while the Regional administration is subdivided in five Regional Unities: 1. Regional Unity of Corfu 2. Regional Unity of Lefkada 3. Regional Unity of Kefalonia 4. Regional Unity of Ithaca 5. Regional Unity of Zakynthos

The permanent population, according to the 2011 National Census, for the Regional Units of the Region of Ionian Islands is shown in Table 1 together with the corresponding area and population density (RII, 2017).

Table 1 Permanent population (2011 Census), area (in km2) and population density for the Ionian Islands Region (table adapted from RII, 2017).

Permanent Regional Unity Area (km2) Density Population Corfu 104.371 50% 641,06 28% 162,8 Kefalonia & Ithaca6 40.759 20% 904,39 39% 45,1 Zakynthos 35.801 17% 405,55 18% 88,3 Lefkada 26.924 13% 355,94 15% 75,6 Ionian Islands Region 207.855 100% 2.306,93 100% 90,1 Greece 10.816.286 131.957,41 81,97 Region as % of Greece 1,92% 1,75%

6 The Regional Unity of Ithaca is presented together with the Regional Unity of Kefalonia.

Postgraduate Dissertation 16 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

Due to the rapid advancement of the tourism sector in the past decades the Ionian Islands Corfu Region is gradually becoming a developed Region. It is an insular region at the borderline of Greece with inter-regional differences in the level of socioeconomic development and gravelly affected by the problems of the internal Paxoi transportation-connection network of the islands as well as the connection of the islands Meganisi with the mainland (INSETE, 2015; RII, 2017).

Lefkada The main pillars of the economy of the Region are tourism and the primary sector. After the traditional sources of income from sea-workers and immigrants have declined in volume and Ithaca importance, the tourism has nowadays become Kefalonia the primary source of income in the regional economy. About 3 out of every 4 Euros of regional GDP comes from tourism related activities (SETE, 2018). Of course, there are significant differences in the degree as well as Zakynthos the quality and model of tourism development among the Ionian islands. Geographical, environmental, historical, economic, political Figure 3 Map of the region of Ionian Islands. and cultural factors have contributed to the emergence of those differences.

Demographical and socioeconomic indicators for the Region are above the national average and the prospects of economic growth are very good. The locomotive of the economic growth for the Ionian Islands Region is tourism as it is the case for the Regions of Crete and South Aegean. The primary and secondary sectors tend to shrink in favor of the tertiary sector which is mainly covered by tourism related activities. The heavy industry is almost non-existent while small industry consists mainly of small units (wineries, olive-oil production, cheese factories, production of local food products, perfume production etc.). The manufacturing sector is mainly oriented towards the production of construction materials, furniture etc. while the selling, maintenance and repair of cars and motorbikes is significant due to tourism development. Either directly or indirectly, the tourism is the most significant contributing factor in the developmental profile of the Ionian Islands Region (INSETE, 2015; RII, 2017; SETE, 2018).

Other developed markets affected and related to tourism are that of transportation (travel agencies being the most profitable), renting of machines and equipment and recreational activities.

Tourism is more developed in Corfu and Zakynthos which show the highest levels of tourism visits. The Ionian Islands Region is a key tourism destination of the south-eastern Europe and its role in the international tourism market is linked to the developments in this greater region. There is increasing competition among the tourism destinations of south- eastern Europe / eastern Mediterranean Sea which, even at the regional level within Greece,

Postgraduate Dissertation 17 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region is sensitive to the geopolitical situation in the greater area. This calls for innovative approaches and rapid responses to the tourism market movements as well as adopting solid strategies to safeguard the destination status and attractiveness. The individual destinations of the Ionian Islands Region represent, at the national level, a powerful center of tourism development that operates in parallel and complementary to the less developed tourism regions of Epirus and Western Peloponnese (PIN, 2017, 2018; RII, 2017).

Table 2 Hotel units, rooms and beds per hotel star-category, regional unity and municipality in the Region of Ionian Islands. Data for 2017. Source: Hellenic Chamber of Hotels.

Regional Unity 1* 2* 3* 4* 5* Total Municipality Units 9 150 66 41 16 282 Zakynthos Rooms 224 5.780 5.206 3.195 1.590 15.995 Zakynthos Beds 440 11.171 10.093 6.249 3.282 31.235 Units 3 3 2 8 Ithaca Rooms 54 56 27 137 Ithaca Beds 99 105 61 265

Units 54 180 93 56 17 400

Corfu Rooms 1.114 6.018 6.077 6.795 3.915 23.919

Beds 2.149 11.323 11.664 13.051 7.765 45.952

Units 53 179 91 54 17 394

Rooms 1.099 5.976 6.029 6.753 3.915 23.772 Corfu

Beds 2.119 11.240 11.567 12.947 7.765 45.638

Units 1 1 2 2 6

Rooms 15 42 48 42 147 Paxoi

Beds 30 83 97 104 314 Units 8 81 32 18 5 144 Kefalonia Rooms 104 2.207 1.242 1.324 396 5.273 Kefalonia Beds 204 4.315 2.453 2.653 876 10.501

Units 4 62 23 9 1 99

Lefkada Rooms 83 1.566 650 396 102 2.797

Beds 158 3.014 1.279 832 204 5.487

Units 4 62 22 8 1 97

Rooms 83 1.566 621 346 102 2.718 Lefkada

Beds 158 3.014 1.230 732 204 5.338

Units 1 1 2

Rooms 29 50 79 Meganisi

Beds 49 100 149 Units 75 476 217 126 39 933 Regional Total Rooms 1.525 15.625 13.231 11.737 6.003 48.121 Beds 2.951 29.922 25.594 22.846 12.127 93.440 Source: Hellenic Chamber of Hotels

Postgraduate Dissertation 18 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

4.2 The islands

4.2.1 Corfu Corfu (Kerkyra) is located in northwest of Greece, at the entrance of the Adriatic Sea, near the coast of the Region of Epirus. The northeast cost of Corfu is nearly two kilometers away from the coast of Albania. Apart from the island of Corfu, the Municipality of Corfu includes the smaller islands of Ereikousa and Othonoi. During the middle ages the island was named Koryfo (Κορυφώ) or Corfu, most likely because of the two fortified peaks of the city. Corfu is the name under which the island is known abroad (Municipality of Corfu, 2018).

Corfu is accessible from 103 airports in Europe via its international airport. There is one large port with various connections and one modern marina. There are nearly 1.000 restaurants in Corfu which is known for the variety of its cuisine. The night life is not that intense but there are bars and clubs with live music of all genres. There is a variety of shops, including international chains (INSETE, 2015). There are 394 hotels in Corfu with 23.772 rooms and 45.638 beds (see Table 2) with the majority of them located on the eastern side of the island. There are also 1.105 units of tourism accommodation (rooms and apartments) (INSETE, 2015; RII, 2017).

4.2.2 Paxoi Paxoi is located 13 km south of Corfu and belong to the Natura 2000 network of protected areas. The island is only accessible by sea with the main arrivals being at the port of Gaios which connects Paxoi with Igoumenitsa while in the summer there are also arrivals from Italy. There are 79 restaurants in the island, 6 hotels (147 rooms, 314 beds, see Table 2) and 114 units of tourism accommodation (rooms and apartments) (INSETE, 2015; RII, 2017).

4.2.3 Lefkada Lefkada is the only Ionian island that can be approached from the mainland as it is connected through a bridge. The former-military-base airport of Aktio, located on the mainland at a distance of 20 km from the city of Lefkada, serves the visitors of the island.

Lefkada has 277 restaurants and famous local products include honey from Athani and lentils from Eglouvi. The main volume of hotels is located at the eastern part of the island and also in the south around the region of Vasiliki. There are 97 hotels with 2.718 rooms and 5.338 beds (see Table 2) and 543 units of tourism accommodation (rooms and apartments) (INSETE, 2015; RII, 2017).

4.2.4 Meganisi Meganisi is located between Leflada and Aetolia-Acarnania of the mainland. The island can be accessed from Lefkada, from the port of Nydri, to either of the two ports of the island (Vathy and or Spartochori). There are 2 hotels with 79 rooms and 149 beds (see Table 2) (INSETE, 2015; RII, 2017).

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4.2.5 Kefalonia Kefalonia is the largest and most mountainous of the Ionian Islands. It is located opposite the entrance of the gulf of Patras, north of Zakynthos, south of Lefkada and west of Ithaki.

Kefalonia is accessible from 26 airports in Europe through its international airport. The airport is small in size causing problems of congestion during the summer. Kefalonia has two main ports in the eastern side which connect the island with the mainland and Italy. The port of Sami has connection to Ithaki, Astakos and Italy while the port of Poros has a connection to Kyllini. The small port of of Fiskardo in the north is a popular destination for yachting tourism. The island has more than 400 restaurants with some of its famous local products being robola (local white wine), feta cheese, honey and mandoles (red colored sweets of Venice origin, made of sugar coated roasted almonds – mandorla means almond in Italian). There are 144 hotels with 5.273 rooms and 10.501 beds (see Table 2). There are 764 units of tourism accommodation (rooms and apartments). The largest number of hotels are located in the south of the island. Sami and Fiskardo are two locations in the north with notable number of hotels (INSETE, 2015; RII, 2017).

4.2.6 Ithaca Ithaca is located in the northeast of Kefalonia and in the south of Lefkada. Its capital is Vathy. The name of the island is well known from the epic poem of Odyssey which is attributed to Homer. The leading view of experts in the field is that the modern Ithaca coincides with Homer’s Ithaca although the latter is claimed by other places (among them Kefalonia and Lefkada) while there are studies and experts supporting such alternative views. What is certain is the strong and unshakable belief of the habitants of the island that they are the real descendants of the Kingdom of Odysseus.

Ithaca can be accessed from Kefalonia, Lefkada or Patras by boat. The central port is at the capital, Vathy, where a big natural gulf is formed. During the summer the port of Aetos (Pisaetos) connects the island with Kefalonia and Patra. There are 45 restaurants in the island while local products include honey, wine and tsipouro (pomace brandy). There are 8 hotels in Ithaki with 137 rooms and 265 beds (see Table 2) and 114 units of tourism accommodation (rooms and apartments). The main volume of tourism accommodation is concentrated in Vathy (INSETE, 2015; RII, 2017).

4.2.7 Zakynthos Zakynthos, internationally known as Zante or “Fior di Levante” (“The flower of the Levant”), the nickname given by the Venetians who occupied Zakynthos from 1484 to 1797. It is the third Ionian island in size and it is located approximately 16 km south of Kefalonia and approximately 18 km west of Peloponnese.

Zakynthos is accessible form 59 airports in Europe through its international airport (INSETE, 2015). The island has two ports that connect Zakynthos with Kyllini in Peloponnese and with Kefalonia. There are more than 570 restaurants in the island. One of its famous local products is mandolato (white nougat), a typical Venice sweet (mandorlato in Italian). The night life of the island is the most intense in the Ionian Islands making Zakynthos an attraction for many young tourists. There are 282 hotels in Zakynthos with 15.995 rooms and 31.235 beds (see Table 2). There are 954 units of tourism accommodation

Postgraduate Dissertation 20 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

(rooms and apartments) that mainly attract low-budget tourists. Three regions of the island receive the main volume of tourists: Laganas in the south, the city of Zakynthos and the surrounding area and Alykanas (INSETE, 2015; RII, 2017).

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5. Contribution of the public sector

5.1 Introductory remarks

The public sector has a significant contribution in shaping the tourism product since most of its basic determinants like environment, infrastructure, culture, services etc. remain under the control of the public sector even in the most “liberalized” economies. In addition, the public sector regulates the tourism industry and sets rules for the spatial / geographic distribution of tourism related activities.

5.1.1 Public sector hierarchy Public sector involvement in setting strategies and thus influencing the tourism product is effective in four different hierarchical levels: 1. EU policies and strategies, 2. Central government policies and strategies, 3. Regional strategies, 4. Municipal strategies.

Each level has a different involvement and contribution in the final tourism product of a given destination, with EU policies having a global effect on all EU member states, government policies affecting the national tourism product and regional and municipal strategies narrowing the scope to a single region or a single municipality. As we go down the hierarchy the policies and strategies implemented in higher levels are taken for granted and actors operate and develop their strategies in the given framework. Nevertheless, given the framework set up by EU and national policies, the regional and municipal authorities play a crucial role in the final tourism product as they, by definition, have the authority to deal with local affairs and implement both inherited (external) and developed (internal) policies and strategies.

5.1.2 Public sector: scope of this work Although the strategies and policies of EU and the Greek government on tourism are outlined below, this work did not focus on the mechanics of the strategic process in these two levels of the public sector. Therefore, there were no interviews with officials and strategists from corresponding entities (EU, Ministry, GNTO etc.). In this work the strategies and policies stemming from the EU as well as the central government are taken for granted and are regarded as part of the environment in which the regional, municipal as well as the private sector strategies are developed, implemented and revised. Of course, the perception of, the interaction with or the reaction to those policies and strategies by lower levels of the public sector as well as by the private sector was documented and studied.

5.2 EU policies and strategies in tourism

The EU strategy in tourism is materialized through policies and legal documents that are either adopted or are binding for the member states and also through funding schemes that

Postgraduate Dissertation 22 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region support projects promoting the adopted policies and strategies (Juul, European Parliament and Directorate-General for Parliamentary Research Services, 2015; European Commission and Directorate-General for Internal Market, 2016; European Commission, 2018). A thorough study of EU policies and strategies in tourism is beyond the scope of this work. Here, we briefly outline them in order to understand the wider framework under which national, regional and local strategies in tourism are developed.

5.2.1 EU Tourism Policy Europe is globally a leading tourism destination. The EU policy in tourism aims at maintaining this position while optimizing the impact of tourism on economic growth and employment. Although, collaboration of member countries by using good practices is the main aim, the European Commission mainly sees its role as supportive and coordinative in order to supplement the strategic actions of national governments of EU countries (European Commission, 2018).

Tourism as an economic and social activity was not explicitly regulated by or mentioned in the Treaty establishing the European Economic Community (EEC Treaty) resulting in the lack, even up to date, of a common tourism policy that would regulate the tourism sector. The need for such a common policy was acknowledged gradually by member states as the Common Market was coming forth, having tourism as one of its most important components. Following a resolution on a Community policy on tourism (Council of the European Communities, 1984), in 1986 the Council of the European Communities decided the establishment of a “consultation and cooperation procedure in the field of tourism” to facilitate the exchange of information, consultation and cooperation in the tourism sector (Council of the European Communities, 1986). The first informal meeting of the Ministers of Tourism was called in 1988 during the Greek Presidency. The Council of Ministers of the European Community decided to declare 1990 as the “European Tourism Year” (Chatzinikolaou, 1999).

After the Lisbon Treaty came into force in 2009, the amendments introduced in the Treaty on the Functioning of the European Union (TFEU, also known as the Treaty of Rome) permit the European Union to provide support, coordination or supplement actions of national governments in the field of tourism. Despite this new legal framework there is not a great advancement in the generation of European-level policies in the field of tourism. Tourism policy is to a high extend regulated by the Member States despite the fact that new legislation has gradually covered areas in which the EU has expertise – either exclusive or shared with national governments e.g. transportation and security, traveler rights etc. (Margaras, 2017).

According to the European Commission the main challenges for the tourism industry in Europe are (European Commission, 2018): • security and safety, • economic competitiveness, • technological • markets and competition.

The strategic plan for tourism in the EU was presented in a Communication adopted by the European Commission in June 2010. The report titled “Europe, the world's No. 1 tourist

Postgraduate Dissertation 23 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region destination – a new political framework for tourism in Europe” sets four main priorities for action (Fidanza, 2011; Juul, European Parliament and Directorate-General for Parliamentary Research Services, 2015): • the stimulation of competitiveness in the tourism industry in EU, • to support the development of tourism in a manner compatible with sustainability, responsibility and high quality, • to establish Europe as a set of high-quality and sustainable destinations, • optimize the financial policies of the European Union towards tourism development.

Actions and initiatives related to the strategy on tourism and to each of the corresponding priorities outlined above were included and updated in the “Implementation Rolling Plan of Tourism Action Framework” (European Commission, 2013b). The implementation of the corresponding actions is a joint effort of EU with public authorities, tourism associations and other stakeholders both in the public and the private sector.

Most of the actions in the implementation rolling plan on tourism have been completed by the Commission with emphasis on (European Commission, 2018): • the increase of both internal and external demand, • the enhancement of the product and service variety offered, • the improvement of ICT adoption, skills, accessibility, sustainability and quality, • the improvement of the socio-economic knowledge base in the tourism industry, • the promotion of Europe as a unique destination, • making tourism central to other policies of the EU.

The opinion of the tourism industry was sought (European Commission, 2013a) in two public consultations organized by the European Commission (run from December 2013 to March 2014). The first consultation titled “European Tourism of the Future”7 aimed to pinpoint opportunities and challenges for the tourism sector in EU and provide feedback on the 2010 Communication of the European Commission in order to modify the corresponding action plan. The second consultation on “Regulatory and Administrative Framework on EU Tourism”8 was aimed at the presentation of good practices with positive influence on the tourism industry and the identification of policies and practices that impede tourism business development (European Commission, 2013a).

The trends and EU policies related to tourism are reviewed and presented in an in-depth analysis document (Juul, European Parliament and Directorate-General for Parliamentary Research Services, 2015) and a more recent briefing (Margaras, 2017) of the European Parliament Research Service.

The new challenges of the tourism industry in the European Union include (Margaras, 2017): • Sustainability. Tourism imposes a burden to the environment due to transportation, pollution, exhaustion of natural resources etc.

7 http://ec.europa.eu/growth/content/consultation-european-tourism-future_en 8 http://ec.europa.eu/growth/content/open-consultation-regulatory-and-administrative-framework-tourism- businesses-public_en

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• Political environment. Terrorism and political instability have enormous negative impact on tourism. • Competition from new markets outside the EU. The World Tourism Organization (UNWTO) forecasts the market share of EU in tourism to fall from 60% 1995 to 41% in 2030. Moreover, while Europe has the biggest share in terms of arrivals (52%) it underperforms in international receipts (41%) i.e. the spending of international visitor. This is due to the fact that travelers within the EU undertake shorter trips. • Appearance of niche target groups. Adapting to the needs and interests of new specialized visitor groups can help in increasing tourism. This adaptation might not always be easy and trivial as it demands a thorough redesign of the related products and services. Such specialized groups include seniors, disabled persons, eco-tourists, people travelling for cultural, religious or other purposes. • Visa. Visa policies impede tourism development resulting in the loss of millions of travelers from countries like Russia, China, India etc. • Online services. Internet and smart devices are used in tourism related activities at a rapidly increasing rate. Regulation and supervision are highly challenging. • Innovation and quality. New products and services of high quality are required in order for the European tourism industry to maintain its international competitiveness. Seasonality of the tourism industry is also a challenge that needs to be addressed. • Regional and local authority challenges. Regional and local authorities face a great range of challenges in strategic planning and in managing the adverse effects of tourism development. Waste management, mass tourism side-effects, natural protected areas etc. are the responsibility of regional and local administration at a period where their budgets are affected by austerity. Seasonality and other tourism related employment characteristics as well as the danger on relying on tourism as the main and primary source of income are issues that call for local and / or regional action.

