How much will COVID-19 affect Greek tourism?

How much will COVID-19 affect Greek tourism?

There has been a lot of talk lately about how much tourism will be affected in Greece because of the spread of COVID-19. Estimates such as those from Citigroup that small countries highly dependent on tourism, from Iceland to Macao, are the most vulnerable economies to the side effects of the Covid-19 pandemic, should already have mobilized the government. Especially, when not only international organizations like Citigroup but also domestic institutions ring the alarm. As the Center for Planning and Economic Research (KEPE) did for example, which, more or less, predicts that the shrinking of the tourism sector and its revenues as a result of the coronavirus pandemic will cause, inter alia:

  • Slow growth of at least 0.83 percentile points
  • GDP contraction by EUR 1,076 million
  • Decrease in employment by 38,284 jobs or 0.88%
  • Increase of trade deficit by 56%

These numbers are being revised daily, making them something of a “favorable” scenario, since they are based on moderate forecasts that international travel arrivals will be reduced by only 8%, as was the case in the 2003 SARS epidemic. However, all data contributes to a much worse crisis.

At the same time, issues that have not been properly addressed by the Greek government are the multitude of acute tourism problems. Market players consider the problem of tourism business loans to be of major importance. The problem was already serious for some, after Thomas Cook’s bankruptcy and was exacerbated further with the coronavirus crisis. But employees also face a wide range of problems that are not even known to the general public in many cases.

The large share of tourism in Greek GDP, as Greece is based on the latest OECD annual report on the 6th most dependent economy among the 35 Member States, imposes a substantial and multifaceted support to the industry, which in the period of economic recession supported the country’s economic activity almost by itself./ibna