Greece to Set New Record for Tourism in 2022
Greece will probably break records in terms of tourism revenue this summer, Alpha Bank said on Tuesday.
In its weekly economic developments report, Alpha Bank highlighted that Greece’s tourism revenue this year is expected to reach 20 billion euros, significantly exceeding the amount generated by tourism in 2019 (18.2 billion euros).
“2022 will probably emerge, according to the data available so far, as a new record year for Greek tourism,” the bank’s analysts said.
According to Alpha Bank, pent-up demand for travel due to the two-year Covid-19 pandemic and large household savings, accumulated during the period of restrictive measures, have increased spending per trip, which is is expected to lead to:
– Greece’s GDP to continue its strong rise in the second and third quarters of the year and approach levels significantly higher than the average of the European Union (EU-27)
– a boost to state coffers, this way allowing the government to offer additional support measures for households and businesses against rising prices due to the energy crisis.
Alpha Bank added that another positive aspect is Greece’s exit from the enhanced surveillance regime on August 20. “This allows for the government to exercise its fiscal policy with more flexibility within the framework of the rules applicable at EU-27 level,” the bank said in its report.
Some 8 million travelers from abroad visited Greece in the first half of 2022 with travel receipts amounting to 5.1 billion euros. Compared to the January-June 2019 period, this year’s tourism figures were down 15 percent and 5.3 percent respectively. Meanwhile, the average expenditure per trip increased by 12.6 percent compared to the January-July 2019 period.
In addition, passenger traffic to Greece accelerated in July with international arrivals at Greek airports up by around 200 percent during the first seven months of the year, compared to the same period in 2021.
Alpha Bank said that travel receipts during the first half of 2022 boosted state revenue, which amounted to 41.8 billion euros compared to 35.3 billion euros in the same period of 2021, registering an increase of 18.5 percent. The increase of revenues from VAT is also considered significant as it amounted to 8.4 billion euros compared to 6.7 billion euros in the first half of 2021.
“In conclusion, Greek tourism is heading for an excellent year, supporting public revenue, despite inflationary pressures worldwide and the environment of high uncertainty that has emerged following the Russian invasion of Ukraine and the energy crisis,” Alpha Bank noted in its report.
Alpha Bank added that the prospects for the Greek tourism product remain particularly positive.
“This assessment is supported by international trends such as the growth of the middle class in emerging Asian economies (e.g. China, India) and life expectancy which are expected to lead to an increase in tourist flows worldwide, as well as domestic factors, such as the increase in investment activity, particularly through the resources of the Recovery Fund.”
Alpha Bank’s analysts pointed out that the impressive increase in tourist flows brings to the fore the need to readjust the business models of Greece’s tourism sector, aiming for:
– sustainability against the threat of climate change and overtourism, in certain periods of time or destinations, and
– ensuring that the quality of the country’s tourism product follows the modern trends (megatrends) with regard to demand.
“In order for the rise of tourism to be maintained and made sustainable in the medium-long term, the new challenges that arise need to be addressed,” Alpha Bank said in the report.