In recent years most of these challenges have been addressed by the European Commision by adopting appropriate policies (Juul, European Parliament and Directorate-General for Parliamentary Research Services, 2015; Margaras, 2017) and by funding appropriate projects and initiatives (see below).

5.2.2 EU funding of tourism-related activities The most powerful tools available to the European Commission in order to effectively address the challenges faced by the tourism industry are the EU funding schemes from which both public and private sector entities can benefit. Despite the lack of a specialized fund for the tourism industry, national governments have utilized EU funds for building infrastructure that indirectly plays significant role in supporting tourism (transportation networks, waste management etc.).

Tourism-related projects can be funded by the following EU sources (European Commission and Directorate-General for Internal Market, 2016; Margaras, 2017): • European Regional Development Fund (ERDF). • Cohesion Fund.

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• Agricultural Fund for Rural Development (EAFRD). • European Social Fund (ESF). • European Maritime and Fisheries Fund (EMFF). • LIFE programme. • Creative Europe programme. • European Fund for Strategic Investments. • COSME. • Erasmus+. • Horizon 2020. • Employment and Social Innovation (EaSI).

5.2.3 Regional and local actors and EU policies As we have seen above (subsection 5.2.1), EU clearly acknowledges the burden placed upon, the challenges faced by and the unique role of local and regional authorities with respect to tourism development, especially in a period during which economic austerity imposes spending cuts that substantially limit their ability to respond (Margaras, 2017; Wagner and European Committee of the Regions, 2017). In its policy recommendations the European Committee of the Regions approaches tourism “as a driving force for regional cooperation across the EU” and calls regions and cities to develop tourism-related strategies that follow the EU macro-regional strategies (Wagner and European Committee of the Regions, 2017).

Although our research did not focus on the perception and understanding of EU policies and strategies in tourism by regional and local actors in the public and the private sector, there are indications on this issue that could merit further investigation. Most interviewees, especially from the private sector, do not seem to realize and / or explicitly acknowledge the effect of EU strategies and policies in the Greek tourism industry. Interestingly, this happens despite the fact that all interviewees are aware and acknowledge the importance of EU funding for developing infrastructure that is crucial for tourism development. On the other hand, public sector officials, and especially the ones from regional authorities seem to have a better grasp of the way in which EU strategies and policies affect national, regional and local strategies in tourism.

5.3 Government policies in tourism

5.3.1 Ministry of Tourism As of today, the central government policies on tourism are under the authority of the Ministry of Tourism which was re-established as an independent ministry on November 4, 2016 after a proposal from the Prime-minister. In the recent history the authority on tourism has been granted to either a ministry dedicated solely on tourism (1989-1991, 1993-1996, 2004-2009, 2012-2015) or to merged ministries (2009-2012 Ministry of Culture and Tourism, 2015 Ministry of Economy, Infrastructure, Shipping and Tourism, 2015 – 2016

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Ministry of Economy, Development and Tourism)9. The legal persons of the tourism sector governed by public law (Ν.Π.Δ.Δ.), namely the Greek National Tourism Organization (GNTO) and the Hellenic Chamber of Hotels (HCH) are under the authority of the Minister of Tourism (Barbaresos and Christidou, 1999; Ministry of Tourism, 2018).

The mission of the Ministry of Tourism is the implementation of government policies in tourism and the strategic planning of tourism development. This mission is achieved by implementing short- and long-term projects for supporting the competitiveness of the tourism product, support of investments, promoting education and vocational education in tourism and coordinating the promotion of the image of Greece abroad (Ministry of Tourism, 2017).

In this context the Ministry proposes necessary actions and initiatives to the government for the effective operation of the tourism industry, intervenes for the alignment of the policies that affect tourism. Moreover, the Ministry has an executive and coordinative role in Tourism and it collaborates with and supports the Regional and Local Authorities and other entities with authority related to tourism (Ministry of Tourism, 2017).

In particular, the ministry's competences are summarized as follows (Ministry of Tourism, 2017): • Planning and implementing tourism policies and tourism development in the framework of general government policy. Formulating and promoting necessary institutional and other regulations as well as taking the necessary implementing measures. • Proposing to the government measures for the proper and efficient operation of the tourism sector and the monitoring of its performance in accordance with the methods and requirements of the international tourism market. • Research and study of the impact of tourism on the national economy, on the social life of the country and on the conditions of competition on the international tourism market, aiming at the creation of tourist indicators and indicators of sustainable tourism development and the necessary documentation and evaluation of the results of their surveys. • Guidelines for the design and development of tourist infrastructure and development programs. • Promoting and taking measures to attract private investments in the tourism sector in collaboration with the Ministry of Finance. • The cooperation with the relevant Ministries for the harmonization of the policies that affect tourism and the coordination of the actions in order to assist tourism development and improve the quality and competitiveness of the country's tourism. • The representation of the country in international organizations and transnational relations about tourism, signing international agreements relating to tourism and bilateral agreements on tourism cooperation. • To promote Greek positions in the tourism sector to the competent bodies of the European Union and other international organizations, to ensure cooperation with

9 See laws 1835/1989 and 3270/2004 and Presidential Decrees 417/1991, 459/1993, 27/1996, 122/2004, 186/2009, 85/2012, 25/2015, 123/2016.

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other Ministries in order to secure EU funds and to harmonize the national legislation with the European Community law on tourism. • The design of the tourist promotion program of the country or of its regions at home and abroad. • The design of policies to assist qualitative upgrading of the tourist services of the country and in particular the evaluation of the proposed tourism education and training programs, the provision of funds for the financing of these programs by the State Budget and the Social Fund of the EU. • The proposal for the issuance of presidential decrees for the designation of places as tourist sites and for the designation of water springs as medicinal springs and for the recall of such designations.

5.3.2 Greek National Tourism Organization (GNTO) The Greek National Tourism Organization (GNTO)10 was founded in 1929 and re-founded in 1950 after it was taken over by other Ministries in the period from 1936 to 1950. It is a legal person governed by public law and supervised by the Ministry of Tourism. It is the government entity for the tourism sector with its main mission being the organization, development, and promotion of the Tourism in Greece by exploiting the full potential of the country, implementing tourism promotion campaigns of Greece both in Greece and abroad, supervising and controlling the general tourism market and by taking any necessary steps for the support and promotion of the Greek tourism product. The mission of GNTO is to strengthen the value of Greek Tourism in collaboration with the tourism industry and the parties involved aiming at increasing the incoming tourism flows in parallel with the tourism income (Barbaresos and Christidou, 1999; GNTO, 2018).

According to the Law 3270/04 (Government Gazette Issue 187/A/11.10.2004), since 1/1/2015, GNTO comprises of a Central Service located in Athens and Regional Tourism Services. The Presidential Decree 112/2014 (GG 179/Α) transferred the Regional Tourism Services from the GNTO to the Ministry together with the Special Service for the Promotion and Licensing Tourism Enterprises. The law 4254/2014 (GG 85/Α) the General Division of Development, the Divisions of Studies and Investment, Quality Control and Market Supervision, Tourism Infrastructures, Inspection and Coordination of Regional Services of GNTO were abolished and the corresponding responsibilities were undertaken by organic units of the Ministry of Tourism (GNTO, 2018).

It should be noted that GNTO is, by law, the exclusive supervisor and the permission granting authority for any tourism promotion campaign implemented by public sector entities. More specifically the amended Article 30 of Law 3498/2006 (by article 45 of Law 4267/2014) states: “Advertising programs and general actions concerning the promotion of tourism and advertising of the country or its regions within the country and abroad that are developed and implemented by any public sector or local authority body and the wider public sector in general as it is defined, independently of their source of funding being from national, European or own sources of the implementing body, must be fully compatible with the overall planning of the objectives of the tourism

10 http://www.gnto.gov.gr/

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promotion program of the country or its regions, prepared by the Ministry of Tourism.

Implementation of the above programs and the conclusion of relevant contracts concerning the supply of goods, provision of services or implementation of projects requires the prior agreement of the GNTO”.

As a result, the GNTO has developed formalized procedures and published documentation for the provision of approval on projects and actions of tourism promotion by Regional and Local authorities as well as other entities of the public sector. One of the most fundamental pre-requisites for obtaining approval for such actions is the submission of an annual plan draft that in collaboration with GNTO will be developed into a full proposal. This proposal should take into account the updated Strategy for Promotion and Advertisement of the Greek Tourism Organization (GNTO, 2018).

The current Strategy for Promotion and Advertisement of the Greek Tourism Organization is applicable for the years 2017 and 2018 and its content is briefly outlined in the following section (GNTO, 2018).

5.3.3 GNTO Strategy for Promotion and Advertisement The main aims for communication of the strategy include (GNTO, 2018)11: • Upgrading “sea and sun” branding to a higher level. • Promoting and advertising to the international market new and unknown Greek destinations 365 days per year. • Dynamic relaunching of the tourism branding of Greece as top destination targeted per country and aim. • Presenting Greece as a top, safe, multi-island destination offering genuine experiences of thematic tourism, 12-month per year, the most competitive in Europe. • Strengthening of the promotion as a top “Worldwide-Destination” choice in sea and sun, luxury vacation, cruising and yachting. • Targeted and competitive promotion of thematic tourism experiences, 365-days per year, as well as the City Break of Athens and Thessaloniki. • Dynamic and strengthened promotion in new markets like The Emirates, Saudi Arabia, Egypt, China, India, Korea, South America.

The synergy of actions in tourism with culture and the promotion of the rich cultural heritage and cultural identity of the country combined with sports and other international events is expected to contribute to the upgrade and distinction of the tourism product.

The marketing mix proposed under the current GNTO promotion strategy includes: • Co-advertising, collaboration with other tourism organizations, tour operators and travel agents. • Use of internet and social media.

11 The original document (in Greek) from which the information for this sub-section was obtained is titled “Approval of Strategy for the Promotion and Advertisement of the Greek Tourism Organization for the period 2017-2018” and is available from the official public-document repository of the Greek Government and public authorities https://diavgeia.gov.gr/ under the document code ΑΔΑ: 7ΔΚ4469ΗΙΖ-ΡΓΒ.

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• On-line advertisement. • Off-line advertisement (international press, outdoor advertisement, etc.) • Printed material, tourist guides, leaflets and maps. • Participation in tourism exhibitions. • Participation in publicity actions. • Familiarization trips for journalists, tour operations, TV crews, bloggers and opinion leaders. • Coordination with Regional and Local Authorities for actions abroad. • Support for internal tourism and emergency responses. • Market analysis, statistic data, trend analysis, studies.

5.3.4 Hellenic Chamber of Hotels (HCH) The Hellenic Chamber of Hotels (HCH) was founded in 1935 as a legal person governed by public law. By law, it is the government advisor of the state in tourism issues and its members are the hotels and the organized camps of the country (register members are at a total of 10.000 units with classic hotels being the main category) (Barbaresos and Christidou, 1999; HCH, 2018).

The aims of HCH include (HCH, 2018): • The study, proposal and implementation of measures that contribute to the development of the hotel industry in Greece. • Support of its members on economic, legal and employment issues. • Implementing studies. • Providing statistics on the country's hotel potential. • Publishing newsletters. • Provide consumer information of hotel and camping services. • Participation in international tourism exhibitions. • Organization of hotel-related conferences. • The cooperation of the hotel industry with other sectors of the Greek economy.

5.3.5 Tools for implementing central government policies and strategies As it is the case for EU, the effective implementation of central government strategies and policies in the field of tourism has two important components: • proposing and executing legislature and • implementing and / or funding tourism related projects.

Understanding how Greek governments have, historically, used those tools to implement their strategies and policies in the tourism industry is a fundamental issue of vast depth that would merit being studied independently. The 2010 economic crisis and the subsequent “bail-out programs” have led to loan-agreements that imposed constrains on the ability of the Greek government to freely control both those tools in order to implement a strategy of its own in the field of tourism: • Austerity measures reduced significantly the resources available for public investment projects. The funding of tourism related projects, of infrastructure related to tourism as well as the funding of regional and local authorities was gravely diminished.

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• The terms of the loan-agreements imposed the obligation to pass legislature that affected the tourism industry (e.g. increase of VAT in tourism accommodation, increase of special VAT in the Aegean islands that where under special insular VAT status, imposing stay-tax on hotels etc.). • The terms of the loan-agreements imposed the need for privatizing public owned assets that gravely affect tourism (privatization of air-ports etc.). Although the impact of those constrains is the subject of heated discussions in political, economic and academic cycles, the effects of those constrains highlight the importance of legislature and funding the implementation of a national strategy in the field of tourism.

As our focus is mainly at the regional and local strategies on tourism we are not covering in depth the implementation of government strategies and the use of legislature and funding as tools in this direction. Nevertheless, it is worth mentioning two typical examples: • The Development Law: almost every government since the re-establishment of democracy in 1974 has prepared, voted, funded and implemented a so called “Development Law”, under which private investment projects are co-funded by the government. The most recent Development Law was passed in 2016 (law 4399/2016). All development laws, including the last one, have provisions for funding tourism related infrastructure investments by the private sector thus providing incentives and guidance for investments that are compatible with the government planning in tourism12. • Land Planning Legislation: The General Framework of Spatial Planning and Sustainable Development is a set of texts and diagrams in which the factors that influence the long-term spatial development and structure of the national space are recorded and evaluated, the spatial impacts of international, European and national policies are assessed and the main priorities and strategic directions for integrated spatial development and the sustainable organization of the national space are identified with a fifteen-years projection (Ministry for the Environment and Energy, 2018). Despite its importance for tourism investment projects, the General Framework of Spatial Planning and Sustainable Development and the Special Framework for Spatial Planning and Sustainable Development for Tourism and its Strategic Environmental Impact Assessment have been invalidated by decisions of The Council of State13 without any remedy actions taken from the side of the Greek Government for the serious legal issues that result from those decisions (Lialios, 2017). This issue represents a major failure of the Greek government that cannot be blamed on any external actors or factors.

5.3.6 Regional and local actors and central government policies In contrast to EU policies, central government strategies and policies in tourism are not only well perceived and understood by regional and local actors but there are also well understood and accessible channels of interaction with central government bodies involved in the field of tourism. This holds true for regional and local authorities as well as professional bodies of the private sector although to a lesser degree for the latter. Of course, this does not imply that there is consensus in all strategies and policies. For example, local

12 https://www.ependyseis.gr/anaptyxiakos/, http://www.mintour.gov.gr/Investments/DevelopmentLaw/, https://www.anaptyxiakos.gr/ 13 http://www.adjustice.gr/

Postgraduate Dissertation 31 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region authorities have raised objections about the stay-tax imposed on hotel and apartment visitors on per capita basis, especially given the fact that this tax is not used to cover the costs stemming from the burden imposed by the number of visitors in popular touristic areas.

5.4 Regional and local strategies in tourism

5.4.1 Structure and function of regional and local authorities The Constitution of Greece of 1974 as it was amended in 2001 and in 2008 sets in articles 101 and 102 the institutional basis for the Regional and Local Authorities and governance. According to article 102, the administration of local affairs is responsibility of local government bodies of first and second degree and for this purpose they have the presumption of competence in their favor. The current structure of regional and local authorities is the result of law 3852/2010 (GG 87 A) titled “New Architecture of Local Government and Decentralized Administration – Callicrates Program”. The program was given the name of Callicrates one of the two ancient Greek architects of the Parthenon in Athens (Ministry of Interior, 2012).

The Callicrates Program, effective since January 1st, 2011, restructured the administrative structure of Greece at the level of local government of the first and second degree into 325 Municipalities and 13 Regions respectively. Moreover 7 Decentralized Administrations were created in order to take over the rights and obligations of the abolished central government-controlled Regions (Ministry of Interior, 2012).

5.4.2 The regional authorities Regions are autonomous legal bodies and constitute the second level of local government. Each Region includes more than one Prefecture within its geographical boundaries. Peripheral Units are established within the boundaries of the Prefectures and the former Insular Provinces of the country, which play an important role in strengthening intra- regional decentralization (Ministry of Interior, 2012).

The regional administration bodies include (Ministry of Interior, 2012): • The Regional Governor, • The Regional Vice-Governors. The vice-governors, who assist the regional governor, are distinguished by those elected and appointed by the regional governor. The elected delegates are elected in proportion to the number of regional unities and do not occupy the position of regional advisor. In addition, the District Governor may, by decision, appoint up to three (3) delegates, to whom it delegates specific responsibilities. The regional governor may, by decision, entrust all delegations of the region with the exercise of areas of competence in the region, with the exception of issuing payment orders. • The Regional Council. The Regional Council has the presumption of jurisdiction over all the affairs of the region, except for those assigned explicitly by law to another body of the region. • The Executive committee. • The Financial Committee.

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• The Regional Advisory Committee • The Citizen and Business Support Officer • The Regional Committee for Gender Equality

The regional authorities design, plan and implement policies at the regional level in the framework of their responsibilities in the following sectors (Ministry of Interior, 2012): 1. Planning – Development. 2. Agriculture – Livestock – Fishing. 3. Natural Resources – Energy – Industry. 4. Employment – Commerce – Tourism. 5. Transportation – Communication. 6. Infrastructure projects – Spatial Planning – Environment. 7. Health care. 8. Education – Culture – Sports. 9. Civil protection and Administrative support.

5.4.3 The local authorities Municipalities are autonomous legal bodies and constitute the first level of local government. The presumption of competence for the administration of local affairs is in favor of the respective Municipalities (see sub-section 5.4.1).

The local administration bodies include (Ministry of Interior, 2012): • The Mayor, • The Vice-Mayors who are assigned local or thematic responsibilities (including the thematic responsibility on tourism), • The Municipal Council. • The Executive Committee. • The Financial Committee. • The Quality-of-Life Committee.

The responsibilities of the Municipalities are organized in eight sectors (Ministry of Interior, 2012): 1. Development. 2. Environment. 3. Quality of life and Management of Cities. 4. Employment. 5. Social Protection and Solidarity. 6. Education, Culture and Sports. 7. Civil Protection. 8. Agricultural Development, Livestock and Fishing.

5.4.4 The role of local and regional authorities in tourism Their structure and function as well as the presumption of competence for the administration of local affairs (given their proximity to the citizen) makes local and regional authorities key actors in the tourism industry. In most cases local and regional authorities have the responsibility for the construction and maintenance of infrastructure that is directly or indirectly related to tourism (ports, road networks, water supply and sewerage networks etc.)

Postgraduate Dissertation 33 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region while they are, with few exceptions (e.g. health care etc.), the main providers of public services to the citizens and the enterprises. Regulation and licensing of many tourism related activities are the responsibility of regional and / or local authorities (e.g. environmental licensing for large hotel units, licensing of restaurants and bars etc.).

Both local and regional authorities, especially in insular and / or touristic regions, design and implement strategic plans for tourism development and promotion and have appointed officials and entities in charge of tourism (Vice-Governor and Vice-Mayor for Tourism, Municipal Tourism Promotion Committee etc.). For the shake of clarity and consistency the role, strategies and strategic approaches of local and regional authorities are described in detail in Chapter 6 where the results of our empirical research on the public sector are presented.

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6. Public sector approaches: empirical research results

The structure, function as well as the strategy in the field of tourism of the public sector was outlined above based on documents, reports, news articles and publicly available information14. Nevertheless, this information is not sufficient in order to understand the mechanics of the strategic process as well as the interaction of officials and staff members of the Region and Municipalities of Ionian Islands with other actors of the public or private sector. Here we present the results of our research/interviews that provide insight into the approach of the Region and Municipalities of Ionian Islands.

