Tourism is the ‘Heavy Industry’ of Greece, Revised Study Confirms

Tourism’s importance to the Greek economy is confirmed through 2014 figures released in a revised study on Friday by SETE Intelligence (InSETE), the research department of the Greek Tourism Confederation.

According to the final figures, last year the tourism sector directly contributed 17 billion euros, or 9.5 percent of Greece’s total GDP, while its direct and indirect contribution to the economy stood at around 20 to 25 percent of GDP.

“This confirms that tourism is the country’s ‘heavy industry'”, InSETE noted.

According to the study, tourism in 2014 showed growth of 11 percent or 1.7 billion euros (a rise from 15.3 billion euros of direct contribution to GDP in 2013 to 17 billion euros in 2014) when the total GDP is estimated to have decreased by 3.4 billion euros in nominal terms and increased by 0.8 percent in real terms due to deflation.

Referring to the indirect benefits of the sector, the study revealed that each 1 euro of tourism activity generates 1.2 to 1.65 euros of additional economic activity. As a result, for each 1 euro of tourism revenue, the country’s GDP increases by 2.2 to 2.65 euros.

InSETE also underlined in the study that the tourism sector directly contributes some 50 percent of the GDP of the island regions of Crete, South Aegean and Ionian. “These regions are among those with the highest per capita GDP in the country, supporting the view that tourism leads to improved living standards of the areas in which it develops,” InSETE noted.

With regards to tourism’s contribution to employment, during peak season and including jobs in the food industry, it was responsible for one in three paid employment positions in the private sector.

Furthermore, InSETE highlighted the importance of addressing seasonality, the sector’s “biggest weakness”, since some 60 percent of arrivals and revenue take place in the third quarter while the number of arrivals and revenue in the first quarter consists of only 6 percent and 3 percent respectively.

InSETE added that seasonality can be addressed only by enriching the country’s “Sun and Sea” product and not by fighting it, as it is the biggest “tourist product” across Europe.