In good years, tourism contributes more than 20 percent to Greek economic output.
(Photo: IMAGO/NurPhoto)
Athens Whether Mykonos or Santorini, Paros or Kos: In the Greek tourism hotspots you have to search a long time to find a free bed. “We are fully booked until September,” reports Andreas Papadopoulos, who runs a small three-star hotel on Paros.
Holidays in Greece are in greater demand than ever this summer. Hellas is leaving the tourism slump of the Corona years 2020 and 2021 behind. Market observers expect a new travel record for 2022.
Not only do hoteliers, tavern owners, souvenir dealers and car rental companies benefit from this, but the Greek economy as a whole. In good years like this, tourism contributes more than 20 percent to gross domestic product (GDP). Rating agencies and international banks are therefore now raising their growth forecasts for Greece.
Thanks to the influx of holidaymakers, the Greeks should be spared a recession of the kind that could threaten other EU countries because of the war in Ukraine and the energy crisis.
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In July, 5.13 million passengers were counted at the 14 most important Greek regional airports, which have been managed by the German airport operator Fraport since 2017. That was 14 percent more than in the previous record year 2019. In the first seven months of the year, the traffic figures were 4.2 percent above the level of the pre-crisis year 2019.
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At that time, 31.3 million foreign guests came to Greece. Another 2.6 million visited the country as cruise ship passengers. Market observers expect the number of visitors to increase by five percent this year compared to 2019. Germany remains the largest market for the Greek tourism industry. But America is becoming increasingly important.
For 2022
20
billion euro
Andreas Andreadis, CEO of the Sani / Ikos hotel group and former President of the Greek Tourist Board SETE, expects income from tourism.
Data for June and July shows a 50 percent increase in US visitors compared to 2019 – a result of improved flight schedules: The three major American airlines Delta, American and United are offering nine non-stop flights a day from US cities to Athens this summer , more than ever.
The guests from the USA are welcome in Greece because they are particularly generous. Not counting flight and hotel costs, they spend 1,010 euros per capita, compared to an average of 627 euros for other foreign visitors.
Strong growth through tourism
According to calculations by the Greek Central Bank, tourism revenues amounted to 18.2 billion euros in 2019. Andreas Andreadis, CEO of the Sani/Ikos hotel group and former president of the Hellenic Tourist Board SETE, expects it to rise to 20 billion this year.
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The tourism boom will give the Greek economy a strong growth spurt this year. As early as 2021, Greece recorded one of the highest growth rates in the EU with a GDP increase of 8.3 percent. Only in Malta, Ireland and Croatia did economic output increase even more.
For 2022, the EU Commission predicts Greece in its latest forecast an increase of four percent. Other analysts are far more optimistic. The major Swiss bank UBS has now raised its growth forecast for Greece from four to 5.7 percent. The rating agency Moody’s also puts an increase of 5.7 percent in its base scenario for Greece.
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The agency expects stronger growth in the EU only for Malta and Ireland. Other analyst estimates are in the order of six percent. Greece is likely to stay on the growth path in 2023 as well. The EU Commission expects an increase of 2.4 percent for the coming year, the rating agency Scope puts it at 2.5 percent.
Greece has a long way to go
Greece needs sustained growth if it is to pay off its mountain of debt. In the Corona year 2020, the sovereign debt crisis reached a new record at 206.3 percent of GDP.
According to calculations by the Greek Ministry of Finance, the rate will fall to 180.2 percent this year and in 2025 it will drop to a 15-year low of 146.5 percent.
In addition to economic growth, inflation also helps to reduce debt, because inflation reduces the real value of debt. In addition, in the past two years Greece has already prematurely repaid aid loans from the International Monetary Fund from the years of the debt crisis.
>> Read here: How long will the rescue package last for Greece?
However, the country still has a long way to go. This is shown by the latest projections by the EU Commission on debt sustainability. According to this, the debt ratio will not fall below 100 percent of GDP until 2040 at the earliest. The country will only meet the requirement of the EU Stability Pact, which provides for a maximum quota of 60 percent, after 2050.
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