The Centre of Planning and Economic Research (KEPE) refuted several Greek Tourism related myths  such as the sector’s supposedly reduced contribution to employment, the universally impoverished wages in the industry and the export of income through the employment of foreigners workers, in a relative study. The principal myths that KEPE “buries” in its study are the following:

Myth 1: Tourist companies do not incorporate the increase in revenues in their employees wages 

KEPE: According to data from the Social Security during 2014, the total earnings of employees in the sector amounted to 3.8 bn. euro, increased by almost 500 million. compared with 2013.

Myth 2: Fees in tourism industry are minimal at around 500 euros per month

KEPE: According to Greece’s main Social Security Foundation (IKA) the average wage in accommodation exceeded 1,000 euros

Myth 3: Undeclared labor is so extensive that it undermines social security contributions

KEPE: The total contribution of the sector to IKA increased by 200 mil. euros to 1.6 billion. euros accounting for 16% of the total revenue of the main Social Security Foundation in the country.

Mythos 4th: The hotels mainly employ foreigners causing a revenue drain on the national economy

KEPE: The lion’s share of the accommodation generated income remains in the country. In 2014, nonresident employees accounted, on average, for 16.1% of seasonal staff and only 3.9% of the permanent staff of the country’s travel industry. Therefore, the rate of leakage abroad of incoming income (foreign tourists) due to salary costs to non-residents amounted to just 0.6% of the total incoming revenue.

Tourism halted recession

According to KEPE, the recession in the Greek economy will be much more subdued in 2015 and will be restricted to -0.3% compared to a -2.3% forecast in the government draft budget and -4% that numerous international organizations expected after the imposition of capital controls.

KEPE’s estimate is that the economy avoided shrinking dramatically, during the current year, thanks to the tourism industry.

Tax absorption and unemployment

Yet, the study expects that it will be difficult for the tourism industry to absorb the tax hikes imposed during 2015, and employment in highly touristic areas will be affected.

In regions where employment dependecy on tourism is greatest such as the South Aegean (65%), the Ionian Islands (55%) and Crete (45%), tax, regulatory, investment and other policies related to tourism and particularly influence tourist accommodation, are expected to significantly increase unemployment, compared with the rest of the country.

In essence, the government’s official economic advisory institution admits openly that the increase in VAT in the islands and the total travel package will cause unemployment in tourist areas. Furthermore, the imposition of the Special Consumption Tax on Greek and imported wine, is also expected to hurt the tourism industry.

 KEPE profile

The Centre of Planning and Economic Research (KEPE) is the largest economics research institute in Greece. It focuses on applied research projects regarding the Greek economy, and provides technical advice to the Greek government and the country’s regional authorities on economic and social policy issues.

It is governed by a board of directors appointed by the Minister for Development and Competitiveness; and the research staff concentrates on four areas of empirical research: (a) Macroeconomic analysis and projections, (b) Fiscal and monetary policy, (c) Human resources and social policies, and (d ) Sectoral analyses and policies.

Research output

The Centre’s research output consists primarily of its publications. These are currently organised under the following series:

• Studies, i.e., monographs which investigate specific economic issues through the application of modern analytical methods.
• Reports, i.e., works which analyse in a systematic manner sectoral, regional, or national economic issues.
• Discussion Papers, i.e., papers on ongoing research projects.
• Research collaborations, i.e, research projects prepared in cooperation with other research institutes.
• Both a monthly and a four-monthly review, entitled Greek Economy and Greek Economic Outlook, respectively.

Apart from the above publications, KEPE has been very active in the production of unpublished studies, reports and position papers assigned by ministries or other bodies, aimed at supporting economic policy decisions.

KEPE runs a specialised research library, with a rich collection of Greek and international books and journals in economics and social sciences at large. In addition, KEPE is in contact with similar foreign institutions, and exchanges publications, views and information on current economic developments and research methods.

Source: http://www.tornosnews.gr/en/