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Greek tourism bounces back, but high inflation rears its head

Foreign visitors are flocking back to Greece's islands and ancient monuments, raising hopes for its vital tourism industry after a turbulent two years. However, the impact of high inflation means a return to normal may still be some way off.

Foreign visitors are flocking back to Greece’s islands and ancient monuments, raising hopes for its vital tourism industry after a turbulent two years. However, the impact of high inflation means a return to normal may still be some way off.

Greek tourism suffered its worst-ever year in 2020 when the pandemic decimated global travel.

This year, despite a deepening global cost-of-living crisis and the continued presence of the virus, officials expect the sector to bring in 80% of the record 18 billion euros of revenues generated in 2019.

“After two years of hard pandemic, we’re glad to have our guests back in a normal season,” said Babbis Voulgaris, a hotelier on the Ionian island of Corfu. “Occupancy is high for our hotels. For the rest of the summer, we’re optimistic.”

Tourism accounts for a fifth of the economy and one in five jobs, percentages that are even higher on Corfu.

The island of Paros is one of the most famous Greek islands of the Aegean Sea and it belongs to the Cyclades islands archipelago.
The island of Paros is one of the most famous Greek islands of the Aegean Sea, and it belongs to the Cyclades islands archipelago.

According to the Greek central bank, the sector began to recover last year and is expected to keep growing for the next two years.

“We’re very happy, satisfied,” said Tourism Minister Vassilis Kikilias, cautioning that the pandemic, economic crisis and the war in Ukraine made for “a very, very difficult” backdrop.

With soaring energy prices and other inflation exacerbated by the war and labour shortages, Voulgaris – who heads the Corfu hoteliers’ association and sits on the board of tourism confederation SETE – agreed that the sector still faced “a lot of problems.”

Michalis Minadakis, general manager of the luxury Grecotel Cape Sounio resort outside Athens, said energy inflation was reaching “unbelievable” levels.

“Electricity (prices) could be 100 per cent up, the same for gas,” he said

Nevertheless, travel demand was high, and bookings for this year had begun as early as last Christmas, Minadakis noted, with the market from Britain – traditionally one of the biggest for Greece – tripling compared to 2019.

Overall, “I believe 2022 will be even better than 2019,” he said.

Via AAP