Greece May See 15% Drop in Tourism Income

Greece’s tourism revenues may plunge up to 15 percent this year, as travellers spooked by anti-austerity demonstrations and public unrest in the country opt for alternative holiday destinations. Tourism is the lifeblood of the Greek economy, making up almost 20 percent of the country’s economic output – the single largest component of Greece’s GDP.

Greece’s tourism revenues may plunge up to 15 percent this year, as travellers spooked by anti-austerity demonstrations and public unrest in the country opt for alternative holiday destinations. Tourism is the lifeblood of the Greek economy, making up almost 20 percent of the country’s economic output – the single largest component of Greece’s GDP.

With an estimated one in five Greeks working in the tourism industry, the sharp decline in tourism numbers makes for grim reading. Industry experts say a 10 percent drop in GDP would equate to almost 100,000 job losses, many of whom are already bracing for the worse.

According to a Reuters report, Andreas Andreadis, a Greek tourism official, said speculation about a Greek euro exit following an inconclusive election last month, as well as fears that social unrest could break out, have scared many tourists off.

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In an attempt to lure the summer crowds, Greek hoteliers and travel agents have resorted to slashing prices for last-minute bookings – a sharp contrast from the previous year when Greece saw its tourism revenues increase by almost 10 percent.

Last year, Greece was the holiday destination of choice for a record 16.5 million visitors, as travellers avoided the political turmoil and social unrest in rival holiday destinations such as Egypt, Tunisia and Morocco. In 2011, Greek tourism revenue jumped 10 percent to 10.5 billion euros.

With its own political and economic crisis, Andreadis concedes that it would not be possible to achieve the same income as last year.

Tourism income is already down 15 percent for the first quarter to 396 million euros. British visitors are down by an estimated 20 percent year-on-year and the Germans by more than 40 percent. Last month, the Guardian reported that “in the 10 days after the inconclusive elections on May 6, an extraordinary 50,000 travel bookings were cancelled – half of those usually made every day at this time of the year.”

[quote] In particular, German visitors are staying away as Greek hostility towards Germany, and Germany’s tough-love approach towards Greece’s debt and austerity programme, intensifies. [/quote]

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The German foreign office has advised tourists to check on the current situation before any holiday and to avoid “demonstrations and large gatherings”.

Adding to the pressure, the Guardian reported that German tour operators such as TUI have demanded that Greek resorts not only cut the price of holidays by up to 35 percent but have insisted they also add “drachma clauses” to cover themselves should the euro be scrapped and replaced by a seriously devalued drachma.

However, Peter Voigt, a professor for tourism at the Munich University of Applied Sciences, argues that a return to the drachma could allow tour operators to benefit from declining costs due to the likely sharp depreciation of the drachma against the euro.

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