A month or so ago, Ekaterina Rybolovleva, the 27 year-old daughter of Russian magnate Dmitry Rybolovlev, announced she will begin developing a 10,000 square meter resort on the Island of Skorpios.
She had purchased the business group that has a long-term lease to the 300,000 square meter (74 acres for Americans) island from Athina Roussel, the grand daughter of the famous Greek ship-owner Aristotle Onassis.
The island belonged to the Onassis Foundation established by the eponymous ship owner. The young Ms. Rybolovleva plans to develop a luxury resort on Skorpios for a total investment estimated at €184 million.
She guarantees that she will maintain and, in fact, enhance the island’s status as a nature resort and keep the project within the 5% of its area permitted for development. She had obtained, at no small cost in time and lawyers, all the necessary permits from the maze of Greek government agencies that could and often do block even the simplest of investments.
The reaction to the announcement was, unfortunately, predictable. You might have thought that a Turk had just bought Chios! Protests filled social media and dominated conversations in the best salons in Greece and the Diaspora.
A Parliamentary Deputy of the New Democracy, the political party supposedly devoted to investment, moved to block the project on the grounds that the act of selling the holding company had transferred ownership of the Island from the Onassis Foundation to the Greek State.
Social media churned with concerns that the development would disturb the bucolic and primitive (relative to other Ionian islands) conditions of Lefkada, the larger Island and administrative group to which Skorpios belongs.
One posting complained that having purchased a property for a summer home on the Island for its “so beautiful and unspoiled” wilderness she opposed any development. The underlying mindset: we outsiders love living on a poor and undeveloped island and want to keep it that way. The postings ignored the 25,000 inhabitants of the island who might not be as keen on staying poor and undeveloped.
The Island of Lefkada, one of the loveliest in Greece, with thick forests and great beaches, attracts tens of thousands of tourists every summer. Unfortunately, the overwhelming majority of those tourists arrive in July and August.
The majority are travellers living on the cheap. The island is linked to the mainland Greece by a bridge and attracts a class of visitors who do not want to spend on airfare and try to avoid spending on anything else. The island boasts no more than three real 3-star hotels.
The establishment of a marina fifteen years ago represents the only significant upgrade to the island’s tourism infrastructure, bringing a limited number of higher spenders to the island. However, since most live on their boats they have not created a market or upscale hospitality.
The town of Nidri opposite Skorpios, while boasting some of the most beautiful scenery in the world, is a strip mall catering to the cheapest class of tourists and boasting some of the tawdriest hospitality facilities on the Island.
The development of Skorpios into something like Costa Navarino in Peloponesos should give a big bump to quality tourism simply by attracting a better class of visitor. The Skorpios development will create a market for quality services heretofore lacking. Such luxury establishments are designed to operate well beyond the normal tourist season and will have a similar effect on the region, perhaps extending it by several months.
Most importantly, numerous studies have shown that the establishment of a luxury tourist facility creates a “halo” affect, attracting higher class tourism to the entire region. Better hotels beget more better hotels.
We tend to think of tourism only in cash terms, but enhancing high quality tourism has several positive knock-on effects besides income. If tourism seasons expand, more young people stay at home rather than migrate to the big city or abroad.
Young people are dynamic and entrepreneurial and find more things to do in the off seasons. High-class tourists demand better infrastructure such as Internet connectivity and better power, water, and roads.
Local agriculture grows to provide for the tourist market. Studies have shown, for example, that desolate islands off Scotland have retained young people initially because of tourism but who then have developed traditional local businesses such as whiskey into world-class brands.
Government should encourage such investment and not revert to the Greek norm of stopping projects so that the previous politicians get no credit. If the ND deputy has a legitimate beef about ownership of property, it is with the Onassis family and not with the developer; he should let the project proceed. That he has tried to stop it indicates that he has a political motive: undermining a legacy of the previous Greek Government.
It is time that Greeks, and especially Greek politicians, recognize that tourism is not only a short-term cash cow but also a tool for development.