![NBG: Inflation and arrivals raise the threshold for Greek tourism revenues to 21 billion](https://www.ot.gr/wp-content/uploads/2023/08/anthony-picotte-hCwQV3HjoQ4-unsplash-scaled.jpg)
Greek tourism in 2023 is guaranteed to surpass the record year of 2019, according to an analysis by the National Bank of Greece, which highlights the importance of new trends related to the effects of climate change and the preferences of tourists in the post-pandemic period for less saturated destination.
According to NBG, this is due to the sustainability of Greece’s superiority over its competitors in the Mediterranean market, the positive start of the summer season, but also the emergence of new challenges for the sector from emerging competitive markets and the consequences of climate change.
Hotels
Confirming the positive expectations cultivated at the beginning of the year (with +10% recruitment in hotels compared to spring 2019), the arrivals of foreign tourists in our country during the spring quarter (March-May) exceeded the levels of 2019 by 10% and collections by 19% (€2.8 billion). A key role was played by the “traditional” markets, with an increase in their share to 42% (from 39% in 2019), and the US market standing out with an almost doubling of arrivals compared to 2022 and consistently high spending per arrival. Healthy demand was reflected in strong hotel sales (+14% in the spring quarter in deflated terms compared to 2019), with urban areas leading the charge (+18%).
It is noteworthy that despite the slow recovery of road tourism and strong competition (from mature destinations such as Turkey but also emerging ones such as Albania), Greece manages to keep its share of the Mediterranean market intact (13% over the last 12 months). At the same time, the first signs from the start of this summer were positive, showing a slight superiority of Greece against competing destinations in flights and a relatively high preference from independent tourists.
Overall, the momentum of spring, the first positive signs from summer bookings and the improvement in consumer confidence in our main markets have set the stage for a new record arrivals in 2023 for Greek tourism. However, at this point it is important to underline that extreme heat conditions and widespread fires create conditions of uncertainty. Indicatively, the most heavily affected Rhodes, in addition to the pressures on the local economy and the environmental disaster, could remove up to 1 percentage point from the total tourist arrivals in Greece, due to its high weight at the national level (16% of overnight stays by foreigners ), according to a first estimate with greater uncertainty than usual.
Despite this pressure, the prevailing momentum and the excellent image of hospitality (with the inhabitants of the affected areas being the protagonists) have preserved Greece’s reputation and at the same time keep high the probability that this year’s arrivals will exceed the highs of 2019 (by about 5 percentage points) . Given this and taking into account inflationary pressure (with the effect of increased prices offsetting the length of stay restriction), 2023 tourism receipts could approach €21bn.
At a more structural level, the Bank highlights the importance of new trends related to the effects of climate change and tourists’ preferences in the post-pandemic period for less saturated destinations. In practice, these changes seem to gradually lead to a rearrangement of the tourist map, with a reduction in seasonality and the emergence of new tourist destinations. Related signs are already evident from this year, where the destinations and months that will stand out with their momentum may not be the “usual suspects”.
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