Bad news for tourism business
As far as Greece’s tourism industry goes, Germany, the United Kingdom, the United States, France and Italy are the country’s best clients. Visitors from these countries accounted for almost exactly half (49.8%) of tourist revenue in 2019. However, the signs from these five economies are not good, according to a study by INSETE, the research institute of the Greek Tourism Confederation (SETE).
That the coronavirus pandemic has caused a global recession is no surprise. But a closer study of these main starting points for incoming tourism puts paid to any expectations of a strong rebound toward the end of the third quarter, or even the fourth.
Greece’s tourism industry earned about 3 billion euros from German tourists in 2019, or 16.7% of its total revenue. It is estimated that the German economy had been operating at 60% capacity in the second quarter of 2020 and could rebound to 75% in the third quarter and 90% in the fourth. But the INSETE report says that “it will be negatively impacted by protections and interventions still in force to face a likely second wave of the pandemic.” The German economy is expected to shrink 6.7% in 2020.
British visitors accounted for about 2.6 billion euros in revenue (14.5% of the total) but, as the country had as of July failed to deal effectively with the coronavirus, it was seen operating at just 40% capacity in the second quarter, compared to the eurozone’s 55%. Added to anemic growth even before the pandemic – due to the uncertainty surrounding Brexit – the UK’s gross domestic product is expected to shrink 8.2% this year.
The United States, which contributed 6.7% of Greece’s tourism revenue in 2019, was operating at 50% capacity in the second quarter, like the next largest contributor, France, and better than the fifth contributor, Italy (45%). But the two European countries overcame a bad start to get the outbreak largely under control, whereas the US clearly has not. The economies of France and Italy are expected to shrink 8.8% and 8.9%, respectively. The US may perform even worse.