Weak Spending, Last Minute Bookings Take Toll on Greek Tourism

Last-minute reservations and decreased spending combined with an onslaught of taxes are cited by the Greek Tourism Confederation (SETE) as the reason behind declining revenues from tourism this year.

Representing more than 50,000 tourism-related businesses in Greece, SETE said in its October bulletin that reduced prices due to Greece’s late inclusion in package deals as a result of the refugee crisis combined with overtaxation have created stifling economic conditions for both business and investment.

According to SETE, average spending at major Mediterranean destinations including Spain, Italy, Croatia and Cyprus, through to July 2016 dropped by 3-4 percent. At the same time, however, with the exception of Greece, increased arrivals in other destinations offset reduced spending.

In short, arrivals for August grew by 1.8 percent while travel receipts dropped by 9.2 percent. For the first nine months of the year, arrivals increased by 1.3 percent and revenue decreased by 7.1 percent. Arrivals in September rose by 12.9 percent at regional airports and by 14.3 percent at Athens airport with road travel stronger by 14.4 percent year-on-year. Additionally, in August the total number of visitors to Greece exceeded the five million mark – almost 50 percent of the Greek population – demonstrating Greece’s position as a leading tourist destination.

According to SETE, Greek tourism can capitalize on its popularity and achieve 35 million arrivals and 20 billion euros in travel receipts in the next five years as long as tax disincentives to business are removed and a friendlier investment environment is created in order to attract investment in high quality accommodation enterprises in Athens and other destinations.

In the meantime, SETE slammed suggestions that tax fraud is particularly commonplace in tourism adding that the General Secretariat of Public Revenue has based its recent findings on chance samples and isolated cases and that wrong impressions were created.

To set the matter straight, SETE was quick to underline that despite the drop in tourism receipts, revenue from VAT for the peak months of July, August and September, was higher not only against last year’s figures but compared to the budget, which “is not consistent with the insinuations of increased tax evasion by tourism businesses”.

At the same time, SETE notes – citing the labor ministry’s Ergani data – that employment rates increased by 245,605 jobs in the first nine months of the year, the best performance since 2001.