Greece may not repeat the tourism arrivals and revenues record of 2019 before 2025, according to an Ernst & Young report on the effects of the pandemic on Greek tourism, heralding a five-year crisis for the sector. This year alone the local industry is set to lose about 10 billion euros, it said.
According to EY, Greek hotels stand to lose as much as €4.46 billion in turnover this year. For year-round hotels, losses will come to €1.2 billion and for seasonal units the turnover drop will amount to €3.26 billion.
From the 34.4 million arrivals Greece welcomed in 2019, the baseline scenario of EY shows just 14.5 million visitors in 2020, climbing to 24.8 million by 2024. Tourism revenues will drop from just over €18 billion last year to €8.9 billion in 2020 and rebound to €15.2 billion in 2024. These losses will be crushing for the sector and be combined with a dramatic pressure on profits, the report warns.
For this year, EY’s baseline scenario on the gross added value of the sector for the economy speaks of €14 billion, with the favorable scenario at €16 billion and the adverse one at €12 billion, compared with the €22 billion of last year. All three scenarios showed the biggest annual slump over the second quarter, ranging from 41% to 53%.
Even the favorable scenario foresees losses in tourism takings in 2020 amounting to almost €10 billion, holding on to just €8 billion from last year’s €18.18 billion, according to Bank of Greece figures. A possible extension to the peak season into September will not be enough to cover these losses, but at least the country’s impressive performance in containing the epidemic may allow it to claim a bigger share of this year’s shrunk tourism market, EY estimates.
It goes on to recommend that tourism enterprises prioritize hygiene and safety, stay in close contact with suppliers, investors and regulators, place emphasis on cash flow and make strategic moves for reaching out to new markets along with countries showing a similar picture in handling the coronavirus crisis.