6.1 The Regional Authorities' approach to strategic planning in Tourism

We interviewed the Vice-governor in charge of Tourism, the Vice-governors in charge of the Regional Unities as well as members of staff of the Region of Ionian Islands in charge of topics related to tourism. Although the Vice-governors in charge of the Regional Unities are not strictly involved in the strategic planning for tourism their executive duties as well as the projects they implement have either direct or indirect effect on tourism. We have also, where necessary, incorporated information that was available from other interviewees of both the public and the private sector.

6.1.1 Strategy content One of the key questions asked during the corresponding interviews aimed at identifying the strategic goal of the Region of Ionian Islands as it is perceived by the officials involved. When the Vice – Governor of the Region of Ionian Islands in charge of Tourism (Vice Governor for Tourism) was asked about the strategic goal of the Region he was able to provide a very clear and solid response. In a nutshell, the strategy that has been adopted aims at enriching the existing tourism product of the Region with culture, authentic local products and services in order to provide added value and take full advantage of the Internet and the modern promotion channels while abandoning any old-fashioned underperforming promotion channels.

The Vice Governor for Tourism believes that there are two key issues in the strategy of the Region: a) Providing visibility for the culture and the tourism product of the Ionian Islands. According to his view, the region provides an otherwise very good product which underperforms due to obscurity. b) Turn the Gross Domestic Product of the region (which is mainly based on tourism) into what he calls “Gross Domestic Prosperity”. This can be achieved by aiming at quality of life and authenticity. Quality of life for the habitants of the Region automatically translates into quality of life for the visitors while authenticity in all

14 Although the information presented in previous section was the result of research in archival material, reports, documents, news articles, publicly available information etc. it is also true that a significant amount of this information would not have easily been accessed if we were not informed about the relevant sources during the interviews.

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aspects of the products and services offered is what would capture the mind and heart of the visitor.

When the Vice – Governors in charge of the Regional Unities (Local Vice - Governors) where presented with a slightly different version of the question (what the strategic goal of the corresponding Regional Unity with respect to tourism is), almost invariably, we were presented with the same response: culture and infrastructure. Local Vice - Governors are responsible for the implementation of infrastructure projects as well as funding other (soft) projects of local scope. Moreover, they are the primary receptors on behalf of the Regional Authorities of all issues, problems and complains that concern the area under their authority. Thus, they are primarily concerned with the local scope of the regional strategy in tourism and this mainly concerns the construction of new or improvement of existing infrastructure and the support of cultural events, the production and promotion of cultural work. Most common themes appearing in the interviews involved: • the improvement of the provincial road network which is under the authority of the Region (damage repair, road safety, traffic signs etc.), • the construction and / or improvement of ports, • the improvement / construction of museums, temples etc. • the co-organization and funding of cultural events, festivals etc. The focus of the Local Vice - Governors in infrastructure and culture with respect to tourism planning does not preclude the implementation of projects directly related with tourism. In fact, there are good examples of projects funded by Regional Unity Authorities and involve tourism related activities that among others include: • Collaboration of the Regional Unity of Kefalonia with the Department of Digital Media & Communication (located in Argostoli) of the Technological Educational Institute of Ionian Islands in order to implement the project “Research on Modern Methods of Marking Tourist Attractions (NFC – QR-CODE HASHTAGS)”. • The production, funding and publication of the leaflet “LEFKADA Walks” by the Regional Unity of Lefkada which represents an excellent example of good practice for hiking and trekking tourism material production.

In brief, the strategic goal of the Regional Unity Authorities with respect to tourism mainly focuses on infrastructure and culture development and secondarily to the funding of projects directly related to tourism.

When the Vice Governor for Tourism was asked whether his strategic view for tourism involved any goals related to infrastructure and culture he clarified that this is under the authority of the Local Vice Governors and the unifying strategy that makes the policies coherent is that “whatever contributes to the wellbeing of the habitants of the Ionian Islands has a direct positive effect on tourism as it improves the conditions and the experiences of the tourist visitor”.

6.1.2 Strategic process The preparation of Strategic and Operational Plans from the Regional Authorities is a requirement included in Law 3852/2010 (GG 87/A/7.6.2010), Article 268 which defines that the plan is prepared for a five-year period. The ministerial decision 74754/2010 (GG 2043Β/2010) specifies the content, the structure, the method of submission, the bodies

Postgraduate Dissertation 36 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region involved in and the process of preparation, monitoring and evaluation of the Strategic and Operational Plans from the Regional Authorities. In brief the five-year plans include: 1. Strategic plan, 2. Operational plan, 3. Five-year plan of actions and Financial plan, 4. Monitoring and Evaluation Indicators. The five-year plan is prepared by the Executive Committee in collaboration with the Division of Development Planning of the Region of Ionian Islands and the administrative bodies and services of the Region, the Regional Development Find and the Legal Entities of the Region. The plan is approved and monitored by the Regional Council while the Executive Committee is responsible for its preparation and implementation. The draft plan is temporarily approved by the Regional Council and a public consultation procedure for at least a two-week period takes place during which proposals are submitted by citizens, unions of citizens, local, social or economic entities. The Regional Governor can decide the organization of a conference, thematic meetings, public discussions and any other action of consultation is deemed necessary. Finally, the five-year plan is specialized into the Regional Annual Action Plans.

Actually, the Annual Action Plans are the tool the Local Vice Governors make use of the most in order to update and amend the five-year plan to the daily needs of their areas as they themselves are the basic channels through which citizens and entities of both the public and the private sector can communicate with Regional Authorities and request immediate attention to urging problems.

The current plan applicable is the “Strategic Plan of the Ionian Islands Region 2014 – 2019”. Tourism is the basic concern in almost all strategic directions of this plan as indeed the tourism sector accounts for 73% of the GDP of the Region of Ionian Island.

Although the terms (especially in Greek) as well as the entities involved give ground for confusion, the “Strategic Plan of the Ionian Islands Region 2014 – 2019” which is a legal obligation and necessary for the operation of the legal entity Region of Ionian Islands is different from and should not be confused with the “Regional Operational Program Ionian Islands 2014-2020”. The latter is a Regional Operational Programme (ROP) funded by European Structural and Investment Funds of the European Union and applies to the Region of Ionian Islands. The ROP is managed by the Special Management Service for the Regional Operational Program Ionian Islands 2014-2020 which operates under the legal entity Region of Ionian Islands.

In this Regional Operational Program, under the call coded ION30, the Region of Ionian Islands decided to submit a proposal for funding actions for promoting tourism in the Ionian Islands. A requirement by the Special Management Service for approving the funding of this proposed project was the submission on behalf of the Regional Authorities of a “Operational Plan for the Tourism Promotion of the Region of Ionian Islands”. This plan was submitted for approval to the Regional Council on 8th of February 2017.

This Operational Plan is very interesting for three main reasons: a) it followed public consultation procedures that were wider and more inclusive than the ones usually followed for the more bureaucratic and robust Strategic and Operational Plan of the Region and

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b) it sets a clear and solid roadmap for the implementation of specific actions for the promotion of the tourism product of the Region of Ionian Islands, c) despite the fact that it is fully compatible and even extends the “Strategic Plan of the Ionian Islands Region 2014 – 2019” it approaches Tourism in a clearer way that the Strategic Plan could manage or afford to. Of course, this Operational Plan was devised for the purpose of fulfilling the requirements for funding a project instead of a standard operational procedure followed by the Regional Authorities but nevertheless, it has its own value both as an example of good practice and for the shake of its own content per se.

6.1.3 Resources for strategy One would expect that for a Region for which almost three quarters of the regional GDP come from tourism the resources directly devoted to tourism will be proportional to the importance of the sector for the regional economy. Surprisingly, the Division of Tourism of the Region of Ionian Islands together with the Departments of Tourism of the corresponding Regional Unities has a total staff of 5-6 people (3 in the Regional Division of Tourism and the Regional Unity of Corfu, 2 in Kefalonia, 1 in Lefkada while the Regional Unity of Zakynthos has no staff in the corresponding Department of Tourism).

In a similar fashion the total budget available for tourism related actions in the period 2016 – 2017 (mainly promotion) was around 300.000 € while the budget for 2018 alone is 1.200.000 €. Even in this case, the Regional Authorities do not expect to be able to use more than 60% of this budget mainly due to constrains and long delays imposed on public procurements from the recent law passed by the Greek government (law 4412/2016). Of course, even under this constrain, the amount that is expected to be spent mainly on tourism promotion for 2018 is double the one available for the two-year period 2016-2017.

In April 2018 the Governor of the Region of Ionian Islands signed a six-month contract of 69.000 € for the project “Study on the strategy and directions of the Region of Ionian Islands for improving tourism competitiveness” funded under the “Regional Operational Program Ionian Islands 2014-2020” (Region of Ionian Islands, 2018). The strategic and competitiveness advisor hired by the Regional Authorities will undertake the following tasks (among others): • Demand management strategy to optimize the markets mix (geographic and products) through priority targeting, • Quality upgrade and enrichment of tourist services/products portfolio, aiming at the gradual prolongation of the tourist season, • Proposal for the research support for the “Operational Plan for Tourism Promotion”, • Public-private sector cooperation and development of partnerships and economies of scale between all the islands of the Region of Ionian Islands.

6.1.4 Legal framework / environment Given the strategic goals and the strategic processes followed by the Region of Ionian Islands with respect to tourism, one interesting question concerned the evaluation of the legal framework under which the Regional Authorities have to operate and whether it facilitates or hinders its contribution.

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All the Regional Authority officials referred to the Law 4212/2016 on Public Procurement as the most important and insurmountable obstacle in their role in the field of tourism. This law sets rules for the procedures required in order to design, award and execute public contracts, studies, technical and other related scientific services, supplies and other services and for the coordination, supervision and control of the functioning of the public procurement the administrative procedure for resolving disputes arising at the stage preceding the award of public works, supply and service contracts following a preliminary reference.

Law 4212/2016 introduces requirements that lengthen and render difficult even simple and low budget public procedures especially at a time where almost all the bodies of the public sector are seriously understaffed due to the austerity cuts imposed after the bail-out programs.

The current procedures applicable for hiring and or reorganizing the staff of Regional Authorities were also referred to as a big obstacle that leads to aged, unmotivated staff. The staff required for the implementation of the necessary tourism related projects by the Regional Authorities and / or for staffing the Division of Tourism Development should be highly educated and trained in the relevant field, with high

6.1.5 Secondary actions related to tourism strategy As it was seen previously the general “Strategic Plan of the Ionian Islands Region 2014 – 2019” is full of references to tourism even outside the main strategy for tourism development and promotion because of the importance of the sector to the regional economy. Therefore, a great number of corresponding actions and interventions have secondarily a contribution to the tourism sector (e.g. infrastructure, culture, development projects etc.). It is important to understand how the effectiveness of those actions and interventions is taken care of and how do the individual administrative entities within the Regional Authority cooperate and coordinate in order to fulfil the strategic goals for tourism development and promotion.

From the interviews and the examination of the relevant documentation the following conclusions were drawn: • The thematic Vice – Governor for Tourism is mainly in charge of strategic planning and all actions primarily related to tourism while the Local Vice – Governors are mainly in charge of strategic planning and all actions that are secondarily related to tourism. This distinction is clear and seems to be well respected something that most likely can be attributed to the fact that the thematic Vice – Governor for Tourism has focused on tourism promotion while tourism development (with all the necessary infrastructure, policy and other adjustments required) is a shared responsibility. • The cooperation and coordination that is necessary to align secondary policies with the strategies for tourism is mainly guaranteed by the strategic process imposed by law for the preparation, monitoring and evaluation of the five-year “Strategic Plan of the Ionian Islands Region”. Especially the Annual Action Plans are a tool for updating the strategic plan which requires the co-operation and coordination of all involved parties including the thematic Vice-Governor for Tourism and the Local Vice – Governors of the Regional Unities.

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• Nevertheless, there is not a formal conscious procedure for devising a strategic plan for tourism development per se (rather than tourism promotion as it is now), i.e. the preparation of a long term strategic plan for all the necessary actions and interventions required (primary or secondary) that would achieve the strategic goals in tourism having tourism as the starting point and also having some degree of liberty from budgetary constraints. This would have a series of beneficial effects including the following: o The interventions and actions would be seen under a unifying perspective that would mainly focus on the tourism development goals. o The removal of budgetary constraints (at least at the regional unity level) would allow a clearer perspective of the real priorities of the Region as the removal of clientele requests would free the strategists on tourism from politically motivated constraints. • The effectiveness of actions and interventions that are indirectly related to tourism is further supported by the dogma “whatever serves the citizen and contributes to quality of life is a direct investment in the tourism sector”. • The importance of secondary actions for tourism is understood by all, the importance of strategic planning for them is not.

6.1.6 Evaluation of strategy Strategies need to be monitored and evaluated so that they can be adapted to reality and their efficiency and performance measured. For this purpose, it is important to clarify how the Regional Authorities assess their contribution to the final tourism product and whether there is a standardized methodology for assessing this contribution.

According to the Vice-Governor for Tourism most of the promotion actions implemented since 2016 are in digital media and therefore have easily measurable results. For example, Google AdWords campaigns were evaluated by the impressions and showed that top results were achieved in United Kingdom, Italy and Turkey. As far as the effectiveness of the corresponding actions and interventions in terms of real tourism flows and/or end-user satisfaction is concerned the Regional Authorities use relevant statistical data from the Bank of Greece as indicators.

Another source of statistical data and information is SETE and INSETE (see section 7.3) with which belong to the private sector and the Regional Authorities have close ties and ongoing collaboration (the Regional INSETE Office is located in the headquarters of the Regional Authorities).

The Local Vice-Governors have the obligation of providing an annual account of the current status of implementation of the parts of the “Strategic Plan of the Ionian Islands Region 2014 – 2019” and of the Regional Annual Action Plan that correspond to their area of authority. Their reports are included in the Annual Report Presented by the Governor of the Region of Ionian Islands.

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Figure 4 Extract of the section on economy and tourism from the recent Annual Report of the Region of Ionian Islands.

6.1.7 Documentation As an example, the Annual Report of the Region of Ionian Islands (see Figure 4) presented on the 18th of March 2018 (PIN, 2018) includes the following points with respect to tourism: • The Ionian Islands Region GDP increased according to the data of the Bank of Greece for the first half of 2017 (385.2 million Euros). The Ionian Islands are among the regions with the highest GDP per capita together with Attiki and South Aegean Regions. • The Ionian Islands have the record of tourism receipts per night at 77.3 € compared to 72.9 € for the Region of Crete and 72.5 for the Region of South Aegean. • Their activity in the construction sector intensified due to the improvement or the construction of new accommodation for tourism with a consequent rise in commercial and transportation activity. • The unemployment level dropped by 12.47% in 2017 in comparison to 2016 making the Ionian Islands Region the Region with the lowest unemployment level. • The total flight arrivals till 31/12/2017 were 2,618,786 compared to 2,393,621 in 2016, 2,109,419 in 2015 and 2,035,009 in 2014. The analytical data indicate that the highest levels of increase where observed in March, April, May, September and October something that indicates some progress in lengthening the tourism period. • The domestic flight arrivals showed a decrease with respect to 2016 in Corfu (-4.7%) and Aktio (-10,7%) (airport in the mainland serving Lefkada) due to termination of flights by Ryanair and Olympic Air respectively while they showed increase in Kefalonia (+15,8%) and Zakynthos (+28,7%). • All ports showed significant increases in traffic (in passengers, cars, buses and trucks). • The Region of Ionian Islands collaborated with Marketing Greece S.A. for the promotion of the Ionian Islands in America and Australia.

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• Promotion campaigns aired on the state owned tv station ORF 3 of Austria and the tv station Live-Planet of Russia. • The Times of London and the French Le Figaro where among the press media in which the Region of the Ionian Islands was presented in tourism related articles. • Collaboration of the Region of Ionian Islands with the Turkish Tourism Organization Office for preparing the visit of a mission to Ionian Islands by a group of five journalists. The mission took place from 8 – 14 of June 2017 and the group visited Kefalonia, Ithaki, Zakynthos, Lefkada and Meganisi. • During 2017, the Region of Ionian Islands took part in most high-profile tourism exhibitions including Utrecht, Vienna, Belgrade (IFT), Berlin (ITB), Moscow (MIT), Naples (BNT), WTM in London, Philoxenia in Thessaloniki, Grecka Panorama in Warsaw and Greek Tourism Expo in Athens.

6.1.8 Channels with public / private sector The existence of channels of communication and / or consultation with the private sector on issues of tourism development and promotion from the Region of Ionian Islands would allow steady and solid collaboration that would contribute significantly in the strategy of the Region. As we have seen earlier the Regional Authorities made use of public consultation with the public entities and the regional tourism industry in order to prepare the “Operational Plan for the Tourism Promotion of the Region of Ionian Islands” necessary for receiving funds of the ROP Ionian Islands. During that consultation process many entities took part including the Municipalities of the Region, Hotel Owner Unions and Apartment Owner Federations, the Chambers of Commerce of its Prefecture, Port Funds, etc. and their views were recorded and included in the Operational Plan.

What was interesting to clarify is whether there are more steady channels of communication between the Regional Authorities and the private sector. The Thematic Vice-Governor on Tourism as well as the Local Vice-Governors of the Regional Unities occasionally meet and consult the representatives of the various associations (Chamber of Commerce, Hotel Owner Union, Apartment Owner Federation) but there is not a regular institutional framework under which there would be a regular collaboration with the private sector on issues related to the regional strategy on tourism.

Another interesting finding is that the Regional Authorities enjoy the voluntary support of individual enterprises in the field of tourism whenever the promotional campaigns require so. For example, local enterprises, quite often offer accommodation, catering, services and even financial support for publicity events, conferences, info-trips for missions of foreign journalists or even missions of the Regional Authorities in exhibitions and abroad.

6.1.9 Partnerships with private sector As it was seen above the partnerships developed between the Region of Ionian Islands and the private sector mainly concern the occasional support of the needs of meetings, events and missions related with the tourism promotion. Mostly individual enterprises and occasionally professional associations offer accommodation, catering, services, organizational or even financial support for initiatives of the Regional Authorities.

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6.1.10 Formal channels of consultation Given the fact that there are no regular institutional / formal channels of consultation / cooperation with the private sector we asked the regional officials whether there could be any and what form would they take.

The Vice-Governor for Tourism referred to a prospective web portal prepared by the Regional Authorities that would allow interactive discussion with citizens and entities in both the public and the private sector and would facilitate consultation processes. When asked if he would see the revival of an entity like the former “Ionian Islands Tourism Company” (ETIN) that had wide public and private sector participation or the formation of a Tourism Committee of similar participation as serving this purpose he firmly excluded such a prospect attributing his view to negative past experiences and the inefficiency of such entities.

6.1.11 Cooperation with municipalities Another important element for the strategic process on tourism for the Regional Authorities is their interaction with the Local Authorities of the First Degree, the Municipalities of the Region. The Municipalities have a number of vital issues for the function of tourism under their authority including waste management, water supply, sewerage, road network (partially), licensing of clubs, cafés, restaurants etc. In that respect the cooperation of the Regional Authorities with the Municipalities can be important and therefore its form, level and organization need to be clarified.

