Instability deprived country of 1 bln euros in tourism takings

Greece would have benefited from an additional 1 billion euros from tourism this year had it not been for all the speculation about its possible exit from the eurozone and the consequences of the capital controls after the July referendum was called, according to Yiannis Retsos, the head of the Hellenic Federation of Hoteliers.

Retsos added that the sector proved resilient enough to withstand the political and economic instability and the serious problems that enterprises faced at the height of the tourism season.

According to the Association of Hellenic Tourism Enterprises (SETE), Greece is likely to end this year with a record 26 million tourism arrivals from abroad and over 14.5 billion euros in direct revenues, adding an extra percentage point to gross domestic product and bolstering local communities.

Retsos explained that the considerable increase in arrivals by road from Southeast Europe and elsewhere, as well as the increase in the number of flights to Athens, played a major role. Consequently, he added, the improvement of infrastructure and services at foreign tourists’ entry points on the borders should become a priority.

The hoteliers’ president also noted that another attraction for foreign markets has been the pricing policy of Greek hotels in recent years. Due to that, he estimated that hotel revenues will not follow the rising course of the country’s tourism revenues, as hotels responded to the capital controls at the peak of the season with discounts and offers to keep demand for August and September going.

Based on the latest data on incoming tourism that SETE published this week, international air arrivals in the first eight months of the year increased by 6.3 percent from last year to reach 11.7 million. In August alone arrivals grew by 4.6 percent, reaching almost 3 million.

Retsos estimated that Greek tourism will retain its growth momentum in 2016. However, he pointed out that in order for this to happen, stability must return to the political and economic environment and problems such as the refugee crisis must be brought under control. On the value-added tax hikes, Retsos said that Greek hotels have already decided ahead of next season to absorb a large share of the tax increase.