The Greek economy’s great dependence on tourism and the global slump in tourism flows this year was the main reason observers put the country’s economic contraction estimates for 2020 at 9-10%, a new report by Ernst & Young Greece notes.
Its report published on Monday, the firm’s Corporate Strategy and Transactions Consultancy Department said that the considerable drop in international tourism due to restrictions since late February hit Greece so hard due to the tourism industry’s significant contribution toward the local economy, which amounts to 20.8% of gross domestic product according to the Institute of the Greek Tourism Confederation (INSETE).
The latest estimates by the International Air Travel Association (IATA) show that the decline in air traffic this year is expected to reach 66% on an annual basis, while the loss of revenues will amount to $371 billion globally.
For its part, the United Nations World Tourism Organization (UNWTO) estimates that international arrivals will drop 70% this year, while job losses in the sectors of tourism and travel services already exceed 143 million. Out of the top four markets that support the tourism sector in Greece, the biggest slide was in visitors from the US (down 92.9%), followed by those from the United Kingdom (down 73.9%).
EY notes that the performance of Greek hotel units predictably followed those observed in Europe and the rest of the world. The average occupancy rate in the key quarter of July to September 2020 amounted to 23%, against 71% in the same period last year, with the relatively better figure in August not exceeding 30%.
There was a similar reduction in the other main indexes recorded by the EY report, such as the average overnight rate for hotel rooms and revenues per available room.
According to the Hellenic Statistical Authority (ELSTAT), the employment index in the tourism sector recorded a 35.9% fall in the second quarter of 2020, compared to the same quarter in 2019, while salaries and other payments in the domain were down 69.7% on a yearly basis.