Hikes in VAT and other taxes and levies have forced tourists to cut their spending in Greece this year.
Greece will likely miss its target of increasing annual revenues from tourism this year, while rival destinations such as Spain are setting new records, giving their economies a major boost.
According to the Association of Hellenic Tourism Enterprises (SETE), there is a clear risk that despite the increase in tourism arrivals the industry’s revenues for the year as a whole will be considerably below expectations, The January-July figures announced recently by the Bank of Greece confirm this risk.
The data show a 5 percent decline (or 346 million euros) in the year’s first seven months compared to the same period last year, while July alone posted a 3 percent annual drop (or 104 million euros), which will have a significant impact on the annual result.
SETE stressed that it has been highlighting the factors affecting the course of Greek tourism as well as its competitiveness since the start of the year: The hikes of more than 10 percent in the tourism market basket (accommodation tax, transport etc), the constant value-added tax hikes, the abolition of the Aegean islands’ VAT discounts and many other taxes and levies have altered tourists’ consumer behavior, leading to lower expenditure compared to previous years, SETE notes.