The debt crisis has had its toll on most everything and everyone connected to Greece. Many Greeks are suffering through harsh financial times that have deeply altered their everyday lives for the worse and the floundering Greek economy is not expected to recover from its Catch 22 situation for a long time. The new coalition government has reneged on its campaign promises while tourism, the country’s largest contributor, making up 16.5% of the economy and giving jobs to one out of five Greeks, has taken a big hit too.
After last year set a record for tourism, the relentless recession caused by two years of austerity measures is taking its toll, with a 15% drop in revenues expected for 2012, and far fewer visitors, Andreas Andreadis, Chairman of the Association of Greek Tourism Enterprises (SETE) told Reuters. Although Greece is still receiving many visitors, especially from China and some newly-wealthy former Soviet bloc nations, the overall economic climate remains bleak for the sector due to the reduced purchasing power of the tourists and the effect of pay cuts, tax hikes and slashed pensions on Greek workers, the poor and elderly.
The debt crisis has brought on a considerable shift in the make-up of visitors, with China and Russia taking the lead, and Germany, the UK, Holland and France falling behind. According to the German TUI Travel Agency, German arrivals have dropped by 30% in 2012, down to about 700,000. The French prefer Tunisia this year as the tensions of the Arab Spring uprising has rolled back a year after the upheaval there and because of long-standing ties remaining from the Colonial era.
With the revolutions also subsiding in other North African countries, including Egypt, Libya, and Morocco, tourists feel less fearful of visiting those countries, which have replaced Greece as their destination. To make matters worse, Turkey is increasing its lead over Greece in the number of tourists, driven by the rise of Istanbul as a world-class city while Athens, wracked by riots, decay and crime, is falling apart.
Greece is losing another former favorite, the Italians, as well as the domestic market of Greeks who can’t even afford to travel within their own country, with many people foregoing vacations and heading for their villages instead. The Italian government is also urging residents to stay in their own country to give the economy a boost.
Besides the recovering North African countries, there are other important reasons why those who used to prefer Greece are going elsewhere and the country is bringing in different nationalities. The crisis and the fear of Greece leaving the Eurozone have stoked worries and images of Greece in turmoil have been played around the world for two years.
The fear of a sudden default that could bring political instability, and more protests, strikes and riots are making tourists wary. British and Dutch tourists have also shown a drop in numbers, while the world economic crisis continues and fear for their safety has made many tourists from countries that once preferred Greece to change their mind.
For many Germans, traveling this year to Greece was seen as risky because of growing enmity between Greeks and Germans, exacerbated by some Greek politicians blaming Germany for being behind the austerity measures and even recalling World War II hatred. Some German media have presented Greece negatively, making Germans who used to come here ask Greek friends whether it was necessary to bring food and medical supplies with them. Some reports even presented the Greek situation as a pending civil war.
On the other hand, Greece has witnessed a wave of new tourists, also including, Israelis, Serbians, Bulgarians, Idians and Arabs. According to SETE, tourists from these countries made up for some of the losses and cancellations earlier this year, allowing some optimism to return, along with the June 17 elections that produced a new – if shaky – coalition government,
Russia sees Greece as a fellow Orthodox Christian country and the two countries have tried to strengthen their cooperation in different fields lately after a long period of cool relations. The Russian involvement with Mount Athos and other monasteries in the peninsula of Halkidiki, Russian interest in investing in Greek real estates and agriculture and the geo-strategic importance of Greece in the South Mediterranean region are some of the key reasons why Russian tourists are increasing their presence.
Chinese tourists have considerably increased in the past two years, as China has expanded its investments in the debt-ridden country. China has strengthened its cooperation with Greece in various fields, such as wine and oil exports, technology and infrastructure, while tourists claim to be fascinated by the ancient Greek culture, history and art.
Tourists from neighboring Balkan countries have also increased in numbers, especially in Northern Greece. Thessaloniki has been revived by the presence of Serbian, Bulgarian and especially Israelis entranced by its former status as a Jewish stronghold before the Holocaust of WWII devastated the population there and threatened to wipe out its cultural and historic significance.
Sofia Kaltziegeri, a Municipal officer from the island of Sifnos, told Greek Reporter that the summer season has been going well in terms of arrivals, with a remarkable rise in the numbers of French tourists for the mid-summer season. Chinese, Japanese and Russian visitors have also chosen the Aegean island, but local businessmen complain about the reduced spending that has cut into the business of of the island’s shops, sites and restaurants.
The President of the City Council of Santorini, Aris Chloridis, also confirmed the increase in tourist arrivals within the past two months and said he was hopeful the season would close well. “Putting an end to the political turmoil … stabilized the tourist sector. August has been the month of Europeans and Greeks, but Russian tourists have also made their virginal appearance in Santorini, while Chinese, Turks and other nationalities from the former Eastern Block have visited the Aegean island this year,” he said. He also noted that the continued high taxation rate on businesses by a government desperate for revenues has hurt profitability.
The much-maligned Greek National Tourism Organization (GNTO) initiatives promoting the country’s natural beauties and hospitality, the sight of German politicians coming to Greece for vacations and Hollywood stars sailing through the Ionian and the Aegean Seas seem to have eventually helped bring back visitors. (See Hollywood Stars talking about their Greek vacation)
Ina a recent interview with the Guardian, the President of Greek Tourism Business Association noted that numbers have rebounded after the June 17th elections and there is the rest of the season can still be salvaged after it seemed doubtful just a month ago.