Hopes pinned on a late tourism surge
The recovery of Greek tourism and the country’s economy in general is relying on the possibility of a significant growth in demand for summer vacations abroad in the countries Greece traditionally draws its arrivals from.
The hope is also that Greece will collect a greater share of foreign demand for holidays than usual on the strength of its success in tackling the coronavirus pandemic.
The direct contribution of tourism to the Greek gross domestic product (GDP) typically averages at 11.7%. Tourism also accounts for 16.7% of employment. With the addition of the indirect impact on the economy, with each euro of tourism revenues boosting GDP by €2.2-2.65 according to economists, tourism affects 25.7%-30.9% of GDP.
During peak periods, tourism also accounts for up to 36.7%-44.2% of employment, according to data processed by the Institute of the Greek Tourism Confederation (INSETE).
However, if this year continues with the projected reduction of travel demand by 70% (some estimates even point to a drop of as high as 90%), the direct cost to Greek GDP will come to €14 billion, and along with the indirect impact, losses for the economy will reach €31 billion: that is 7.2% and 15.9% of GDP respectively.
The McKinsey estimates that are being used by INSETE point to a 70% decline in demand abroad that would take Greek tourism turnover in the second half of the year to just €3.47 billion, based on projections on last year’s revenues.
Adding first-quarter takings of €619 million, according to the Bank of Greece, the country can expect to collect just €4.08 billion from tourism throughout 2020, against €18.15 billion in 2019. This is also based on the assumption that there will be hardly any arrivals from the United States and Britain, which currently appear to be out of the travel market for most of the summer due to the course of the coronavirus pandemic there.
Vacation demand could rebound further toward the end of this summer, and there are aspirations that Greece will garner a greater share of Mediterranean tourism traffic by being considered a safer destination in health terms.
