TravelMole Guest Comment: Euromonitor analyses Greek crisis

Tourism in Greece fell in 2010 after three people died during a general strike on May 5, when the country was forced to seek €110 billion bailout from the EU and the IMF in May 2010.

With a fresh round of protests, Paz Casal, Travel and Tourism Industry Analyst at Euromonitor International investigates the impact of further social unrest on Greece’s travel and tourism industry.

Economic strife continues
According to the European Commission, the Greek economy is expected to shrink 3.5% in 2011, after a 4.5% contraction in 2010. However, despite two years of decline in tourism revenues as well as recession, international tourism demand is expected to increase in 2011 thanks to economic recovery in its key source markets and conflict in competitor destinations such as Egypt and Tunisia.

Taking into account that tourism accounts for almost 18% of GDP, the government has introduced initiatives to draw visitors and help with financial recovery, such as the cut in value-added tax for hotel stays from 11% to 6.5%, a reduction in ferry ticket prices and the waiving of landing and taking-off fees at airports outside Athens.

In an effort to boost cruise shipping and tourism, the government passed a law in 2010 which allowed non EU-flagged ships to travel round the Greek islands.

Internet marketing boosts numbers
New marketing campaigns have resulted in increased arrivals from core countries such as the UK and Germany and newer markets like Russia, Israel, the Balkans and Ukraine. Some of these campaigns include the "You in Greece" website, particularly in Russia, as well the marketing of Greece on websites such as Facebook, Expedia and Twitter.

Russian visitors on the increase
The lifting of visa restrictions for non-EU citizens from Turkey, China and India has also benefited the increase in tourists over 2011. The government is also working on simpler visa procedures for tourists from the Ukraine and Russia. Russian visitors are expected to exceed 500,000 in 2011, an increase of 50% over 2010.

Tourist arrivals at Greek airports accounted for a total of 1,147 thousand in the first four months of 2011, an increase of 5.6% over 2010, with tourism officials forecasting a record number of arrivals this year.

International arrivals to reach pre-crisis levels in 2011
According to the UNWTO, in terms of receipts, Greece has seen an increase of around 5% in the first 4 months of the year. Based on early bookings, the hotel federation expects that arrivals will rise about 10% to 15.9 million and revenue by as much as 7% this year. Thomas Cook also reported that summer bookings for Greece were 13% higher than last year. Furthermore, according to Expedia, for the first time ever, reservations have been made for as late as November.

Limited impact over the long term
Foreign governments have been very moderate in their travel advice regarding Greece, with no travel restrictions in place. According to the UNWTO’s General Secretary, Taleb Rifai “recent protests in Greece, notably in the capital Athens, are not expected to impact tourism flows to the country in the long term”.

However, as long as social tensions remain high there is always a risk that Greece’s reputation as a stable destination may be undermined. Fortunately, to date tourists have not been involved in the country’s internal conflicts and it is still perceived as a save country to visit.