The response of the Thematic versus the Local Vice-Governor was different in this issue. The Thematic Vice – Governor for Tourism has a very positive view about the collaboration of the Regional Authorities with the representing body of the Municipalities at the regional level, the Regional Union of Municipalities of Ionian Islands (PED-IN). PED-IN is a legal entity governed by private law. In the past the Regional Authorities have collaborated with PED-IN in the context of tourism exhibitions or in the co-hosting of events and the collaboration was mutually beneficial and successful. On the other hand, the Vice-Governor for Tourism sees unsatisfactory response on behalf of individual Municipalities.

The view of the Local Vice-Governors on the cooperation with the respective Municipalities depends on the occasion, the local politics and anthropo-dynamics. In Kefalonia the Local Vice-Governor is collaborating with the Municipality of Kefalonia and he has even been appointed as a member of the Municipal Tourism Committee. This allows him to have a first-hand contact with the problems and issues discussed. In Lefkada the Local Vice- Governor, although not a member of the Municipal Tourism Committee is collaborating with the Municipality of Lefkada when necessary, especially in exhibitions and info-kiosks.

6.1.12 Agreement on strategy with municipalities The Regional Authority Officials were asked if according to their view their strategy is in agreement or disagreement with the corresponding strategy or strategies of the Municipalities on tourism development and promotion. The responses we got where quite different and one has to take into account the political as well as the institutional dynamics involved. At the institutional level the Regional and Local Authorities have distinct as well as overlapping responsibilities with respect to tourism which in all cases overlap in a very

Postgraduate Dissertation 43 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region complicated way. What is more the two Degrees of Local Administration have very different funding needs, opportunities and strains. At the political level the situation is similarly or even more complicated: Region and Municipalities are often entrapped in political and blame games despite the fact that in theory they are voted in separate elections.

The Vice Governor for Tourism responded that there is not a real strategy on tourism on behalf of the Municipalities and therefore there is no ground for agreement or disagreement with the Regional Strategy. According to his view the stance of the Municipalities on the issues of the tourism sector mainly serves political or micropolitical interests and it is guided by the communication and public relation needs of the Municipalities. The Local Vice Governor of the Regional Unity of Lefkada sees “no divergence of views” while the Local Vice Governor of the Regional Unity of Kefalonia sees a “coincidence of views with a strategic divergence in everyday issue management” with the respective Municipalities.

6.1.13 Views on private sector strategy The view of the Region of Ionian Islands on the private sector strategies on tourism and the general market situation as well as the means by which the Regional Authorities monitor the relevant processes and developments is an important factor in harmonizing regional policies and strategies with the real needs of the private sector and / or designing and implementing interventions that would support the private sector.

The Regional Authority tries to disseminate information to the private sector through professional associations and the local media for the necessary adjustments in their respective strategies for adapting to changes. Most of the strategies of the private sector are evaluated as positive by the regional authorities albeit having a time lag that is mostly attributed to the financial crisis, the reduction of income and the pressure exerted on the private sector by regulatory and taxation policies of the central government. The acceleration of the adaptation of the private sector the changes in the business environment and the global tourism market is therefore not easy due to the financial crisis.

Of course, there are also views about the strategies of smaller economic groups (e.g. taxi drivers, restaurants etc.) that either react strongly to changes threatening their income or react poorly to the need for qualitative upgrade of the products and services offered. There is a clear need for product improvement for certain subgroups within each tourism related sub-market and it is imperative for each group to self-regulate and isolate individual enterprises that violate regulations, social and quality norms and thus defame not only the business branch they represent but also the regional tourism industry as a whole.

6.1.14 The role of major businesses One of the most fundamental characteristics of the tourism industry internationally is the fact that it is heavily based on small and usually family-operated enterprises. Large tourism enterprises have a significant impact on the regional or local tourism market (with both positive and negative components) as well as in the regional tourism strategy. It is of interest to understand if the Regional Authorities have some kind of collaboration / contact with them and whether they contribute to the Regional Strategy and in what way.

The Regional Authorities have a close collaboration and contact with large tourism enterprises as most of them voluntarily contribute and support the regional tourism

Postgraduate Dissertation 44 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region promotion efforts (see above). Most of those enterprises have implemented business improvement projects and fully utilized the new sales channels (booking platforms, internet, social media etc.) and have thus managed to increase their electronic sales. This resulted in increasing their income for the same levels of room occupancy.

The Regional Authorities have the responsibility of approving the Studies of Environmental Terms for big hotel related investments and infrastructure constructions or improvements.

6.1.15 Need to change public – private cooperation Given the current state of affairs on the collaboration of public-private sector in the field of tourism the opinion of the Regional Authority Officials on the need for change in this area was sought together with suggestions on what steps and interventions might be needed in this direction.

Although all Regional Authority Officials agree on the need to improve the current cooperation with the private sector they do not share similar views about how this can be accomplished or even the same optimism about whether this can be done effectively.

One of the views expressed saw the need for taking measures in order to gain and establish a relation of trust from the private sector to the public sector and especially the Regional Authorities while on the other hand a “pact of honor” is required that would entail the modernization and adaptation to the new market conditions of all the enterprises that have not done already so.

6.1.16 Prospects of Ionian Islands / position The strategies followed combined with a good understanding of the external environment (international tourism market trends, the moves of the big players like tour operators, online booking companies etc., the legal framework, the international political and economic environment) should allow a certain forecast about the prospects of the Ionian Islands Region in the tourism sector as well as its relative position with respect to other Regions of Greece.

The Vice – Governor for Tourism expects that in 2018 the Region of Ionian Islands will improve most of its metrics and indicators in the fields of tourism thus achieving a higher GDP per capita. The Ionian Islands Region is expected to outnumber the Region of South Aegean in GDP per capita and thus rank second after the Region of Attiki.

In a similar fashion the Local Vice – Governors were asked about the prospects of the corresponding Regional Unities they are in charge of. An increase of international flight arrivals to Kefalonia is expected (estimated at a record high of 370.000 arrivals) while the number of cruises and sailboats approaching the island is expected to double. The arrivals from Italy (Bari, Brindisi) to Kefalonia are expected to show increase by a factor of 8. A positive impact is expected from the daily ferry boat line connecting the Ionian Islands that started on 1st of May 2018. A similar situation was described about Lefkada with the city of Lefkada having the best prospects. The island of Lefkada has a deficit in infrastructure: there is a lack of big hotel units and there is still a need for more and improved marinas to cover the high demand for services to yachts. One negative prospect for Lefkada is the expected surges and overloads of its capacity in all aspects (traffic network, waste

Postgraduate Dissertation 45 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region management etc.). This is due to the fact that access to Lefkada is easy as it is accessible by road from the mainland which increases dramatically the number of passing-by visitors who make use of services but do not use accommodation or do not really spend money during their short stay. The airport of Aktio (former military base) serves the island of Lefkada. The time it takes to travel from airport to Lefkada is expected to be shortened to 10 minutes when the Para-Ionia Road construction is finished.

6.1.17 Vision – what needs to be accomplished At the end of all interviews we asked the interviewees to talk about their vision for the corresponding entity that they represent and discuss what they would like to achieve that has not already been achieved.

It was impressive to hear the Vice – Governor for Tourism giving a totally unexpected and unconventional answer. He said that his vision is for education and culture (he used the Greek word “Παιδεία” which is wider than just education) to prosper and improve in the Ionian Islands Region and for measures to be taken to fight against functional illiteracy. It is a well-documented fact that the regions of Greece that show high tourism development also display a significant decrease in all indicators concerning education and culture. One very simple explanation for this is that the easy access to jobs in tourism that do not require very special skills or university studies lowers the rates at which people seek higher or specialized education. It was striking to hear this from the Vice – Governor from tourism (himself a hotel owner and for many years President of the Kefalonia Hotel Owners’ Association) as one would expect a vision more directly associated with the immediate needs of the tourism industry of the Region. His response to this remark is that tourism is in more need of education than any other business sector and he stressed his belief that education and culture would strengthen both the quality and the profitability of the tourism sector by increasing the educational level of the citizens and thus improving their attitudes towards social, economic and political issues that directly affect all aspects of everyday life and of course tourism.

The Vice – Governors where similarly asked what they would like to achieve that has not already been achieved in the context of the corresponding Regional Unities. In the Regional Unit of Lefkada creating an underwater diving park as well as adding the waterfalls of Nydri and the forest of Skaroi in the destinations that will be made accessible and attractive for visitors and tourists through special development and promotion projects are among the interventions that have not been achieved yet but would be worth a try. In the Regional Unit of Kefalonia the construction of the Port of Pisaetos in Ithaki, the creation of a Cave Park in Kefalonia and the completion of important infrastructure projects that have been delayed due to legal or practical problems are seen as fundamental endeavors for the near future.

6.2 The Municipalities' approach to strategic planning in Tourism

In what follows we present the results of our research/interviews that provide insight into the approach of the Municipalities of Ionian Islands.

We interviewed the Vice-Mayors in charge of Tourism as well as staff members if the Municipalities of the Ionian Islands. We have also, where necessary, incorporated

Postgraduate Dissertation 46 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region information that was available from other interviewees of both the public and the private sector.

6.2.1 Strategy content The Municipalities are the public-sector entities that are the most proximal to the citizen than any other public entity. They take care of the most vital and important every-day issues including water supply, waste management, traffic networks etc. while their role in other aspects of the citizen’s life is equally important (e.g. education, culture, public health etc.). All the Municipalities of the Ionian Islands have appointed a Vice-Mayor for Tourism who, among other officials and staff members of the Municipalities, was the primary source of information about the strategic goals of the Municipalities for tourism development and promotion. Whenever possible we interviewed other officials and staff members of the Municipalities (the Mayor, other Thematic or Local Vice-Mayors of major touristic areas in the bigger islands, members of the Municipal Tourism Committees, staff members of Municipal Tourism Offices etc.).

The core strategy of the Municipalities with respect to tourism is centered around tourism promotion according to the Vice-Mayors for Tourism. There might be different variations in the mixture of means and targets as well as the product and marketing mix depending on the Municipality and the size of the respective market but nevertheless the core strategy is about tourism promotion rather than tourism development. The explanation for this can be traced in the fact that infrastructure and related projects are usually under the authority of other Thematic Vice – Mayors and thus the explicit or implied strategies related to tourism development are embedded in the general Municipal strategy for local development. Nevertheless, all officials and stuff (including Vice – Mayors for Tourism) were able to discuss the elements of tourism development strategy and the necessary actions that need to be taken. Another explanation is that funding for development projects is sought from Regional, Central Government or EU funding sources and thus follow pre-tailored strategic goals to which the Municipalities inevitably adapt.

A unifying theme in the Municipal strategies is that of culture. Indeed, the Ionian Islands as a whole have a unique cultural heritage that is distinct from that of mainland Greece. It has been greatly influenced by British and Italian culture (due to respective periods of occupation) while there is a distinctive lack of Turkish influence (which is clearer in Regions of mainland Greece as well as the Aegean Islands). All Vice-Mayors for Tourism stressed the fact that a significant part of tourism promotion is based on culture while the Municipal Companies for Culture collaborate closely in that direction (a great number of cultural events are organized during the summer having the locals as well as the tourist visitor in mind).

The variation in Municipal strategies for tourism stems from the differences in the product offered by each island, as well as the views, beliefs and approaches of the people in charge or involved. Corfu and Zakynthos are the most popular destinations in the Ionian Islands and receive the highest share of international flight arrivals. In those islands quality of tourism (versus quantity), prolongation of the tourism season and even spread of the tourism traffic are more important together with being able to increase tourism receipts for the same tourism load. In terms of infrastructure Corfu and Zakynthos (together with Lefkada face serious problems with waste management). Kefalonia and Lefkada having a significantly

Postgraduate Dissertation 47 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region lower share of tourism traffic relative to their size, capacity and future potential face a dual problem of both increasing arrivals and improving the infrastructure to accommodate the higher traffic. Finally, for the small islands (Meganisi, Paxoi and Ithaca) the main issue is to solve problems of accessibility (transportation frequency, ports, etc.) as well as visibility (tourism promotion) given the fact that their resources are extremely limited for the sizes of the markets they need to be present in.

6.2.2 Strategic process Articles 203-207 of the Code of Municipalities and Communities (Law 3463/2006), the obligation for the preparation of Operational Programs by the first municipalities was established and Law 3852/2010 (“Callicrates” Program), Article 266 states that for the medium-term planning of the Municipalities, the Five-Year Technical Operational Program is being prepared, which is annually analyzed in the Annual Action Program and annual Budget.

The preparation of Strategic and Operational Plans of the Municipalities is assigned by the Mayor to a special project team and is finally approved by the Municipal Council after a period of public consultation. In brief the five-year plans include: 1. Strategic plan, 2. Operational plan, 3. Financial plan, Monitoring and Evaluation Indicators. The five-year plan is specialized into the Regional Annual Action Plans.

Municipalities in tourism destinations prepare an “Operational Plan for Tourism Promotion”. This plan usually prepared by the Municipal Committee for Tourism Development and Promotion. The Operational Plan is then approved by the Municipal Council and submitted for the final approval of the GNTO.

All the Municipalities of the Ionian Islands have set up a Municipal Committee for Tourism Development and Promotion and all have prepared operational plans for tourism promotion.

6.2.3 Resources for strategy The financial crisis and the budgetary adjustments imposed by the bail-out programs that followed left the Municipal Authorities with less than half of the pre-crisis budget and with a constantly diminishing staff-force as there is an imposed ban / quota limit for hiring new staff (even when employees are retired or leave). Therefore, the Municipalities have limited resources even for the most basic and vital everyday-tasks. This has also affected the resources available for tourism. The available budget for tourism promotion is at the order of 30.000 to 100.000 € per annum for the larger municipalities (the budget is significantly less for small islands). The larger Municipalities have in average one staff member assigned to tourism while the Municipalities of the small islands either use Municipal staff non- exclusively when need or share the burden with members of the tourism committee (not members of staff).

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6.2.4 Legal framework / environment Almost all Municipal officials referred to the Law 4212/2016 on Public Procurement as the most important and insurmountable obstacle in their role in the field of tourism. Law 4212/2016 introduces requirements that lengthen and render difficult even simple and low budget public procedures especially for the severely understaffed small-island Municipalities.

Many officials referred to the general legal framework for the responsibilities of the Municipalities as well as the corresponding funds to fulfill them. In certain cases, the Municipalities are deprived of responsibilities that clearly fall in the scope of “local affairs” mentioned in the Greek Constitution and whenever the responsibilities are rightly attributed to the Municipalities the necessary funds are not granted thus rendering them void of real meaning.

6.2.5 Secondary actions related to tourism strategy A close inspection of the Strategic Plans of the Municipalities of the Ionian Islands reveals that in their entirety they are full of references to tourism even outside the main strategy for tourism development and promotion. A significant number of corresponding actions and interventions contained in the plan have a contribution to the tourism sector (e.g. infrastructure, culture, development projects etc.). Due to the importance of the sector for the local economy, tourism is a major consideration in most aspects of the strategic planning of the Municipalities.

Most Municipal officials share the view (also expressed by regional officials) that all actions that improve the quality of life has a positive effect for tourism. A high priority in the majority of the Ionian Islands is waste management, water supply networks, biological wastewater cleaning installations etc. while in the islands of Kefalonia, Lefkada and Ithaki repairing infrastructure affected by recent earthquakes is also an important task.

Certain Municipal officials have expressed the view that the existing process for planning actions and interventions that are secondary to but important for tourism (infrastructure, projects, etc.) is not sufficient and satisfactorily effective.

Waste management in particular is a really hot issue for most Municipalities. The exemption is the Municipality of Kefalonia which managed to find a viable and well-organized solution since the '80s. A relatively isolated and sufficient in size waste disposal and processing site was found very early, before the problem became pressing. Moreover, an inter-municipal enterprise was established (at that point Kefalonia was divided in 7 Municipalities and 1 Community) in order to take over the responsibility of waste collection and management on behalf of the stakeholder Municipalities. The existence of sufficient space and well- organized entity gave Kefalonia island not only the opportunity to take advantage of most national and EU funding opportunities for the upgrade of the waste management and processing facilities but also the name of the “cleanest island”. Unfortunately, this was not the case for Corfu, Zakynthos and Lefkada which have now run out of garbage collection capacity in existing sites as well as of options for finding new waste deposit and processing sites due to the existence of nearby activities (tourism sites, villages etc.). The Municipal authorities in all three islands find themselves in the crossfire of citizens’ groups which on one hand request a solution in waste management and on the other hand resist the opening

Postgraduate Dissertation 49 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region of new locations near their regions. This situation often results in turmoil and even the arrest of Mayors for not fulfilling their duties with respect to garbage collection and / or violating environmental law when they desperately try to fit garbage in the overloaded existing sites. Tourists and citizens have witnessed in the summer, certain periods during which garbage piles remain uncollected for days under the sun and the heat. The small islands rely on the neighboring Municipalities for waste collection and thus their problems are interconnected with the ones faced them.

6.2.6 Evaluation of strategy The role of the Municipalities in final tourism product is effective in two different levels: 1. The direct involvement of the Municipality in the actions for the promotion of local tourism is important as they build upon and stress the special characteristics and features of the specific destination (as opposed to umbrella promotion campaigns for the larger Region and / or Greece) and helps the local tourism industry to cope with both intra-regional and inter-regional competition. 2. The Municipalities are responsible for, intervene when needed and undertake projects for both infrastructure and culture. Water supply, waste management, road networks etc., protection of natural areas and resources, cultural events, festivals etc. are only a few of the actions that despite having the citizen as the primary focus are vital for tourism development. At this level there is no other public-sector authority (regional, central etc.) that could replace Municipal authorities in their role and the primary reason is the proximity to the citizen which allows the provision of the right services needed at appropriate place and time.

In both these levels the contribution of the Municipal Authorities is vital and irreplaceable as any other authority is not able to respond to the needs of the citizens as well as to the needs of the local tourism industry in a way that is specific and appropriate. As it has been pointed out by many interviewees a simple proof for this is the fact that Municipal Authorities are the primary receptor of requests or even complains from the citizens and the enterprises when their needs are not covered and this also applies to the tourism sector. Municipal Authorities are the ones to refer to for the condition of beaches, the cleanness of the roads, the lights in the streets, the response to natural disasters and almost any other need.

The assessment of the contribution of the Municipal Authorities in tourism development and promotion is not standardized and therefore it cannot be efficient enough to help in adapting and improving the strategies on the basis of measurable achievements. Of course, the submission of annual reports about the progress of the actions included is expected and implemented for both the Municipal Strategic plan and the Operational Plan for Tourism Promotion. Moreover, indicators are used for the monitoring of the Strategic Plan.

6.2.7 Documentation As an example, the Annual Report of a Municipality about the implementation of it Operational Program of Tourism promotion might include points like: • The meetings of the Municipal Tourism Committee during the past year (scheduled or not). • The production of information booklets and leaflets. • Advertisements in press and electronic media.

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• Participation in tourism exhibitions or exhibitions promoting local goods. • Activities for promoting cruising tourism. • International partnerships. • Participation / implementation of funded projects (national / EU) about tourism.

