Tourism revenues have been underestimated, bank analysis says
National Bank argues that calculation method for visitor spending falls short of reality
Real tourism revenues, as reflected in the travel balance, have been underestimated, the National Bank argues in an analysis released after the recent publication of July data, where a yearly decrease of 5.4% was recorded, even though arrivals from abroad increased by 4.1%.
The analysis cites a number of reasons for this shortfall, and particularly the expansion of short-term rentals and the intense seasonality of Greek tourism.
The border survey, which provided the data for the travel balance, may not accurately capture tourism expenditure that deviates from the norm. For example, respondents staying in short-term rentals may underestimate their spending on food. Intense seasonality, moreover, makes research difficult, as a very large number of tourists arrive in a short period of time.
In any case, the underestimation, according to National Bank’s analysis, clearly results from the mismatch between estimated tourism expenditure and the turnover of the relevant businesses, which showed a significant increase.
For example, in the accommodation and catering services sectors, turnover rose by 5.2% and 6.5% respectively in July. This is a “development that would be difficult to attribute to increased spending by Greeks on tourism services, which would more than offset the apparently reduced spending by foreigners,” the analysis said. Also, food service prices were up by 6.6% year-on-year in July, accommodation by 12.4% and transport services by 14.4%
“Therefore, at constant prices, tourism spending appears down 14.5% in July, which is also inconsistent with both the domestic and international experience,” it said. Besides, hotel occupancy reached 82.8% in July, from 82.7% a year earlier.
There is also a discrepancy with the expenses foreigners who visit Greece declared in their country, in relation to those declared in Greece. As the analysts report, “we estimate that the actual final expenditure of tourists is likely to exceed by around 1 billion euros the final official record in the whole of 2024.”
