Greece’s tourism sector appears to be resilient to the impact of the Russia-Ukraine war, which may weaken the upward dynamic but in no way hinder it said a report released this week by Alpha Bank.
According to the bank’s “Greek Tourism Industry Reloaded: Post-pandemic Rebound and Travel Megatrends” report, Greek policymakers will have to reexamine and redesign tourism policies to address the new challenges and create business models that will be resistant to market shocks.
The report’s analysts are echoing previous findings that the impact of the war on tourist flows to Greece will be limited given the small share of arrivals of Russian tourists to Greece, which stood at a mere 1.9 percent of the total in pre-pandemic 2019. The share of arrivals from Russia fell to 0.3 percent in 2020 impacted by Covid restrictions, rising to 0.8 percent last year. The same market accounted for 2.4 percent of tourism receipts in 2019 and 1.1 percent in 2021.
The war is however expected to affect traveler spending from key source markets such as the US, UK, Germany, France, Italy, and Romania due to increasing costs as a consequence of rising energy costs.
The Alpha Bank report goes on to note that this will be mitigated thanks to accumulated savings made during the pandemic and the tendency for increased consumption in the post-pandemic period.
Lastly, the Russia-Ukraine war and its effects on the global energy market are expected to impact tourist enterprises which are now faced with higher operating costs leaving little margin for profit.
Earlier this year, Greek Tourism Minister Vassilis Kikilias said the ministry was closely monitoring the Russia-Ukraine crisis in order to address the potential backlash on tourism in terms of inbound travel and rising energy costs.