Greece’s tourism boom faces growing risks from climate change and overtourism, the Bank of Greece warned in its Monetary Policy 2025-2026 report, stressing that both challenges could weaken the sector’s long-term sustainability.
The central bank also expressed caution over Greece’s strong dependence on tourism which makes the wider economy more vulnerable to external shocks. Tourism remains one of the country’s most vital economic drivers, but the report argues that continued growth now requires better planning, stronger infrastructure, and a more sustainable development model.
Climate change reshaping tourism demand
According to the Bank of Greece, the country’s economy, which is among those heavily dependent on tourism, is expected to face significant pressure as a result of climate change. Its tourism infrastructure and existing policy framework may help reduce part of the impact, but they cannot eliminate the risk altogether.
The report highlights the manner in which climate change affects Greece through extreme heat, prolonged heatwaves, and severe weather events such as storms Ianos and Daniel. These conditions can influence both demand and supply and can be a determining factor in when travelers choose to visit, where they go, and how smoothly destinations can operate under pressure.
For that reason, the Bank of Greece maintains that tourism policy must incorporate climate risks into long-term planning. The issue no longer concerns only environmental protection. It now affects investment decisions, infrastructure, water and energy management, and the ability of destinations to remain attractive in a warmer and less predictable climate.
Greece needs a more balanced tourism model
Greece needs a more sustainable tourism model, says the Bank of Greece, built around four main priorities, including the reduction of seasonality, the spread of tourism activity more evenly across the country, the development of alternative forms of tourism, and the improvement of environmental management related to activities in the tourism sector.
This would require increased investment in infrastructure, more green investment, and a greater rational use of natural resources. Water and energy require particular attention in destinations that face intense seasonal pressure, especially during the summer months.
The goal, according to the report, should be to strengthen the resilience of Greek tourism while protecting its long-term competitiveness. In practical terms, Greece needs to move beyond a model that relies heavily on a limited number of destinations and a short peak season.
Overtourism strains destinations and local communities
The Bank of Greece also warns that overtourism places significant pressure on both natural and urban environments. The report stresses that overtourism does not depend only on the number of visitors. It also reflects geographic, seasonal, and management imbalances.
Tourism has expanded rapidly in recent decades, bringing major economic benefits to Greece but also resulting in pressure points in popular destinations. Similar patterns appear internationally in cities, islands, historic centers, and coastal areas where visitor flows exceed the capacity of local infrastructure and communities.
The central bank identifies several drivers behind overtourism, including the global rise in tourism demand, low-cost airlines, digital booking platforms, and higher disposable income in many parts of the world. Affordable air travel and cruise tourism have also made short, high-volume visits easier and more frequent.
Environmental, social, and economic costs are rising
Overtourism affects destinations on multiple levels, beginning with the natural environment. High visitor volumes place growing pressure on ecosystems, increasing pollution and waste while straining limited resources such as water and energy.
The impact is equally visible in urban areas, where heavy tourist flows accelerate the deterioration of public infrastructure and cultural heritage sites. Over time, this pressure can also reshape neighborhoods, gradually altering their character and weakening local identity, particularly in areas where tourism becomes dominant.
For residents, these changes are felt in everyday life. Overcrowding becomes routine in peak seasons, while housing costs rise and access to essential local services declines. As a result, social cohesion can erode, as the balance between tourism activity and community needs becomes harder to maintain.
The economic consequences are increasingly difficult to ignore. Although tourism remains a major source of income, the Bank of Greece warns that overtourism can ultimately weaken its own foundations. Congestion and a degraded visitor experience risk reducing the competitiveness of destinations over time, threatening the long-term sustainability of tourism-dependent economies.
Bank of Greece calls for more efficient monitoring of tourism risks
To address these pressures, the Bank of Greece calls for policymakers to monitor tourism indicators more closely and more effectively distribute visitor flows in terms of timing and location.
According to the report, additional measures that ease pressure on the most popular destinations, strengthen environmental sustainability, and improve infrastructure are needed. It also highlights the need to train tourism professionals and raise visitor awareness about the protection of historic monuments and respect for the quality of life of permanent residents.
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