The market is showing its teeth in Greek tourism as the law of supply and demand is off balance in at least some destinations. On the demand side, there is a lag in relation to the expectations cultivated at the beginning of the season, while on the supply side, the pricing of services does not correspond to “value for money”, somewhat blurring the picture.
Overall, however, the figures remain positive compared to both 2022 and 2019, while representatives of tourism and the Bank of Greece still estimate that the level of receipts for Greece will exceed the 18.3 billion euros of 2019.
Estimates of a super year were greatly boosted in the first quarter of the year when international tour operators booked thousands of seats in anticipation of a boom in demand. But what followed was not the same as either new tourist markets “came forward” with offers like Turkey’s, causing travel agents to change preferences or the general climate of economic uncertainty in Western Europe restrained the world’s moods for travel.
Greek Tourism: Not a bed to spare in Athens hotels
Thus, on the one hand, the number of travelers was negatively affected, on the other hand, the general impression is that overnight stays decreased, while the value for money trend became even more noticeable. At the same time, a decrease in non-hotel consumption was recorded, affecting the revenue trend.
The opinion of the owner of a medium-capacity 5-star hotel in Crete, as expressed to ot.gr, is typical. “As we reduce the price we reach 100% occupancy, as soon as we increase it we fall lower.”
A difficult puzzle
The search for the right balance (price), in a period of increased operating costs, from the hotel side as well, is a difficult puzzle, due to international competition and also the economic tightness internationally that affects purchasing power.
The Bank of Greece pointed out in the recent report of its governor Yiannis Stournaras on the course of the Greek economy that states that “expectations for travel traffic and related receipts are favorable and the relevant figures are expected to exceed the levels of 2019… . However, the continued presence of inflation, which is eroding disposable income in major traveler-origin countries, as well as uncertainty linked to geopolitical developments, the high cost of air transport and competition with other regions that are reactivating tourism could limit the expected proceeds”.
The former president of the Association of Greek Tourism Enterprises (SETE) Yiannis Retsos advances in a similar formulation, explaining the differences observed from destination to destination but also expressing his optimism for a new year of record revenues. “In the course of this year’s tourism year, positive and negative comments will be heard about the course of the destinations. Why? Because 2023 is the first normal year since 2019. And in a normal year, there is intense competition from the big international destinations, there are the tour operators who adjust their plans according to their interest, there are the very cheap, but quality, destinations of Turkey and Egypt, in other words there are options! Our obligation is to provide a properly priced service that meets value for money. And of course the continuous improvement of infrastructure and therefore destinations, in order for the symbiosis of residents-tourists to be sustainable. With the ups and downs and any complaints, this year’s forecast for a new year of record revenue for Greek tourism remains realistic” is the long tweet of Yannis Retsos.
The image of arrivals is positive
However, according to the latest INSETE (SETE’s research institute) data, the picture of arrivals is particularly positive. In the period January-May 2023, 5.3 million international air arrivals were recorded, at the country’s most important airports, surpassing the levels of January-May 2022, showing an increase of +29.3%/+1.2 million arrivals, while compared to 2019 the increase is 9.6%.
In international arrivals by road there is a lag as in the five months of 2023 international road arrivals reached 2.3 million, compared to 1.5 million in the period January-May 2022, showing an increase of +52.9%/+779 thousand road arrivals arrivals, but compared to 2019, when they reached 2.7 million, they are down by 14.8% . However, it should be emphasized that in 2019 road arrivals were down during the same period compared to 2018. In total, air and road arrivals are at 7.6 million, almost 1.5% more than in 2019.
In terms of air arrivals: Athens International Airport (+57.5% compared to 2022) and 2019 (+10.5%), Thessaloniki Airport (+33.2% from 2022 and 3 .5% from 2019), the airport of Heraklion (+8.5% and +2.97%), Chania (+11.0%, +8.33%), Rhodes (+17.2%, +25.06%), and Kos (+7.8%, +2.68%). Also at the airport of Corfu, international air arrivals reached 259 thousand, showing an increase of +9.1% compared to 2022 and 8.14% compared to 2019.
On the contrary, 49 thousand international air arrivals were recorded at Mykonos airport in the 5th month, showing a decrease of 17.6% compared to 2022 and a decrease of 20.96% compared to 2019. A decrease of 4.9% compared to 2022 was also recorded by the airport of Santorini, but compared to 2019 it records an increase of 31.03%.
Kalamata airport also recorded a decrease of 12% (-3 thousand passengers) compared to 2022, while compared to 2019 the decrease is 8.3%. In addition especially in May, international air arrivals reached 2.6 million showing an increase of +14.6% compared to May 2022 and +8.7% compared to May 2019.
The Bank of Greece is optimistic
The Bank of Greece governor’s report for its part points out that initial indications are particularly positive, as in the first quarter of the year non-resident arrivals and travel receipts reached 111% and 116% respectively of 2019 levels, raising expectations to surpass the historically high levels of 2019.
In the same period, foreign passenger arrivals at all airports in the country exceeded the corresponding rates for 2019 by 9.1%. Furthermore, in a recent survey by the European Travel Commission, Greece is ranked 4th among the top 10 European destinations that European citizens want to visit in 2023, but far behind the top three countries (France, Spain and Italy).
At the same time, it is significantly ahead of the countries that follow in the ranking, i.e. Germany, Croatia, Portugal, Austria, Belgium and the United Kingdom. The research concludes that pleasant weather conditions and attractive offers are for Europeans the top criteria for choosing a destination, while the preference for uncrowded destinations takes third place.
Therefore, the Bank of Greece adds, the prospects for Greek tourism for the current year remain promising. However, the average expenditure per trip decreased by 9.6% compared to the same period in 2022, although it should be taken into account that the January-April period is not a period of high demand for tourist services.
What’s happening in Turkey and Spain
At the same time, neighborlng Turkey records an explosion of arrivals as international travelers to the country in the 5th month of 2023 reached 14.3 million, marking an increase of 23.65% compared to 2022 and 10% compared to 2019. In their Spain In the first four months of 2023, arrivals reached 21 million, a 32.4% increase compared to 2022 and a 1.9% decrease compared to the same period in 2019.
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