A combination of global tourism growth and regional conflict is driving tourists to Greece in unprecedented numbers, enough so that the country is hoping that industry alone can pull it out of recession.
Greek tourism revenues should rise 13 percent to a record 13 billion euros in 2014, the head of the main industry body said on Tuesday, boosting chances the country will finally emerge from its deep recession next year.
Tourism is the biggest cash earner for Greece’s economy, accounting for about 17 percent of its 185 billion-euro economic output. It employs one in five Greeks.
Andreas Andreadis, the head of Greece’s SETE tourism body said in an interview with Reuters that a 10 percent rise in summer pre-bookings from Britain, Greece’s top tourist market along with Germany, was pointed to the increase in arrivals.
The country is also seeing greater numbers of visitors from Eastern Europe and Russia.
“Our initial estimate for 2014 is that we will have more than 18 million arrivals, an all-time record, and a record in revenues, seen at 13 billion euros,” Andreadis said.
Greek hoteliers, restaurant owners and tourism businesses have slashed prices and upgraded their services to lure visitors amid the country’s debilitating debt crisis.
Fewer anti-austerity protests have also helped Greece’s image while Egypt and Turkey – countries that traditionally compete with Greece in tourism – have faced turmoil or riots that have dampened their appeal with visitors.
“For the first time in years, Greece is gaining market share against its main competitors,” Andreadis said, adding the country was on track to meet this year’s target for 11.5 billion euros in tourism revenues and 17 million arrivals.
“For all this to happen, Greece needs to maintain this image of stability and show that it is determined and focused on its main targets. This is key,” he said.
Data released separately on Tuesday showed strong spending by foreign visitors helped Greece post a wider current account surplus in September, pushing the cumulative current account balance for the first nine months of the year to a surplus for the first time since Greece joined the euro in 2002.
With domestic demand, investment and industrial output reeling under budget cuts, spending by foreign visitors is becoming the only growth driver for an economy in its sixth year of recession.
Greece’s economy is projected to shrink 4 percent this year and return to very low growth next year. It also expects to post a small primary budget surplus this year, excluding debt servicing outlays, which will allow it to ask for further debt relief from its international lenders.
Tourism receipts rose 17.3 percent year-on-year to 2.07 billion euros in September, generating a current account surplus of 964 million euros, up from 895 million euros in the same month a year ago, the central bank said.
Greece’s annual current account gap ballooned to 15 percent of gross domestic product in 2008, but has been improving thanks to a fall in imports.
The International Monetary Fund, which alongside the European Union has bailed out Greece twice since 2010, expects the gap to shrink to 0.8 percent of GDP this year.
Greece’s government is more optimistic, saying the current account may be balanced this year for the first time since Greece entered the euro zone.
Additional reporting by George Georgiopoulos. Editing by Jeremy Gaunt.
Copyright (2013) Thomson Reuters. Click for restrictions.
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Photo credit: Tourists enjoy the hot weather at Vari beach, southeast of Athens. Yannis Behrakis / Reuters