All aboard to Greece: With lifting travel restrictions, what is the future of the Greek tourism industry?

This summer it appears as if a large portion of travelers are either currently vacationing in Greece or have plans to do so. Seemingly more than usual, social media is awash with people enjoying their holidays in Santorini, Crete, Mykonos, Corfu, and the mainland as well. So is there an actual boost in tourism to Greece this summer and, if so, how is this impacting the Greek hospitality industry?

Judging by the latest publicly available data and related press coverage, almost 2.3 million foreign tourists have visited Greece so far this year, with Germany, Poland, France, and the United States providing some of the largest influx. Compared to July 2020, when tourism to Greece reopened after the first pandemic lockdown, foreign tourist arrivals for last month (June) were up between 40% to 50%. And the number of incoming tourists is expected to increase now that the United Kingdom lifted its lockdown restrictions and allowed British citizens more latitude to travel abroad as of July 19.

Much of this June increase in travel can be attributed to the Greek government lifting many of the coronavirus-related travel restrictions just before the start of the summer travel season. Indeed, in June alone, international arrivals were close to 1.2 million people.

This increase in foreign travel remains critical to the Greek economy, where roughly a fifth of Greece’s gross national product derives from tourism and the hospitality industry. This and similar economic output metrics rise significantly on the most popular Greek islands, such as Santorini, where over 90% of its total GDP is comprised of tourism and travel-related revenues.

Greece suffered its most dramatic economic slump on record in 2020 due to the coronavirus, when only seven million tourists entered and spent roughly four billion euros, compared to 33 million tourists and 18 billion euros in revenues in 2019. Greece is currently projecting that 2021 tourist revenues will reach half the total tourist revenues of pre-pandemic 2019.

Much will depend on the ongoing success of vaccination campaigns in Greece and other countries, and the ability of the vaccines to slow the spread of the Delta coronavirus variant. To prevent the need for further national lockdowns, the Greek government has instituted measures designed to reduce the risks of foreign visitors spreading the virus. Such measures currently include limiting entry to all indoor spaces and entertainment venues, including restaurants, nightclubs, bars, and cafes, to those who can show proof of vaccination. In some areas, late night curfews also have been instituted.

And not all the vacationers are from abroad. Many Greek island hotels and hospitality venues are reporting an increase in business from Greek nationals who are looking for a summer holiday escape.

But not all of the news is good. Many hoteliers and restaurant owners are concerned that the uncertainty surrounding the spread of Covid-19 continues to impede hospitality industry revenues and will result in a summer season below earlier market expectations. As reported in Politico, the president of the Greek Federation of Hoteliers is quoted as saying, “We can’t make any estimates because of the variants … [as of the end of June], the bookings on average do not exceed 35 percent” of hotel capacity. Further, the uncertainty is preventing hoteliers from increasing their hiring of staff, a cause for concern as roughly one quarter of the Greek labor force is employed in tourism and hospitality.

A related problem concerns vaccine uptake in Greece. Younger employees in the tourism sector continue to show reluctance to get vaccinated. To change this situation, the Greek government is offering its young people a 150 euro cash card and a free month of phone data to get their first COVID-19 vaccination. Yet, Greek public health experts have expressed fears that just over half of the population may end up getting fully vaccinated. Currently, the Greek government claims that figure is already closer to 60% of the adult population.

Still, as of this writing, new Covid infections in Greece have increased by almost 7x since the start of July, with almost 2,700 newly infected reported last week. The Greek Ministry of Tourism repeatedly has dismissed claims that foreign tourist arrivals have contributed to the steady rise of new coronavirus cases in Greece. Rather, the blame has fallen on those Greek nationals who still have not come forward to be vaccinated.

For now, by all appearances, people are continuing to flow into Greece to catch the summer holiday that many of us have dreamed of since the pandemic began.

Danilo Diazgranados is an investor, collector, and lover of fine wines and a member of the prestigious Confrérie des Chevaliers du Tastevin, a fraternity of Burgundy wine enthusiasts.

Investor in and lover of fine wine and restaurants.