Although tourist arrivals to Greece this year are showing an upward trend — very close to the original target of 25 million (along with an extra 2.5 million arrivals from cruise travel) — revenue seems to be falling below forecasts.
Citing recent data of the Bank of Greece, the Greek Tourism Confederation (SETE) on Monday stressed that during the first seven months of 2016 travel receipts in Greece were down by some five percent or some 346 million euros less compared to the same period last year.
“It is obvious that this year’s tourism revenue will be at levels significantly lower than expected”, SETE said in an announcement.
In July alone, travel receipts dropped by some three percent or some 100 million euros, compared to the same month in 2015. “This is a development that will likely affect the annual results”, SETE said.
The confederation highlighted the factors that are influencing the course of Greek tourism and its competitiveness and include a some 10 percent increase of costs for tourists, successive hikes in value-added tax (VAT) rates, the abolition of the reduced VAT rates on the islands and charges to all sub-sectors of tourism with new fees and taxes.
SETE added that Greece hardly had any benefit from the geopolitics of the Eastern Mediterranean and lost the opportunity to capitalize on the fact that — despite the refugee / migration issue — it remains the safest tourism destination in relation to the surrounding area.
“In order to maintain and strengthen the key contribution of the sector to the national economy, the state should give priority to an effective solution to the refugee/migration issue, invest in a targeted promotion of Greek tourism and assure the sector that it understands the need to restore tax rates to competitive levels”, SETE said.
According to data of the SETE Institute (InSETE), those directly employed in the hotels and restaurants, represent some 10 percent of all workers in Greece, placing tourism in the third largest employment category, behind the trade and primary sectors.
SETE called for tax rates to return to competitive levels, for efficient development tools, for the investment law to be launched immediately and for a viable solution for the problem of non-performing loans.
“These factors are considered as catalysts for the final effort to recover the sector’s lost revenue by the end of the year and for the further development of Greek tourism in the years to come”, SETE concluded.