Pandemic Costs Greece €15bn in Tourism Revenues

Acropolis, Athens. Photo: GTP

The coronavirus (Covid-19) pandemic and the ongoing containment measures worldwide have cost Greece 15 billion euros in tourism revenue, according to a National Bank of Greece (NBG) study released on Tuesday.

Findings for 2020 are grim, with NBG analysts expecting total tourist demand to fall by 75 percent for 2020 (international traffic down by 80 percent and domestic by 45 percent).

Overall, sector turnover fell by 12 percent in Q3, the study found. 

With quarantine measures and travel restrictions in place, Greek hotels saw overnight revenue drop to near zero in Q2 marking the best performance in August-September but still down by 60 percent compared to the same period a year ago (this figure includes hotels that remained closed).

Operating hotels recorded a 35 percent decline in overnights in the same two months and 45 percent occupancy levels against 70 percent in 2019. Island accommodation facilities felt the brunt of the pandemic’s repercussions primarily due to their reliance on incoming tourism from abroad mainly in the summer. At the same time, however, NBG analysts note that hotels on the islands appear to be better prepared for the next day as they are in good financial standing, the result of their development over the last 10 years. These hotel enterprises are already investing on the upgrade of services provided.

Looking ahead, NBG analysts underline that in view of the inevitable increased competitiveness, “now is the chance for Greece to move away from the mass tourism model, which is characterized by strong seasonality and dependence on agencies abroad”.

In this direction, NBG suggests the increase in the number of luxury hotels in order to meet the demand and to attract higher income travelers; ensuring connectivity with the islands; and the top priority, accelerating the upgrade of port, airport and marina infrastructure. 

Lastly, it should be noted that the pandemic has created a new trend with travelers now seeking  destinations where safety is ensured and quality services are offered. Indicatively, 50 percent of tourists from Greece’s source markets said they base their decision to travel on these factors.