6.2.8 Channels with public / private sector For the Municipalities one first, institutional channel of communication and consultation with the private sector on issues of tourism development and promotion is that of the Municipal Tourism Committee as in most cases its members include representatives and key figures from the private tourism sector. There are cases in which the anthropo-dynamics and the politics involved prevent the Tourism Committee for functioning as good as it should and / or constructively. On the positive side, the Municipal Authorities have the opportunity to get feedback from the private sector on the effectiveness and efficiency of their actions in the field and even get direct information about problems, initiatives or innovative approaches. A negative point is that the committee is bound to be operating under the authority of the Municipality which also provides the funding of all its actions and thus the operation of the committee cannot be a free open gathering of equally contributing partners (whenever it avoids being affected by political confrontations).

Some officials have expressed the view that even under ideal conditions and positive climate the operation of the Tourism Committee is not enough for establishing the necessary collaboration with the private sector. Therefore, in addition to this channel and in an effort to overcome its shortcomings most Municipalities and Vice-Mayors for Tourism also try to have more direct contact with the associations and entities representing the tourism sector whenever political confrontation does not get into the way.

6.2.9 Partnerships with private sector As it is the case with Regional Authorities, the Municipal Authorities have developed collaborations and partnerships that mainly concern the occasional support of the needs of meetings, events and missions related with the tourism promotion. Mostly individual enterprises and occasionally professional associations offer accommodation, catering, services, organizational or even financial support for initiatives of the Municipalities.

In certain cases, the collaboration extends in areas in which there is mutual benefit. For example, it has been mentioned that the Municipalities cooperate with the wedding tourism industry as it contributes to the promotion of the destination.

6.2.10 Formal channels of consultation Most of the Municipal Officials interviewed supported the view that there is no need for other formal channels of consultation / cooperation with the private sector. The existing channels of communication are sufficient but their effectiveness and efficiency is a topic for further debate.

6.2.11 Cooperation with Regional Authorities The Regional Authorities participate in a number of exhibitions in which the tourism in Ionian Islands is promoted. In many of those missions the Municipalities are represented by

Postgraduate Dissertation 51 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region staff member and / or the Vice-Mayor for Tourism and stands for the promotion of the respective islands are included and supplied – whenever available – with promotional material from the Municipalities and occasionally with local products. The common participation in exhibitions, conferences, meetings and debates about tourism is one standard form of collaboration of the Region with the Municipalities of the Ionian Islands and quite often it is scheduled and organized as it forms part of the respective Operational Plans for Tourism Promotion of the Region and the Municipalities.

A common source of tension and disagreement is the fact that the Regional Authorities tend to promote the Ionian Islands as an entity while there is an intra-regional competition of the Municipalities for increasing their share in the regional tourism market. This “Regional versus Municipal branding” discussion has many implications and affects the collaboration between the two degrees of local authorities.

Another issue that very often comes up from the side of Municipal Officials is that of the lack of collaboration in Development Planning. The Regional Authorities are directly involved in the preparation and the monitoring of the “Regional Operational Program Ionian Islands 2014-2020” which determines the allocation of EU funds. The involvement of the Municipal Authorities is minimal and indecisive in most respects despite the fact that the vast majority of the funded projects concerns subjects under their direct authority and interest. In that context the Municipal Authorities support the view that, as it is the case with the central government, the Municipal Authorities are treated unequally and they are denied a say in most important aspects of local development planning. This forces the Municipalities to “beg” for funding creating dependence relation with the entities that exert their power on them. This view and argument is equally supported in the field of tourism development and promotion.

6.2.12 Agreement of strategy with Regional Authorities As it was mentioned above a fundamental issue between regional and municipal authorities is the lack of coordination and collaboration during the design, monitoring and implementation of the strategic plans for regional development, especially the EU funded “Regional Operational Program Ionian Islands 2014-2020”. This involves the regional development as a whole and not just the part that concerns tourism development. The argument on behalf of the municipal authorities is that they should have some control over the development planning as it concerns their areas and it is the Local Authorities that have the benefit of close proximity to the citizens thus being able to respond quickly and accurately to their needs. On the other hand, the regional authorities usually blame the municipal authorities for being localist and sectionalist and having narrow strategic thinking.

This whole set of arguments is carried on in the tourism sector. The Municipal officials claim that there is a divergence of views in the strategy for tourism development and promotion. According to their view the Regional Authorities take advantage of their dominance in the handling of the ROP funds without consideration for alternative views and approaches in the solution of problems, the design of infrastructure and the promotion of tourism.

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On this lack of strategic coordination and the divergence of views the “regional versus local brand” issue mentioned earlier has surfaced. The regional authorities put a lot of effort and money in promoting the “Ionian Islands” brand and make it popular in search engines and online media. The argument of the municipal authorities is that each of the Ionian Islands have a well-known and established brand name of their own. Corfu was well known even before Greece became known as a tourism destination, Ithaca is a centuries-old international brand thanks to the adventurous Ulysses and Homer’s work, Paxoi, Lefkada, Meganisi and North Kefalonia are well known destinations for yachting and sailing tourism and Zakynthos have built a brand of its own. What's more, each of those destinations has managed to achieve high visibility among national tourism destinations and occasionally feature in the top preference positions. All this means, according to the municipal authorities that the use of “Ionian Islands” brand obscures rather than promotes some already famous destinations. A counter argument from the regional authorities is that this resistance to a regional brand name has its roots in the competition of the individual islands against each other. And although this might, to a certain extent, be true it does not explain the universal agreement among all islands.

It is true that both sides have solid arguments which are pretty convincing but it is also true that both approaches have both positive and negative points. An objective and impartial look into this problem (to the degree that this is possible) would reveal that this is not a bipolar disagreement that could be solved by mere confrontation or compromise. It is a non-trivial problem with no singular or magic solution. The heart of this problem lies in the strategic management of the development of the region as a whole and such a strategy would necessarily require bold decisions and perhaps the brave transfer of funds from the more developed islands to the less developed ones.

6.2.13 Views on private sector strategy. According to the Municipal Officials one key problem with the associations and representing bodies of the private sector is that quite often micro-politics go above the real problems of the sector. They claim that the representatives of the private sector use their position to promote personal political ambitions or resort to confrontation in purpose in order to achieve political gains for the political parties or political groups they belong to. Thus, their strategy seems to be that of meaningless political confrontation without a real view for the real problems and needs of the tourism sector.

This is the main reason for Municipal Officials having a better relation and collaboration with individual enterprises rather than representing bodies.

According to some Municipal Officials the strategy of the private sector is problematic due to the distorted growth model followed by the country as a whole over the past few decades. In the core of this model was the concept of easy money earning and big profits without any regard in business viability, sustainability, the social, environmental impact of the practices followed etc. This approach is not viable under the pressure of the economic crisis, the international competition and the toughening regulation and taxation of the market. There is a slow but steady process of abandoning this growth model and now more viable and sustainable approaches are adopted.

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6.2.14 The role of major businesses In all the islands there is at least one example of large enterprise in the tourism sector that somehow affects the market and its views. Some of them have been established by really enlightened entrepreneurs with a good understanding of the local as well as global markets and a good instinct on what are the appropriate responses to the changes experienced. Such cases do not only serve as examples of successful tourism business but also become basic actors of the local tourism development strategies as they influence both the private and the public-sector approaches. It is among them that the Municipalities find the sponsors and active supporters of initiatives like investigating the prospects of new markets or promoting the local tourism product. In many cases, the founders of such enterprises have a de facto status of the “representative” of the sector whose opinion receives attention and is respected by the Municipal Officials even if the relation with the institutional / official representatives does not allow them the benefit of a constructive discussion.

6.2.15 Need to change public – private sector cooperation The Municipal officials believe that the current state of public – private cooperation on tourism needs to be revised and changed. Some officials state that the private sector needs to make steps in order to approach and collaborate with the public sector more constructively. The lack of organized interventions in the pressing problems that concern the tourism sector on behalf of the private sector is regarded as an issue attributed to the lack of team spirit and culture. As it was characteristically stated “tourism is the task of a choir not of a solo singer”.

6.2.16 Position and prospects of Municipality and the Ionian Islands The view of the Regional Authorities about the positive prospects of the tourism industry in the Ionian Islands (individually and as a whole) is also shared by the Municipal Authorities. The only difference is that the Municipal Authorities are on one hand worried about the negative implications this increase flow might have with respect to untreated problems and malfunctions of the local tourism market and on the other hand try to see alternatives that could improve the situation. The continuous improvement of infrastructure, the alertness of the local tourism market to rapid changes in the global tourism market and the competition pressure, the development of alternative tourism options (environmental, religious, cruising, etc.) are among the topics that come up when future prospects are discussed.

6.2.17 Vision, what needs to be done The vision of Municipal Authorities with respect to tourism often relates to big infrastructure projects that would significantly improve the image of the respective island and the services offered. Apart from that two interesting topics came up when Municipal Officials were asked about their vision and what they would like to achieve that has not been already achieved. The first concerned the cultural element. More than one official insisted on the idea that the strong element of the Ionian Islands as a set of distinctive destinations, and a unifying feature as such, is that of culture. According to this recurring view a methodic, stronger use of the element of culture in the development and promotion of tourism in the Ionian Islands would add value to the final product.

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Another view expressed is that a major accomplishment and a vision would be to have the entities involved in tourism collaborate for the benefit of the local tourism market and the development of the island.

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7. The private sector in tourism

7.1 The structure of the tourism private sector

7.1.1 The heterogeneity of tourism Tourism is a socio-economic activity that is heterogenous by nature. This renders a complete approach as well as the precise definition of the boundaries of tourism activity difficult. Vacations are a complex product that does not represent a single good or service that can be offered for direct sale to tourists. Accommodation, transportation, recreational services, restaurants, tourism infrastructure etc. are sub-products of this complex product (Barbaresos and Christidou, 1999).

The heterogeneity of tourism makes the precise definition of the tourism private sector elusive and therefore analyzing the full range of private sector actions and strategies that affect tourism is made difficult.

7.1.2 General structure The tourism sector has a dual structure (Keller, 2004, no date). The organization of travels, transportation and provision of tourism related information is done in an industrial scale and manner by big companies, mostly located in the countries of origin of tourists. They use global or international strategies in order to exploit the capabilities of tourism destinations and provide services and products that follow standards. The services and products consumed by tourists at the destinations of their travel are produced by small and medium sized enterprises (SMEs) at retail level. Most of those SMEs belong to the services sector (accommodation, food and beverage, events industry, sports, local transportation, etc.).

Our interest lies in the strategies of the private sector consisting of the destination - side SMEs for which the strategies of large enterprises of the travel and tourism industry (travel agencies, airline industries, tour operators, booking companies etc.) are part of their external environment in which they have to survive and compete.

According to the Hellenic Statistical Authority15 93% of the total number of enterprises in the hotel and restaurant sectors have 0 – 9 employees. This is a general trend for all OECD countries where SMEs with 0 – 9 employees are 60% - 90% of all companies in most sectors related to tourism such as hotels, travel agencies etc. while the larger companies get more than half of the total turnover (OECD, 2005).

A unique feature of the tourism industry at the final part of the travel is that competition does involve destinations before it starts involving companies. Tourists select the destination of their trip before they start selecting the range of services they require during their stay. This reality creates the need for the promotion of destinations which has the features of a

15 http://www.statistics.gr/el/statistics/-/publication/STO09/2015

Postgraduate Dissertation 56 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region public good. While all local companies and citizens are beneficiaries of destination promotion the private sector is reluctant to pay for its cost.

In this work the main focus is on the tourism accommodation sector (hotels and apartments) and the core of interviews was with representatives of associations or selected entrepreneurs from this sector. Although the contribution of other sectors is equally important (restaurants, cafes and bars, transportation, culture and events industry etc.) the time, resources and scope of this work did not allow a detailed look into them. This gap was partially covered by interviewing the representatives of the local Chambers of Commerce who have a broader view of the various tourism subsectors.

Moreover, we focused more on associations rather that individual businesses as the main scope of this study was to understand the formation of strategies of the private and the public sector in tourism as a whole and the interaction between the two sectors in forming their strategies. The strategies of individual enterprises, although very important in order to understand the micro-dynamics of the private sector, could be analyzed more methodically using quantitative methods. Nevertheless, we interviewed selected entrepreneurs in order to understand how the strategies of the public sector as well as the strategies of the private sector associations are perceived in practice and how this affects the strategies of individual enterprises.

7.1.3 Accommodation: Greek law categories According to the recent law for the simplification of operating procedures for tourism business and tourism infrastructure (law 4276/2014 / GG 155A) the tourism enterprises are categorized as: 1. Tourism accommodation 2. Facilities of special tourism infrastructure 3. Travel agencies 4. Car rental agencies 5. Motorcycle, Triple and Quad-bike rental companies 6. Road transport companies 7. Ship-charter offices Tourism accommodation is divided in the following categories and subcategories: a) Primary hotel accommodation i. Hotels ii. Camping iii. Youth hostel iv. Complex tourism accommodation v. Condo hotels vi. Tourism hotels in protected areas b) Non-primary hotel accommodation i. Villas ii. Furnished apartments iii. Rooms to let

Primary hotel accommodation is categorized according to a system of stars into five categories (e.g. one-star hotel, two-star hotel etc.) while non-primary hotel accommodation is categorized according to a system of keys into five categories (e.g. one-key apartments,

Postgraduate Dissertation 57 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region two-key apartments etc.). The requirements for the classification of tourism accommodation into the star and key systems are set by Minister Decrees (authorized by law 4276/2014) while the Hellenic Chamber of Hotels is responsible for deciding about the classification.

The enterprises that run primary-hotel accommodation are by law members of the Hellenic Chamber of Hotels while the enterprises that run non-primary-hotel accommodation are by law members of the local Chamber of Commerce16. The enterprises can join their respective employer’s association namely the Local Hotel Association for primary and the Local Federation of Tourism Accommodation Enterprises for non-primary hotel accommodation owners. Those employer’s associations are, at the national level, members of the Hellenic Hoteliers Federation and the Greek Confederation of Tourist Accommodation Enterprises respectively.

7.2 Tourism Associations and Employer’s Associations

7.2.1 Tourism Associations There are three basic requirements for establishing a tourism organization or a tourism association that concern the relation of the respective members: 1. The degree of participation. 2. The number of activities. 3. The degree of communication. Those pre-requisites stem mainly from the small size of the tourism enterprises, the fragmentation of strategic goals and competences of the tourism association and the lack of joint concerted actions in sector, peripheral or international level. Fulfilling them aims at the adoption of common accepted strategies and actions (Barbaresos and Christidou, 1999).

The umbrella of a tourism association for the many small member-enterprises creates economies of scale and thus makes possible the achievement of goals that would not otherwise have been possible for individual enterprises. Moreover the tourism association offers a better profile and better negotiating power in representing the sector interests (Barbaresos and Christidou, 1999).

The foundation of tourism associations is deemed necessary given the specific features of the organization and functioning of the tourism sector which include (Barbaresos and Christidou, 1999): • The independence of the sectors involved. • The, usually, small size of the enterprises. • The high fragmentation of the tourism markets. • The usually huge distance between the destinations and the places of origin of the tourists (especially for international tourism).

Organizations and associations are founded in order to fulfill a set of aims. Those aims are commonly accepted by the members and their fulfillment is achieved by concerted actions

16 The Article 6 of the Legislative Decree of 12/12/2012 (GG A 240/12.12.2012) abolished the compulsory registration in the Chambers of Commerce that the Law 2081/1992 (GG A 154) established.

Postgraduate Dissertation 58 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region that require the existence of administration mechanism and organizational structure. This means that there is a need for a series of inflows from external sources including financial, labor, information, equipment etc. The aims of the association can be long or short term and often they represent the interests of the more powerful group (Barbaresos and Christidou, 1999).

There are many different categories of tourism associations (international, peripheral, national, regional, prefectural, provincial, local, government, non-government etc.). The employer’s tourism associations are involved in collective labor agreements.

7.2.2 Tourism Employer’s Associations According to Article 12 of the Greek Constitution which defines the right of association, employers as well as employees are free to establish associations and non-profit unions. The exercise of this right by the employers is regulated by Civil Law (Civil Code Articles 78 onwards) and / or from law 1712/1987 (GG 115A) that applies the professional associations as it was amended by law 2081/199217 (GG 154 A). The professional associations of hotel owners follow the Civil Law as the Article 7, paragraph 7 of Law 2160 / 1993 (GG 118 A) explicitly declares that law 1712/1987 does not apply to hotel owner associations. This exemption was the result of disagreement on the applicability of law 1712/1987 to hotel associations. The view that prevailed was that law 1712/1987 focuses on the organization of sectors according to individual persons and not impersonal enterprises (legal entities) and thus its application to the tourism sector was excluded. In order to point out this impersonal dimension some associations changed their title from hotel-owner associations to hotel associations (Barbaresos and Christidou, 1999).

The tourism employer’s associations are mostly purely sectoral, i.e. they represent the interests of a single tourism sector. There are two exceptions: the Greek Tourism Confederation (SETE) and the General Pan-Hellenic Federation of Tourism Enterprises18. The tourism employer’s associations are involved in the signing of collective labor agreements together with labor unions (since the 2012 legislature associated with the bail- out programs the salary levels are not part of the labor agreements as they are set by law).

7.3 Greek Tourism Confederation (SETE)

7.3.1 Brief history of SETE

On 31st of October 1991 nine entrepreneurs from the tourism sector met in Elounda Mare Hotel in Crete in order to discuss the present and future of Greek tourism. They decided to attempt the mobilization of the entrepreneurs of the wider tourism sector with the core slogan of quality. That meeting was the starting point for the birth of the Greek Tourism Confederation (SETE). The first board of directors was formed in 1993. The first years were not easy for the operation of SETE as it was often blamed from other tourism associations

17 Law 2081/1992 concerns the regulation of the institution of the Chambers of Commerce, professional associations etc. and it has been amended by law 3419/2005 (GG 297 A / 6.12.2005) and recently by law 4497/2017 (GG A 171 / 13.11.2017). 18 It represents Greek Travel Enterprises (http://poet.gr/).

Postgraduate Dissertation 59 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region for acting as a lobbying group that took care of the interests of the large enterprises of the sector. Later, though, almost all sectors joined SETE including the Hellenic Hoteliers Federation. The second board of directors was wider and was formed in 1997 while in later years (after 2005) the keynote speaker in the General Assembly of SETE was the prime minister. SETE started being in the center of all developments regarding tourism, actively shaping many of them. SETE became a member of the World Tourism Organization in 1993 and in 1997 got the place of the Vice-presidency of the Executive Committee of the Business Council of the Organization (Kousounis, 2008).

