Greece may be among European holiday destinations seeing a strong rebound in tourism activity this year but it is still “lagging slightly” behind Spain, Portugal and Italy, according to the latest report released by global analysts Oxford Economics.
According to the Oxford Economics Tourism Tracker, Greece is also trailing behind rival destinations with regard to overnight stays. Data reveals that all European tourism-reliant economies are making a solid comeback in terms of overnight stays many achieving pre-pandemic levels in May.
Indicatively, Spain and Portugal are recording overnight stays at 2019 levels, while Italy was at 10 percent off pre-pandemic levels in May but on a positive uptrend.
Meanwhile, in Greece, overnight stays were still 40 percent below pre-Covid levels.
Overall, Oxford Economics analysts estimate overnight stays should total 95 percent of 2019 levels in 2022, up 51 percent over 2021.
The report goes on to add that tourism activity has been on a strong uptrend since February paving the way for a strong year ahead despite high inflation.
Additionally, Internet searches for tourism-related queries is also pointing to a sustained strong demand over the high season. According to the report’s analysts, households may be favoring holidays over other services such as restaurants or culture to save costs.
On the downside, the report expects the strong demand for tourism to put pressure on services inflation. On the one hand, hospitality prices have shot up at tourism hotspots exceeding pre-pandemic trends in some destinations.
Surveys suggest that the price increases aren’t over yet. According to the report’s analysts, hospitality companies expect to hike prices in coming months. As a result, higher prices may lead to stronger revenues for the tourism sector but strong demand coupled with rising labor costs in hospitality will put additional pressure on core inflation extending further into the year.
On the other hand, inflationary pressures may lead some consumers to either avoid holidays altogether or opt for more budget-friendly alternatives.