7.3.2 Member Unions Today the following unions of tourism enterprises are members of SETE (information reproduced from www.sete.gr19): • Hellenic Hotel Federation (HHF – hhf.gr) – Companies: 6.500, Jobs: 123.000 • Confederation of Entrepreneurs of Greek Tourism Enterprises (SETKE – www.setke.gr) – Companies: 39.543, Beds: 530.137, Jobs: 80.000 • Association of Passengers Shipping Companies (SEEN – seen.org.gr) – Companies: 24, Boats: 97, Jobs: 5.000 • Association of Organized Branded Food Service Chains (S.EP.O.A.) – Companies: 9 • Hellenic Association of Professional Congress Organizers (HAPCO – www.hapco.gr) – Companies: 106, Jobs: 20.000 • Hellenic Association of Travel & Tourism Agencies (HATTA – www.hatta.gr) – Companies: 1.500, Jobs: 18.000 • Hellenic Professional Yacht Owners Association (HPYOA – www.epest.gr) – Companies: 500, Boats 3.500, Jobs 15.000 • Greek Car Rental Companies Association (GSRA – www.steea.gr) – Companies: 150, Cars rentals: 140.000, Jobs: 9.200 • General Pan-Hellenic Federation of Tourism Enterprises (GEPOET – poet.gr) – Companies: 1.400, Jobs: 4.950 • Hellenic Air Carriers Association (HACA) – Companies: 12, Airplanes/Helicopters: 70, Jobs: 2.855 • Association of Hellenic Outdoor Activities Enterprises (HATEOA – hateoa.gr) – Companies: 61, Jobs: 242 • Hellenic Ports Association (ELIME – www.elime.gr) – Companies: 13, Jobs: 1.650 • Hellenic Association of Airlines Representatives (SAAE – www.saae.gr) – Companies: 19, Jobs: 1.175 • Greek Marinas Association (GMA – greek-marinas.gr) – Companies: 20, Boats: 22, Jobs: 600

Apart from the Unions of Tourism Enterprises there are also Independent Tourism Enterprises that are members of SETE.

7.3.3 Institute of the Greek Tourism Confederation (INSETE) The institute of the Greek Tourism Confederation was established in 2013 by SETE, HHF, HATTA and SETKE as a non-profit organization. The purpose of INSETE is to operate as

19 http://sete.gr/en/who-we-are/sete-in-numbers/unions-of-tourism-enterprises/

Postgraduate Dissertation 60 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region a think tank for the promotion of public and private strategies for supporting and improving tourism in Greece as well as other related sectors. INSETE provides scientific support and documentation for the participation of SETE in the public debate, the shaping of its views and proposals aiming at the update and upgrade of tourism in Greece and it is involved in implementing research projects, information and dissemination actions, human resource and certification projects.

The actions that INSETE implements include (INSETE, 2017): 1. Scientific support of SETE: a. Formulating policy proposals. b. Documentation of positions in key issues for the tourism sector. c. Coordination of thematic committees. d. Participation in committees and working groups. 2. Strengthening of skills: supports the qualitative improvement of the tourism sector through the strengthening of the skills and knowledge of the human resources. 3. Support for competitiveness: provision of information and tools for the improvement of the services and products offered by the tourism enterprises. 4. Contribution to development: promotes the position and contribution of the tourism sector in sustainable financial, social and cultural development both at national and European level. The four main pillars through which INSETE implements its actions are: 1. Co-funded programs: design and implementation of co-funded and international programs. 2. Studies, Research, Statistics: Monitoring, documentation and information dissemination about the tourism sector through the statistical analysis of data, the conduction of research, the preparation of studies and reports. 3. Educational actions: strengthening and development of the skills, abilities and culture of the human resources of the tourism sector through the implementation of educational and training actions. 4. Regional Offices of SETE: the following offices / hubs are in operation: a. Ionian Islands (city of Corfu). b. Peloponnese (Tripoli). c. Central Macedonia (Thessaloniki). d. Central Greece (Lamia). e. South Aegean (Rhodes).

7.4 Hotel associations

7.4.1 Hellenic Chamber of Hotels (HCH) The Hellenic Chamber of Hotels (HCH) acts as an advisor of the Greek state in the field of tourism. All hotels in Greece are members of the Hellenic Chamber of Hotels which is a legal person governed by public law (see section 5.3.4).

7.4.2 Hellenic Hoteliers Federation The Hellenic Hoteliers Federation was established in 1949 and is based in Athens. It is an employers’ association and represents more than 60 Hotel Associations from all regions of

Postgraduate Dissertation 61 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

Greece. The purpose of the Hellenic Hoteliers Federation is the study, protection and promotion of the common economic, social and professional interests of its members.

The Hellenic Hoteliers Federation’s mission is focused, among others, on: • Cultivating, supporting, developing and disseminating the spirit of trade unionism/professional association in the hotel industry. • Studying systematically the problems of the sector and informing its members on the most appropriate solutions. • Encouraging and promoting the cooperation of members, by organizing them into cooperatives, of any economic form, for the most effective defense and promotion of their economic, professional and insurance interests. • Developing a spirit of solidarity and mutual support among members and ensuring conditions for improving vocational training and increasing cultural and educational level. • The cooperation of members to promote the hotel profession at a level reflecting its high mission and the traditions of Greek hospitality. • The negotiation and conclusion with the competent labor unions of employees of Collective Labor Agreements for the employees employed in the hotels.

7.4.3 Local Hotel Associations At the level of Prefecture hotels can become members of the Local (“First Degree”) Hotel Associations which are members of the Hellenic Hoteliers Federation.

The members of the Hellenic Hoteliers Federation from the Ionian Islands Region include: • The Hotel Association of Kefalonia & Ithaca (kefalonia-ithaca-hotels.gr). • The Hotel Association of Corfu (www.corfuhotelsassociation.gr). • The Lefkada Hotels’ Association (www.lefkashotels.gr) Zakynthos is not listed among the members of the Hellenic Hoteliers Federation.

7.5 Non-primary hotel associations

7.5.1 Greek Confederation of Tourist Accommodation Enterprises The Greek Confederation of Tourist Accommodation Enterprises is “third degree” association representing the entrepreneurs – owners of rented rooms and apartments (non- primary hotel accommodation) in Greece. It has 22 member Federations of Tourist Accommodation Enterprises (“second degree” associations) which represent 250 Local Tourist Accommodation Associations (“first degree”).

7.5.2 Local Federations of Tourist Accommodation Enterprises The Local Federations of Tourist Accommodation Enterprises in the Ionian Islands Region that are members of the Greek Confederation of Tourist Accommodation Enterprises include: • Federation of Entrepreneurs of Rented Rooms - Apartments of Kefalonia and Ithaca (kefalonia-ithaca.gr).

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• Federation of Associations of Entrepreneurs of Rented Rooms - Apartments of Lefkada (www.holidaysinlefkada.eu). • Federation of Entrepreneurs of Tourist Accommodation of Corfu (www.oetk.gr). • Federation of Rented Rooms and Apartments of Zakynthos.

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8. The private sector and the strategy of tourism: empirical research results

In this section we present the key findings of our research in the private sector. Representatives of private sector tourism associations as well as selected key representatives of individual tourism enterprises were interviewed.

8.1 Content of strategy

The response of private sector representatives about their strategic goal for tourism development and promotion depended on the type of association they represented as well as their experience in the field. Although wide variations do exist, representatives of Chambers of Commerce and Local Hotel Associations in general tend to have a more global and strategic view of the sector and tend to be more familiar with the strategies and policies put forward by both the public sector (government, regional and municipal authorities) and the strategic leaders of the private sector (SETE and HCH). On the other hand, representatives of the Tourist Accommodation Enterprises tend to approach things from a narrower, sectoral view. What could partially explain the different approach is that, usually, hotel owners are for a longer period in the field (in most cases being their exclusive occupation) while tourist accommodation owners are for a shorter period in the field (quite often being their parallel occupation). Moreover, Hotel Associations and Chambers of Commerce have quite often, more experienced representatives (they have spent more years in professional representation positions) who are, thus, more exposed to information about tourism strategies.

Most representatives from the private sector seem to share the view of many public-sector representatives that tourism development requires investment in infrastructure, culture and professional education / training although this was a spontaneously expressed view without any reference to public sector representatives. Nevertheless, the extent to which this investment must go as well as the exact mixture of actions (i.e. how much on infrastructure, culture, training etc.) is a matter of personal / institutional perspective and a wide variation of views were recorded in our interviews.

In a similar fashion, there is a wide range of views about the strategy that should be followed at the local as well as regional level with respect to tourism promotion. While there are opposing views about the effectiveness of the participation in international tourism exhibitions or on the appropriate mixture of such participations there is almost unanimous agreement on the success and effectiveness of familiarization trips for journalists, tour operations, TV crews, bloggers and opinion leaders.

It is interesting though to realize that in certain cases, although the private sector representatives do not seem to disagree with the core of the regional and local public-sector strategies for tourism they criticize the efficiency and effectiveness of public sector strategies for tourism. There is though fierce criticism of government strategies in tourism (VAT rates, motives for entrepreneurs, insurance policies taxes etc).

Postgraduate Dissertation 64 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

When the strategy of each individual private sector association with respect to tourism comes in focus there are a few visible patterns of common strategy themes which include: • Support for members: the main aim of most associations is the support of its members and indeed this is a core strategic goal expressed by all representatives. This support is necessary in many different ways and mainly through the provision of information and services that help the members of the association cope with changes in law, taxation etc. For example, most associations provided information to their members and some provided necessary material (information material, receipt packs etc.) for the recent introduction of stay-tax as well the application of GDPR (General Data Protection Regulation) by the member enterprises. • Quality: the effort to improve and sustain the quality of services provided is also a central theme in association strategic goals. One issue that is globally encountered in all professional associations is that of the need for “isolating” or “improving” that group of fellow professionals that do not meet the minimum quality standards. In all professions but especially in the field of tourism the mere existence of such a professional subgroup is regarded as a huge source of defamation for the specific sector as a whole. Given the recent wide use of social media and specialized applications (Facebook, Twitter, TripAdvisor, Booking.com etc.) for the expression and publication of end-user opinion about the quality of services this issue has become even more important. Another direction in which associations go with respect to quality is that of either certifying or promoting the provision of quality services. The Greek Breakfast for hotels and the Greek Breakfast Basket for rented rooms and apartments is such an example. • Education / training: closely related with both the support of members and the improvement or maintenance of quality is the aim of many professional associations in tourism to provide educational and / or training programs for their members. Most associations include and implement such educational / training activities in their action plan. • Tourism promotion – development: most associations have already implemented or are planning actions that are related to tourism promotion and / or development. Such actions include: o Participation to tourism exhibitions and shows. o Early opening of seasonal enterprises for servicing early tourists with the coordination of the Chamber of Commerce. o Participation to funded projects that promote cultural events which can attract visitors and tourists. o Organization of Folk Culture Festivals.

The interviewees selected from individual enterprises where mainly selected either due to the size of the corresponding enterprise or due to their experience and strategic thinking.

The views expressed by interviewees selected from individual enterprises about the strategies to be followed for tourism development and promotion have a common feature: they are, as a general rule, clear, simple and to-the-point. Even when they coincide in their views with public or private sector representatives, their approach is more practical and simple. Of course, this has nothing to do with individual characteristics and mentality, it is more a sort of an “occupational deformation”: representatives in both the public and the private sector have to deal with the niceties necessary in the political and social aspects of

Postgraduate Dissertation 65 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region their function. Therefore, they tend to be more pleasurable than practical when the two are not compatible. On the contrary, the entrepreneurs, usually do not have or do not choose to deal with such social norms and have the liberty to employ all necessary means to achieve their goals.

Most interviewees selected from individual enterprises insisted that high quality and product differentiation is the best strategy for their business as well as for local and regional tourism development and promotion.

8.2 Strategic process

There are usually three processes for strategic planning in most associations: • The strategic goals are discussed by the board of directors as a result of annual planning of activities or as a result of requests from members of the association. • The strategic goals are the result of the work of a committee, advisor or are adopted from feedback from external sources (SETE, HCH etc.). • The strategic goals are part of the program that the leading party in the board of directors used in order to get elected.

The strategy for tourism in most associations is prepared by one or a combination of the above processes. In most cases either the strategy is not documented as such or it is more a planned set of actions (operational plan) that has been discussed and decided in the board of directors.

The representatives of individual tourism enterprises that were interviewed were mostly owners of family-operated businesses albeit of large ones for the standards of the local tourism enterprises. Although they could present a clear strategic plan for their business and even discuss specific set of actions for their implementation, as a rule, they do not follow a formalized and documented strategic process. Nevertheless, the operation of the strategic cycle is pretty obvious in their discourse.

8.3 Resources for strategy

The associations that rely on member contributions for funding their activities face serious problems as the participation and financial contribution of members has been dramatically diminished especially after the onset of the economic crisis. For all associations the low degree of member participation does not only create problems for funding the activities of the associations but also for uniting, representing and promoting the interests of the sector. This problem tends to be more intense for the non-primary hotel accommodation associations (rooms and apartments) and milder for hotel associations of the Chambers of Commerce. For some associations the available financial sources are barely covering the most basic expenses like secretarial support and accommodating an office.

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8.4 Legal framework / environment

In general terms the view of association representatives is that the legal framework in relation to the role of their association in tourism development and promotion is adequate with the exception of the Law 4212/2016 on Public Procurement. The associations are legal entities governed by public law and therefore the law 4212/2016 also applies to them and it has similar effects as to the public sector. The administrative operation of the associations is rendered difficult due to the complexity of the procurement process and the lack of sufficient staff members to cover the necessary work-load. Some interviewees expressed the opinion that an organized and institutional role of the associations in co-shaping the local and regional strategies in tourism would help in avoiding the problems that they see to exist now.

8.5 Secondary strategies

Representatives from Chambers of Commerce as well as from Local Merchants Associations were asked about the harmonization of their actions and interventions that are secondary to tourism with their main strategic goals for tourism.

Even in sectors other than the ones directly related to tourism it is again tourism that drives demand. The primary sector shows relatively small production (e.g. compared to units in the mainland) which is not sufficient to cover the seasonal demand which increases dramatically. In cases like olive-oil production where the quality of the product could be exploited there are no secondary sector units to produce packaged products with added value. The wineries have relatively small production. In general terms there is plenty of things to do in order to connect the primary and secondary sector with tourism and this is the area that Chambers of Commerce can act. The support of the primary and secondary sector, the promotion of innovation, the adoption of good practices of added value are areas of action that could be linked with tourism despite the fact that they are ways of facing the tourism monoculture problem.

There are efforts from individual entrepreneurs that need the support and encouragement of both the public sector and the private sector associations and include projects that range from farms accessible to tourist visitors to olive-oil and local product packaging.

8.6 Evaluation of strategy

Usually the strategic goals of the associations are monitored, discussed and evaluated in the context of the function of the board of directors or in the member assemblies when possible. There is no standardized methodology for assessing the contribution of the associations.

8.7 Channels with public sector

The view of many representatives of tourism associations is that the regional and local authorities do not manage to keep up with the current affairs in the regional and tourism

Postgraduate Dissertation 67 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region market. To them, there seems to be no sufficient interest and effort in understanding, monitoring and responding to the real problems of the market. The efforts of the regional and local authorities are regarded as “fruitless travels” with no tangible results.

Although the representatives of tourism associations can back up their view by arguing against the effectiveness of the actions implemented the political background of this divergence of views has to be considered. Political differences outside the scope of tourism development and promotion are quite often the source of disagreement.

The representatives of individual enterprises on the other hand, although critical to both public and private sector representatives, are milder in their criticism and more objective with respect to the circumstances under which the strategies of the two sectors are implemented. Most of them have ongoing collaboration with public sector representatives and / or association representatives and believe that the political confrontation is often the source of disputes and of course the lack of sufficient resources. To their view if micro- politics is left aside then the main problem is the proper allocation of resources and this problem can only be solved if the regional and local authorities work side-by-side with the professional associations of the sector and the individual enterprises that are willing to work constructively and to the benefit of the sector.

8.8 Formal channels of consultation

The view of all the representatives of tourism associations is that there should be new formal channels of consultation and cooperation of the private sector with the public sector in the field of tourism. Quite a few of the private sector representatives referred to “ETIN” the Ionian Islands Tourism Company S.A. as an example of good practice in public – private sector collaboration and consultation while a couple of them even referred to the Prefectural Committees for Tourism Promotion that were introduced in the mid-90s. The positive aspects of ETIN mentioned by the interviewees include the full representation of the whole public and private sector of the Ionian Islands and the sufficient funding it received. ETIN was established in 2002 (see section 9.1.2 for details) and is currently been terminated by decision of the shareholders. The Prefectural Committees for Tourism Promotion where part of the elected prefectural authorities that preceded the reform that replaced them with the elected regional authorities. According to the representatives that used them as a good example of public-private sector collaboration their positive point was that they brought together the public and private sector involved in tourism at the local / prefectural level and thus the planned actions had a well-focused scope.

Most individual entrepreneurs believe that a joint public – private sector entity should exist for the strategic planning of tourism development and promotion. In order for that entity to succeed it should necessarily fulfill two basic prerequisites: to have adequate funding and hire highly trained staff.

8.9 Cooperation with other associations

Most commonly the tourism professional associations cooperate vertically, i.e. the broader organizations provide guidance, resources and support for the narrower ones. The Chambers

Postgraduate Dissertation 68 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region of Commerce provide support to the Tourism Accommodation Federations which in their turn support the Tourism Accommodation Associations under them.

8.10 Agreement of strategy with public sector

The problem with tourism strategies from both the public and the private sector is that politics, micro-politics and vested interests are coming into play and this as a result obscures the main picture and the vision about tourism development and promotion. The best approach would be for each entity to concentrate on issues under their responsibility and authority.

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9. Public-private sector actions & interaction in the strategic management of tourism

In Chapters 5 and 6 we looked into the roles, attitudes and views of actors in the public and private sectors in the field of tourism development and promotion in the Ionian Islands Region. In this chapter we try to integrate this information and look into specific examples of public and private sector actions and interactions (past and present) that could help as understand how the two sectors cooperate and coexist in the field of tourism and also identify future prospects and lines of action.

9.1 Past experience and current affairs

In this section we present and put in perspective past and present examples and cases of actions and the interaction of the public and the private sector in the field of tourism.

9.1.1 Prefectural Committees for Tourism Promotion According to Article 1, paragraph 13 of law 2160/1993 (“Arrangements on tourism and other provisions”): a) In the capital of each prefecture the Committee for Tourism Promotion is established aiming at designing programs for the tourism promotion of the region in Greece or abroad as well as their implementation after the approval of GNTO. The Committee for Tourism Promotion is established with a decision of the Prefectural Governor, it comprises of seven members from the Public Administration, Local Government Organizations20 and tourism productive classes. b) The programs of tourism promotion of the previous paragraph are funded up to 50% by GNTO and for the rest by compulsory contributions of Local Government Organizations and all the productive classes of the region of the prefecture which are defined every year by decision of the Prefectural Governor, proportionally to the requests needed for funding of the regional programs of promotion and in any case within the budgetary boundaries of the programs approved by GNTO. The purpose of this law was the participation of all the actors of the tourism activity at the level of the prefecture in the responsibility and more importantly in funding of tourism promotion. This law merely doubled the budget available by GNTO for each prefecture (Chatzinikolaou, 1995).

According to some of the interviewees that participated in this research the Prefectural Committees for Tourism Promotion were the first institutional body for coordinating tourism activities and had the following positive features: • Collaboration of public sector with the private sector • Collaboration of both levels of local governance. • Coordination with central strategies through GNTO.

20 When the law was passed Local-Government Organizations consisted of Municipalities and Communities while the Prefectures where local branches of the central government. The institution of elected Prefectures (Prefectural Authorities, Prefectural Self-government) was introduced a year later with law 2218/1994.

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• Availability of funds. • Shared responsibility - shared contribution to funding. • Their size was manageable (not too many members, easier decision process).

Among the negative points of the Prefectural Committees for Tourism Promotion that were mentioned are the following: • They had a limited range of responsibilities. • They were focused on tourism promotion and had no authority on tourism development. • Their composition was decided by the Prefectural Governor – it was limited.

9.1.2 Ionian Islands Tourism Company (ETIN) The Ionian Islands Tourism Company S.A. (ETIN S.A.) was founded in Lefkada (29th of April 2002) with an initial capital of 73.375 € having its headquarters in the Municipality of Lefkada. The capital of the company was increased on 4-5-2003 to the amount of 249.475 € (8.500 registered shares).

According to Article 1 of its charter the function of the company is governed by the law for Municipalities and Communities as well as the law 2190/1920 (the law for anonymous companies). According to the updated Article 3 of the company’s charter its general aim is: a) The support of the regional policy for the development of tourism. b) The provision of information and support to the entities of tourism. c) The conduction of research and the preparation of studies on tourism market. d) The application, management and exploitation of EU, national and regional programs of funding. e) The implementation of programs of tourism promotion of the Region of Ionian Islands. f) The certification of quality of the tourism services offered in a regional level. g) The support of actions of tourism activity. h) The introduction to the Regional Council of the Ionian Islands of views and proposals related to tourism.

The shareholders of the Ionian Islands Tourism Company S.A. (ETIN S.A.) as of 12/5/2012 are shown in Table 3 together with the number of shares and the percentage of ownership for each shareholder. A close examination of Table 3 shows that the shareholders of ETIN S.A. included the Ionian Islands Regional Development Fund, Municipalities, Prefectural Authorities, the Unions of Municipalities and Communities of the Prefectures, Chambers of Commerce, Hotel Associations Tourism Accommodation Associations, other professional associations, travel agencies, hotels and other enterprises.

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Table 3 Shareholders of Ionian Islands Tourism Company S.A. as of 18/5/2012. The table was adapted from the company’s list of shareholders. No Title Shares Percent 1 Ionian Islands Regional Development Fund 853 10,035% 2 Prefectural Authority of Lefkada 200 2,353% 3 Prefectural Authority of Kefallinia and Ithaki 400 4,706% 4 Prefectural Authority of Corfu 400 4,706% 5 Municipality of Argostoli (Prefecture of Kefalonia) 200 2,353% 6 Municipality of Lefkada 200 2,353% 7 Municipality of Zakynthos 400 4,706% 8 Municipality of Corfu 1.110 13,059% 9 Local Union of Municipalities and Communities of the Prefecture of Zakynthos 218 2,566% 10 Local Union of Municipalities and Communities of the Prefecture of Kefallinia 200 2,353% and Ithaki 11 Local Union of Municipalities and Communities of the Prefecture of Corfu 150 1,765% 12 Local Union of Municipalities and Communities of the Prefecture of Lefkada 200 2,353% 13 Association of Travel Agents of Corfu 68 0,800% 14 Association of Hoteliers of Lefkada 50 0,588% 15 Association of Hoteliers of Kefalonia and Ithaki 100 1,176% 16 Association of Hoteliers of Corfu 100 1,176% 17 Municipality of Apollonioi (Prefecture of Lefkada) 70 0,824% 18 Municipality of Sfakiotes (Prefecture of Lefkada) 50 0,588% 19 Fidelity AETE Zakynthos 50 0,588% 20 Margari Bros Hotel and Tourism S.A. 30 0,353% 21 Association of Hotel Managers of Corfu 10 0,118% 22 Dafnila S.A. 50 0,588% 23 Greek Casino of Corfu S.A. 200 2,353% 24 Municipality of Meliteieis (Prefecture of Corfu) 30 0,353% 25 Akti Mesogis 100 1,176% 26 Hotel Nefeli 20 0,235% 27 Sp. and Georg. Politis ODEON O.E. 50 0,588% 28 Federation of Associations of Rented Rooms Accommodation of Lefkada 100 1,176% 29 Association of Rented Rooms of Kefalonia and Ithaki 20 0,235% 30 Association of Rented Rooms of Bohali – Zakynthos 10 0,118% 31 KATTA 35 0,412% 32 Pheax AETA 50 0,588% 33 Municipality of Palaiokastritsa (Prefecture of Corfu) 100 1,176% 34 Municipality of Saint George (Prefecture of Corfu) 102 1,200% 35 Municipality of Paxoi 100 1,176% 36 Craftsmen federation of Corfu 34 0,400% 37 Chamber of Commerce of Lefkada 70 0,824% 38 Municipality of Karya (Prefecture of Lefkada) 100 1,176% 39 Municipality of Ellomenos (Prefecture of Lefkada) 150 1,765% 40 Vassiliky Bay 10 0,118% 41 K.O.G. Meditteranean Marinas Management 170 2,000% 42 Nikodimos S.A. 50 0,588% 43 I. Psomakis I. Karalis Ltd 10 0,118% 44 Municipality of Erissos (Prefecture of Kefalonia) 50 0,588% 45 Chamber of Commerce of Kefalonia and Ithaki 50 0,588% 46 Proper Cefalonian Travel 30 0,353% 47 Prefectural Authority of Zakynthos 100 1,176% 48 Municipality of Laganas (Prefecture of Zakynthos) 100 1,176%

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No Title Shares Percent 49 Chamber of Commerce of Zakynthos 100 1,176% 50 Association of Hoteliers of Zakynthos 50 0,588% 51 Chr. Xenos A.T.E.E. 50 0,588% 52 N. Giakoumelos 50 0,588% 53 Bitzaro Palace (Philoxenia Hotel and Tourism S.A.) 100 1,176% 54 Diana Palace (Margari Hotel and Tourism S.A.) 50 0,588% 55 Seav View Village 20 0,235% 56 Pana Bros Hotel and Tourism S.A. 70 0,824% 57 Astir Pallace Zantotel Hotel and Tourism S.A. 150 1,765% 58 Astir Iris Hotel and Tourism S.A. 150 1,765% 59 Margarita Magdalinou Hotel and Tourism S.A. 10 0,118% 60 Paleothodoros Kougias Hotel and Tourism S.A. 50 0,588% 61 Zante Park Hotel and Tourism S.A. 150 1,765% 62 Galaxy ERGOTEM S.A. 150 1,765% 63 Ionis Hotel and Tourism S.A. 150 1,765% 64 Esiness Chalikiopoulou Stavroula 60 0,706% 65 Apostolos Theocharis 10 0,118% 66 Stamatis Liveris 50 0,588% 67 Manolitsis S.A. 10 0,118% 68 Mylonas Equipment 30 0,353% 69 Association of Tourism Development of Keri 20 0,235% 70 Botonis Anastasios 10 0,118% 71 Vasilios Kostis 10 0,118% 72 Dionisios Kostis 10 0,118% 73 Best Tour Greece Ltd 20 0,235% 74 Dionysios Doxas 20 0,235% Total Shares 8.500 100%

In 12th of December 2015 the shareholders of ETIN S.A. decided the dissolution of the company, its liquidation as well as sending the report of the auditors to judicial authorities due to a series of very serious violations of the company’s charter and laws including, non- audited financial reports, lack of minutes in meetings of the board of directors and the shareholders, unlawful hiring of personnel, tax authority violations, unlocated assets of 77.000 €, unjustified and undocumented expenses, lack of transparency, serious violations in proper management etc. At the time of writing of this dissertation the legal procedures for the dissolution of ETIN S.A. are still in progress while all shareholders have contributed cash for the payment of the pending obligations of the company.

What makes a textbook example of company and management failure part of this chapter is the fact that this company was for years the vehicle of regional policies for tourism promotion and development, it used to be quoted as good-practice example (ITA, 2008) and it was mentioned by many of the interviewees as both a good and bad example of public- private sector collaboration in the tourism sector.

ETIN was established while the institution of elected Prefectural Authorities was still active and the Regional Authorities were a branch of the central government and it continued its operation after the establishment of the elected Regional Authorities replaced them in 2010. During both eras and until the recent Regional Administration was elected and started looking closely at its operation, the core funding of ETIN was coming from the Regional Authorities or the Regional Operation Plan funds. Actually, many representatives of the

Postgraduate Dissertation 73 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region public sector, during the interviews cited the case of ETIN as an example of the reluctance of the private sector to share part of the cost that is necessary for tourism promotion. Although the stakeholders of ETIN participated in and benefited from the projects implemented by the company and funded by the public sector (mostly the Regional Authorities) they never took part in the funding of projects of interest.

During its operation the company was organizing and supporting the presence of the Region of Ionian Islands in tourism exhibitions (the 2007 activity report includes the participation in 16 international and 2 national exhibitions), collaboration with state owned television channels for the promotion of the region, collaboration with tour operators, participation in funded projects etc. (ETIN S.A., 2007).

According to interviewees that participated in this research, ETIN as the first example of intra-prefectural and intra-municipal collaboration in the field of tourism promotion (ITA, 2008) had the following positive features: • All public-sector branches were involved, namely Municipalities, Unions of Municipalities and Communities, Prefectures and the Ionian Islands Regional Development Fund with the Prefectures and the Fund becoming part of the elected Regional Authorities after the “Callicrates” reform of local governance in 2010. • The tourism private sector was fully represented in the stakeholder composition of the company by Chambers of Commerce, Hoteliers Associations, Tourism Agency Association, Tourism Accommodation Associations as well as private tourism enterprises among which some comparatively big infrastructure enterprises (marinas, casino, hotels and tourism agencies and HATTA). • It received adequate funding for its operation mainly from the Regional Authorities at least during the initial period.

The negative features of ETIN according to the interviewees, among others, include: • Lack of managerial control on behalf of the stakeholders. The Regional Authorities as the primary financial contributor exerted control over management of the company. • Lack of transparency which resulted into unjustified expenditure and inefficiencies. • There was no contribution from the private sector for the projects of shared interest that where designed and or implemented by the company.

Despite being an old-time good-practice-example turned into a total failure with its liabilities left to the shareholders the creation of ETIN had a real purpose to serve. For this reason, the history of ETIN has to be re-examined in order to extract the proper conclusions for the future. As the Vice-Governor for Tourism of the Region of Ionian Islands admitted when he openly presented the problems of ETIN to the public and referred to the possibility of dissolution of the company: “we will see whether this company [ETIN] should continue to exist or whether we have to dissolve it and create a flexible instrument in its place that would meet today's requirements. It could even be a non-profit company. It is true though that a flexible instrument is needed.” (CorfuPress, 2014). This kind of regional level public – private joint venture does not exist up to this day although many actors form both the public and the private sector and many of our interviewees agree about its necessity.

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9.1.3 Municipal Tourism Committees The Municipalities can set up their own Municipal Tourism Committee for Tourism Development and Promotion. This instrument of municipal strategy preparation was introduced with the last local governance reform. Article 70 of Law 3852/2010 on the “New Architecture of Local Government and Decentralized Administration – Callicrates Program” states that: 1. The Municipal Council with its internal regulation can set up a committee for the processing and suggestion of topics of its competence. Especially in touristic Municipalities a committee is set up for the processing and suggesting to the Municipal Council topics of touristic development and promotion of the Municipality. 2. The committees are chaired by a member of the Municipal Council appointed by the decision for setting up the committee. These include members of the Municipal Council proposed by all Municipal Council parties, employees of the relevant Municipal administration division, as well as private experts on committee matters and representatives of social entities in the area.

As it is expressly stated in Article 70, the role of the Committee is advisory. It works on and makes proposals to the Municipal council on issues related to the development of tourism and the promotion of the municipality. The decision by the Municipal Council for the set- up of the “Committee for Tourism Development and Promotion of the Municipality of …”, as it is the most common title format used, defines its member composition. The Hellenic Agency for Local Development and Local Government S.A. (E.E.T.A.A.) has prepared a draft regulation for the operation of the Tourism Committee which the Municipalities can adapt and use (EETAA S.A., 2010).

According to that regulation the responsibilities of the Tourism Committee include: a) Designing and planning tourism policy. Planning of tourism development within the framework of the municipality's general policy, shaping and proposing the necessary arrangements and implementation measures. b) Proposing the necessary measures for the orderly and efficient operation of the tourism sector to the municipal council and monitoring its performance in order to brief the municipal council. c) Proposing to the municipal council the guidelines for the study and preparation of tourism infrastructure and development programs for the municipality. d) Proposing the necessary actions and measures needed for attracting private investments to the tourism sector. e) Cooperating with local professional associations in the tourism sector in order to harmonize their policies and co-ordinate their actions aiming at the promotion of tourism development and improving quality and competitiveness of tourism in the municipal area. f) Participating, through its president and other appointed members, in local, national or international tourism exhibitions, in order to represent the municipality and promote the municipal area and local tourism products. g) Designing and proposing to the municipal council promotional programs and general actions concerning tourism promotion and advertising in the country and abroad, in particular by taking part in exhibitions, media advertisements, publication entries as well as in any other appropriate way.

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h) Planning policies that help the improvement of tourism service quality in the municipality and the evaluation of the services provided. Drafting proposals and expressing opinion on regulatory decisions by the municipal council, the processes of controlling and regulating tourism enterprises, the clean and decent appearance of all locations of the municipality related to tourism. Proposing measures to achieve these objectives to the municipal council. With respect to regulatory decisions that responsibility shall be exercised if it does not contradict the responsibilities given by law to other municipal entities, in particular the quality of life committee.

All Municipalities of the Ionian Islands Region have set up their own Municipal Tourism Committee the composition and function of which differs according to the size of the Municipality, the available resources as well as the approaches and views of the Municipal Officials.

Information collected from interviews, legal documents, decisions by the municipal councils21, operation plans for tourism promotion, annual reports and other documentation from all the Municipalities of Ionian Islands Region indicate some common aspects in the operation of the Committees for Tourism Development and Promotion which include: • The preparation of an annual Tourism Promotion Plan for the Municipality which is discussed and approved by the Municipal Council. • The Submission of an annual Report on the execution of the Tourism Promotion Plan which is discussed and approved by the Municipality.

In most municipal tourism-promotion plans the following types of action are included after some background information for the tourism sector in the municipality is provided and the main strategic aims for tourism promotion is defined: • Preparation of printed promotional material. • Advertisement of the Municipality in press and electronic media. • Participation in national and international exhibitions. • Actions for the promotion of local products. • Actions for the promotion of cruise tourism. • Participation in GNTO campaigns and actions. • International collaborations and partnerships. • Participation in conferences. • Participation in funded projects (EU, national, regional etc.).

According to the views expressed by interviewees, the positive features of the municipal tourism committees, among others, are: • The focus is on the municipal area which coincides with a unique destination within the Ionian Islands Region (e.g. Municipality of Corfu, Ithaki, Paxoi etc.). • The private sector can be represented in the committee.

21 Most decisions of the Municipal Councils as well as of other public-sector entities including the Regional Authorities (and especially those that entail costs or legal obligations etc.) are, by the enforcement of law, published on the website diavgeia.gov.gr. Failure to publish a decision renders it invalid and its implementation illegal.

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• The preparation of a plan and the submission of an annual report helps the Committee and the Municipal Council consider, monitor and adapt its strategy for tourism.

Negative features of the municipal tourism committees include: • The attitudes of the municipal authority and/or of the committee members can make the role of the committee “purely decorative”. Over-control and micro-politics are usually blamed for the lack of substantial contribution on behalf of the committee. • The focus is more on tourism promotion and less on tourism development. • The budgetary provisions are limited.

9.2 Regional-level interactions

As we saw in 9.1.2 the failure of ETIN S.A. has essentially deprived the tourism industry of the Ionian Islands Region of a very important vehicle for public-private sector collaboration and coordination. The consultation processes followed by the regional authorities for devising the regional strategic plan and the regional operating plan in tourism promotion are not sufficient for a satisfactory involvement of other public entities and mostly of the private sector. The regional officials have admitted that the dissolution of ETIN leaves a gap that a flexible non-profit entity could fill (see sub-section 9.1.2). In what follows we briefly present some examples / cases of collaboration and intervention that set the seeds for a more fruitful interaction at the regional level of the actors involved in tourism strategy.

9.2.1 Regional Authorities: private sector partnerships The Region of the Ionian Islands has established partnership with SETE and Marketing Greece S.A. for the implementation of the regional tourism promotion plan (PIN, 2017).

Marketing Greece S.A. is a non-profit company that was established in 2013 with the primary goal of promoting the Greek Tourism product. In the context of the National Strategy for Tourism the company aims at supporting the Ministry of Tourism and GNTO in creating a new tourism identity for Greece. The main stakeholder of Marketing Greece S.A. is SETE with 80,43%, the Hellenic Chamber of Hotels with 16,60% and the Hellenic Association of Communication Agencies (EDEE/HACA) with 1,97%22.

The Regional Office of SETE supports the Region of Ionian Islands by acting as an advisor for Regional Authorities, the Local Authorities and by supporting the local enterprises and the tourism community. It is also a channel of information on the international status of tourism marketing and the improvement of the tourism product (SETE, 2015)

22 Source: http://www.marketinggreece.com/

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9.2.2 Regional Union of Municipalities of Ionian Islands The Regional Union of Municipalities of Ionian Islands (PEDIN) is collaborating with its member- Municipalities in many projects directly or indirectly related to tourism. The participation in certain national and international tourism exhibitions is co- funded and co-organized by PEDIN and the Municipalities while PEDIN has an important role in supporting the small-island Municipalities. PEDIN has also co-funded and co-organized tourism related events as well as the participation to exhibitions with the Region of Ionian Islands.

Given its regional nature as an organization, the spread of its offices and personnel in all four Regional Units, the experience of successful collaboration with both Regional and Municipal Authorities, PEDIN can play a key role in the collaboration of the Region of Ionian Islands with the Municipalities of the Ionian Islands in the field of Figure 5 Poster of the forthcoming 5th tourism promotion and development. annual Festival of Gastronomy in Lefkada. The Festival is co-funded and co-organized One of the projects implemented by PEDIN in by public and private sector entities. collaboration with the Municipalities is the Annual Lefkada Gastronomy Festival which in July 2018 will be in its 5th year (see Figure 5). The festival is a good example of public-private sector collaboration in alternative-tourism promotion as many local enterprises from the restaurant and local products’ sector participate each year and it attracts a great number of Greek and international visitors.

9.2.3 Central Union of Municipalities The Central Union of Municipalities (KEDE) is the representing body of the Municipalities at the national level. For the support of its board of directors and its activities it has established thematic committees with strategic and advisory role, one of which is the Tourism Development Committee.

The Tourism Development Committee of KEDE has been working on the preparation of an Action Plan for Tourism Development (Damoulakis, 2015). The Committee has put forward a set of targets for tourism promotion and has made proposals for the means and actions required to achieve those aims which include (Damoulakis, 2015): • Staffing of tourism information and services offices in every Municipality on a yearly basis. • Creation of networks aiming at promoting alternative forms of tourism through the common features of the Municipalities. • Creating special a website for the promotion of tourism and the provision of information for every Municipality. • Transfer of authority over / ownership of beaches to the Municipalities.

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• Priority on high quality tourism infrastructure investment projects. “Fast-track” procedures for large scale investments. Reduction of red-tape for all investments.

Although the Action Plan on Tourism has not been presented yet it seems that KEDE has adopted a very solid, clear and methodically pursued strategic aim for tourism. That aim is the promotion of Medical Tourism. A possible explanation for the selection of this strategic aim could be that the President of the Board of Directors of KEDE, Mr. George Patoulis, Mayor of Maroussi, is a Medical Doctor and also the President of the Board of Directors of the Medical Association of Athens.

In recent years KEDE has been very pro-active in promoting Health and Medical Tourism as an important strategic aim for Greece and an area in which the country should excel at the international market. On the 26th and 27th of May 2017 KEDE organized in Ithaca the International Conference on “Health Tourism: force for the development of the national economy and for the emergence of Greece as a top destination throughout the year” (see Figure 6). The Conference was organized in collaboration with the Municipality of Ithaki and the Medical Association of Athens and it was under the auspices of the Presidency of the Greek Republic (KEDE, 2017). The 2nd International Conference on Health Figure 6 The poster of the Tourism with the central topic “Health Tourism and International Conference on Health Development” will be held in Cos on 23-24 June 2018 Tourism organized by KEDE in (KEDE, 2018). KEDE and its President insist that a Ithaki on 26-27 May 2017. national strategy for the development of health tourism is required (The National Herald, 2018).

9.3 Strategic management perceptions and practices

9.3.1 Public sector One of the strongest accusations in the political discourse in Greece is that the opponent does not have a strategy or a plan. Despite the apparent importance given to strategic planning by using this statement as an accusation, it was after the enforcement of law 3852/2010 (Callicrates Program) that strategic management was formalized and enforced in Regional and Local Administration. Of course, strategic management in the public sector was not introduced by this law. The law of Callicrates enforced that projects cannot get funded and implemented unless the strategic and operational plans have the appropriate provisions for them and they are part of the Regional / Municipal Annual Operational Planning. In subsequent national and EU funded projects one of the most fundamental requirements for the funding of projects is that they are within the provisions of the strategic plan of the public-sector entity involved. This helped enormously not only in adopting

Postgraduate Dissertation 79 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region formal strategic management and planning as described in the law but also made elected officials and staff members familiar with the process and receptive of its necessity.

As we saw in Chapter 6 (subsections 6.1.2 and 6.2.2), for the strategic planning of both regional and local authorities monitoring and evaluation is part of the formal process described by law, while the appropriate monitoring and evaluation indicators and methodology are included in the initial documents that have to be submitted and approved. Despite the existence of this formal monitoring and evaluation process evidence from our interviews indicated that this part of the strategic process needs to be further improved. This weakness in the strategic cycle has reportedly also affected the strategies on tourism. According to the views of the public-sector representatives and the criticism of private- sector representatives about the lack of monitoring and follow-up by the public-sector administration the key issues involved are: • Structure: while a strategic process has been adopted and made an integral part of the functioning of Regional and Local Authorities the internal structure and hierarchy have not been adapted accordingly. As a result, a large part of the internal administration is not involved and concerned about the implementation, monitoring and evaluation of the strategic plan. The strategic plan per se is regarded as a top- level process and it is not broken down to operational plans and targets for the whole organization. • Politics: the monitoring and evaluation of the strategic plan is a politically sensitive issue. Delays, failures, even the need for adjustments and revision become first page headlines in press and electronic media and topic for heated confrontations in board meetings before any formal managerial mechanism manages to react. Elected members and politics leave narrow breathing space for staff members and formal procedures to operate efficiently and effectively. • Personnel: staff members of the regional and local administration have not been adequately trained and guided for the adoption of formal strategic management procedures. The whole public sector lacks even the most basic thing which would be a job description and a list of duties for each member of staff. This, together with the remains of old-time clientele-attitudes and politically oriented paternalism on behalf of the elected officials and the reflex resistance to hierarchical control on behalf of staff members makes any hint on internal monitoring and evaluation processes a casus belli.

9.3.2 Private sector Strategic management approaches and attitudes in the tourism industry and the private sector in general varies substantially depending on whether individual enterprises or professional and employers’ associations are examined and also varies depending on whether large or small enterprises and national-level or local associations are taken into account.

9.3.2.1 Individual enterprises The vast majority of tourism enterprises are small in size in terms of annual turnover and number of employees. They are mostly family-operated and they are not always the only or the primary source of income. The non-primary hotel accommodation enterprises fall mostly within this category. The majority of the small enterprises has limited access and ability to process the information needed in order to adapt to the rapid changes of the tourism market

Postgraduate Dissertation 80 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region and thus adopt an appropriate strategy. For many the need to cope with loan installments, tax obligations and the running cost of their business makes them succumb to the demands of tour operators, local tourism agents and electronic platforms for low-priced offers while there is little or no space to consider upgrading their services (e.g. renovations, turning to boutique hotel approaches, targeting alternative groups of visitors etc.). In short, this category of enterprises cannot respond to the ever-growing demand for quality and their reflexive strategy is that of cost-minimization and survival.

Of course, this is not a universal approach for all small enterprises. A small percentage of them that is slowly but steadily growing (our interviewees provided estimates ranging from 10 – 20% of small enterprises) is adopting a quality centered strategy. The high per capita GDP in the Ionian Islands, the entrance of young educated entrepreneurs in the field, the competition pressure and the opportunities provided by electronic platforms for travel and tourism as well as the easy access to information via the internet has enabled the entrance of new enterprises and the strategic shift of older ones into what is code named “quality tourism services”. Over the past few years the number of boutique hotels, villas or luxury accommodation targeting high-income visitors has increased. Other sectors like restaurants, recreation and activities industry, alternative tourism services etc. follow closely. All our interviewees agree that the capacity of the Ionian Islands in this direction is far for being reached. Corfu and Zakyntos, “being victims of their success” as it was put by one interviewee, have focused on quantity and neglected quality which would be their only option for increasing income in an otherwise already congested tourism market. Kefalonia, Lefkada and the small islands (Ithaki, Paxoi and Meganisi) still have unexploited capacity and potential for new quality infrastructure and services. The quality centered strategy of this category of enterprises acts as a driving force (either by example or by competition) for the majority of the small enterprises.

The majority of large-size enterprises are owned and managed by experienced entrepreneurs with good access to information sources and good understanding of the local and international market. Many of them have established ties and support the efforts of Regional and Municipal Authorities and quite often act as informal advisors and influence the approaches of both public sector and private-sector-associations representatives. They have clear and solid strategic view for their enterprise as well as the regional/local tourism industry. As a result, they are able to employ a mixture of strategies including quality service provision, product adaptation / differentiation as well as price adjustments in order to exploit the full length of the tourism period, all available booking channels and the whole range of visitors that is appropriate for their enterprise. With respect to regional/local strategies many of them manage to be immune to the micro-politics problems affecting the relations and obscuring the view of public sector and professional association representatives.

9.3.2.2 Professional / employer’s associations In Chapter 7 we briefly referred to the Greek Tourism Confederation (SETE) which managed, starting as an initiative of a few top-level businessmen to become the main national employers’ association for the tourism sector (Kathimerini, 2018) and the de facto strategic leader of – at least – the private sector in tourism with its influence on public sector strategies being more than visible. SETE has fully exploited the scientific support of INSETE in order to study Greek tourism and the international market status and design appropriate strategies. It co-operates with the public sector (central government, regional,

Postgraduate Dissertation 81 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region local level) and uses Marketing Greece S.A. and discovergreece.com as tools for implementing parts of its strategic aims. The initiatives and actions of SETE receive ample funding from EU, central government and regional authorities. SETE has managed to tactically and strategically surpass and engulf the pre-existing efforts of the Hellenic Chamber of Hotels and rightfully become the undeniable leader of the Greek tourism private sector. The mission statement of SETE for “continuous enhancement of competitiveness and highlighting of the leading role of tourism in the Greek economy” is well documented and analyzed in its numerous position statements and proposals23 and the prolific work of INSETE24.

The local professional and/or employers’ associations, with the partial exemption of the Chambers of Commerce, usually lack the necessary funds and personnel to efficiently and effectively achieve the aims stated in their charter. Thus, they cannot afford the methodologies, approaches and resources available to regional and local authorities or SETE for designing, implementing, monitoring and evaluating respective strategies. Nevertheless, local professional associations have the benefit of representing and being in direct contact with the enterprises that consist the core of the tourism sector. They focus on the real everyday problems of tourism-sector enterprises as well as the conditions of the local market and the features of the destination. This direct contact with the enterprises and the local scope is an advantage as it makes them “real-time sensors” of the local tourism industry. It is – at the same time – a disadvantage as this everyday-life-concern and the local scope deprives them from the ability to have the whole picture and think globally and strategically. The strategic process in local professional associations is mainly centered around the operation of the board of directors and has at its core the immediate problems related with the needs of the enterprises, the local market and the requirements of the destination. This focus is usually shifted to a more spherical and global perspective through the guidance and collaboration of the national professional associations (SETE, HCH, SETKE etc.) and the interaction with regional and local authorities.

9.4 Harmony and conflict

If a brief description of the interaction of the actors of tourism in both the public and the private sector was required that would be “harmony and conflict” as both conditions are observed without always being mutually exclusive. There is a status quo that is based on the institutional roles of the actors, the legal framework, the state of the tourism market, the social and economic factors involved, the politics and micro-politics at the regional and local level. Those factors affect the dynamics of the tourism actors’ network and the dynamics show both spatial and temporal sensitivities.

Within this network of actors, the first look shows that harmonic collaborations have been developed. The Regional Authorities collaborate with PEDIN and the Municipalities for organizing the presence of the Ionian Islands in exhibitions. The public sector collaborates with enterprises for hosting familiarization trips for journalists, bloggers, tourist agents etc. The Chambers of Commerce and the Federations collaborate with the associations of their area. The Regional Unities fund or co-fund projects and events organized by the respective

23 http://sete.gr/el/stratigiki-gia-ton-tourismo/theseis-sete/ 24 Statistical data, reports and studies available on line at http://www.insete.gr/.

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Municipalities or local associations. News reports and even many of our interviews paint the image of a harmonic collaboration of the actors of the local tourism industry. This image is in certain cases accurate as the actors involved have well defined strategies and clear-cut boundaries in the definition of their roles.

Every now and then the regional and local media are full of reports about conflicts and disagreements among the actors of tourism. Listing one-by-one the individual cases of such clashes and conflicts wouldn’t be productive and useful. What is interesting is the relevance of those conflicts with the general strategies and the institutional positions of the actors involved. There are two types of such clashes that are of particular interest: Regional – Municipal and public-private sector.

A common type of conflict is that between the Regional and Municipal Authorities. We have seen earlier the issue of branding and how Regional Authorities support a regional branding (Ionian Islands) while the Municipalities are in favor of a set of well-established local brands (Corfu, Ithaca, Zante etc.). The issue of branding could be a legitimate difference of opinions due to differences in scope and authority but it usually re-surfaces as part of a larger and more heated topic concerning the availability and allocation of funds for the tourism promotion of the region. The Regional Authorities have direct access and control over the allocation of funds from ROP Ionian Islands and as a result their operation plan for tourism promotion has better chances than the, mostly, self-funded operational plans of the Municipalities. As a result, there is a well-funded regional promotion-plan over which the Municipalities have no real control and many municipal promotion-plans which have limited yet not negligible resources and usually overlap in many respects with the regional plan. This situation creates inefficiencies and significant waste of funds and resources. Despite the fact that many public-sector officials understand this situation and the problems it creates a visible and viable solution has yet to be found. The traumatic experience of ETIN makes many of them look away from a similar collaboration scheme.

Another type of clash usually encountered in local media reports is that between public and private sector representatives. In local discourse and also in the interviews this clash manifests itself as a mutual blame game. Public officials blame private sector representatives for having political or rather micro-political motives behind their public statements and polemic against them while they also accuse part of the private sector as pursuing the easy profit with no regard to quality. On the other hand, private sector representatives and individuals blame the officials for “not caring enough” or “not doing enough” for the problems of the tourism sector and that they waste funds and time in traveling for conferences and exhibitions. There is no clear-cut right or wrong in both those views and there is definitely some degree of truth as well as some degree of misunderstanding or indeed micropolitical ulterior motive. From the point of view of strategic interaction between the two sectors there seems to be a need for better channels for their communication and collaboration which cannot be based on existing tools and institutions (e.g. Municipal Tourism Committees). The micro-political ulterior motives will not be possible to get entirely eliminated and the only remedy to this would be the creation of institutionally shielded channels of communication in which every actor shares well- defined responsibilities and obligations.

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9.5 Lessons for the future

The interaction of public and private sector in the tourism industry is absolutely necessary as the final product and the destination as whole is shaped by the actions and success or even the omissions of both. The past and the present of public-private sector interaction in the tourism industry of the Ionian Islands Region provides useful and interesting lessons for the future. For a proactive approach in shaping the future framework of this interaction and devising a modern and effective regional strategy for tourism those lessons must be taken into account.

From the information provided in this Chapter as well as in Chapters 5 and 7 we try to reconstruct and codify those lessons as follows: • An institutional form of public-private sector collaboration in the strategic management of tourism is required in both the regional and the local (municipal) level. • The past examples of NETPs and ETIN can provide a set of good and bad practices on which the design of such regional/local institutional forms should be based. The creation of entities is not enough, close monitoring and strict management are essential to avoid failures such as in ETIN. • Fair sharing of obligations, costs and responsibilities together with inclusion of all actors and entities involved can guarantee a viable basis for collaboration of the public and private sector. • Every sector and entity should focus on its own area and responsibility and what it can do more efficiently and effectively. Collaboration and sharing of resources should aim at achieving economies of scale and effective strategic management at all levels (regional, local, sectoral etc.). • The internal competition (among destinations within the region, among enterprises within each subsector) is natural and desirable and should be exploited in a productive manner in order to boost quality and eliminate minority cases that act illegitimately and act in a defamatory way for the destination and or the sectors involved. • The SETE paradigm, philosophy and tools utilized (research, statistics, marketing, collaborations, partnerships etc.) need to be exploited, adopted and adapted for the organization of institutional forms of collaboration and shaping the strategy of the regional actors in the tourism industry. • Dissemination of information, education, training and focus on quality are key elements of successful strategies in tourism.

Those lessons, the precipitated information and experience available together with the human capital and resources of the regional tourism industry are the necessary elements for the synthesis of a modern regional strategy for tourism together with the structures and resources necessary for its implementation, monitoring and evaluation. The design principles for effective and efficient institutional forms of interaction of the public and private sector actors of the tourism industry can be deduced from the lessons and experience of past and present experiences and practices.

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10. Conclusions

10.1 Summary

The purpose of this work was to investigate how the public and the private sector act and interact with each other in the tourism industry of the Ionian Islands Region. For this purpose, we used information available in documents (minutes, decisions, laws, reports, news etc.) and also interviewed people involved in tourism in both the public and private sector. Our focus was on the strategic management process in each sector, the environment and conditions in which it evolves and how it is affected by intra- and inter-sector interactions. Finally, the identification of the strategies adopted for tourism and the examination of a possible need for changing the current status of public – private sector collaboration in the tourism industry of Ionian Islands was pursued.

Strategic planning in the public sector has in recent years been enforced by legislature provisions. Formal procedures are followed that include preparation and consultation on the strategic plan and preparation of operational plan, action and financial plan with monitoring and evaluation indicators. This process is followed by regional and municipal authorities and is updated by yearly action/operation plans. In the field of tourism special operation plans are prepared with the main focus being on tourism promotion as tourism development is treated in the framework of the general planning. In the private sector systematic and consistent work on strategic planning is conducted by SETE and HCH while the local professional associations are focusing on micro-management of the everyday problems of the respective sectors while participating in the strategic collaborations guided by the sector leaders and the public sector. Individual enterprises have either limited ability for strategic placements other than survival and price competition due to size or are able to employ quality centered strategies and constructively interact with the public sector and the professional associations.

The framework in which all the actors involved interact is shaped by the legislature and central government policies as well as by the competition and requirements of the modern tourism market. The legal framework and the government policies often pose serious barriers in the operation and the co-operation of the public and the private sector (public procurement law, taxation, unstable environment, underfunding etc.).

Despite the differences and divergence in operational and organizational issues it seems that a consensus is being shaped with respect to the core strategy in tourism in both the public and the private sector. At the top level both sectors agree that quality is the most important determinant of the tourism product and to this aim a systemic effort on infrastructure, exploiting culture and improving competitiveness of the sector and the destinations should be put.

The success of the tourism industry depends on the actions of both the public and the private sector and their efficiency and effectiveness depends on their interaction. In this direction existing channels of inter- and intra-sector collaboration and communication should be fully exploited and where needed new ones to be created by using past experiences. For the

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Region of Ionian Islands there seems to be a need for a Regional level vehicle for the collaboration of the public and private sector in tourism promotion and development while the case and scope of the Municipal committees need to be re-evaluated as the needs of each destination should also be addressed at the local level.

10.2 Discussion and evaluation

In this work we attempted a first spherical look at the strategic management issues involved in the public and the private sector of the tourist industry using the Ionian Islands Region as a case study. Although such a general perspective was useful and instructive as a first approach it seems that the breadth and complexity of the problem needs investigation in further studies that would narrow the scope. The two sectors deserve a more detailed investigation into the mechanics of their strategic process with respect to tourism. Within each sector a multilevel approach is also needed as we have located such level-dependent differentiations. It should be kept in mind that tourism as a concept defies boundaries and this is also true for “strategic management in tourism” in either the public or the private sector. It is hard to define the set of strategies and actions that affect tourism as probably any strategy and action affects tourism in a regional economy that is so much dependent on it.

Within its present focus and scope this work could be much improved if it was repeated with substantially more available resources. The need for this is more obvious in the private sector where there is not a full coverage of the tourism subsectors and especially in individual enterprises where more representative groups should be included and interviewed. Perhaps, semi-quantitative and quantitative approaches could also be employed. In the public sector the inclusion of more staff members would clarify the internal structures, processes and issues that affect the strategic processes.

10.3 Proposals – practical implications

Apart from its theoretical interest, this work has practical interest and implications for the public and private sectors involved in the strategic management of tourism in the Ionian Islands Region. The practical interest and implications manifest themselves in two levels: • Informational. the scope and content of this work is practically useful for the individuals involved in tourism in both sectors as it provides the informational background for understanding the strategic processes and interactions involved. Understanding such processes and interactions could help bridging the gaps in the collaboration of the two sectors and improve its effectiveness and efficiency. During the course of this research only a few interviewees had a full understanding of both sectors and how they operate with respect to tourism. • Strategic. The need for improvements in public-private sector collaboration in the field of tourism in both the Regional and Municipal level has been highlighted in this work together with past and present experiences and practices. This work could serve as a starting point in designing formalized institutional forms of collaboration in regional and municipal level.

Postgraduate Dissertation 86 George P. Kremmydas, Public - private sector actions and interaction in the Greek tourism industry: The case of the Ionian Islands Region

Our aim is to continue and extend this work in the form of internal reports for PEDIN that would be used for initiatives for the informational as well as strategic support of the Municipalities.

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Author’s Statement: I hereby declare that, in accordance with article 8 of Law 1599/1986 and article 2.4.6 par. 3 of Law 1256/1982, this thesis/dissertation is solely a product of personal work and does not infringe any intellectual property rights of third parties and is not the product of a partial or total plagiarism, and the sources used are strictly limited to the bibliographic references.

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