No matter the result of the Greek referendum on Sunday, Spain and Portugal are already winning.
With headlines from Greece about capital controls and uncertainty over the country’s future in the euro area, tourists who still need to book their late summer and early autumn holidays are increasingly looking elsewhere, said travel agents. That will likely help extend growth in Spain and Portugal this year, industry officials said.
“We do see that the number of new bookings — so near to peak season — to Greece is falling,” Dick Gussen, a spokesman for Corendon International Travel BV, whose airline unit flies 2.5 million passengers per year, said by telephone. His company has already seen increased demand from families to Spain.
The detour is emblematic of the diverging fates of the Iberian economies and their Hellenic counterpart. While Spain and Portugal both also received bailouts in the fallout of the global financial crisis, they have already exited. On the other hand, the Greek government’s decision to hold a vote Sunday has brought its economy to the brink.
While foreign tourists to Greece are still able to access cash from ATMs, the images of unrest are likely to strike the locale off many people’s lists if they haven’t already booked.
“Tourism is a fragile industry — any bad news can lose you an entire holiday season,” said Juan Jose Riera, the president of the association of hoteliers in Ibiza and Formentera, Spain. If holidaymakers “sense danger or worry that they won’t be able to take money of out an ATM, they won’t go. No one wants trouble on holiday.”
For hoteliers like Fuerte Hoteles, additional customers would be an added bonus for an already robust year.
“We’ve seen a pick-up in visitor spending and the market is more vibrant,” said Martin Aleixandre, the sales director for the chain of six hotels on Spain’s Costa del Sol. While he had been expecting to register a booking rate of 90 percent for the May-September season, some months have come in at 95 percent and July will be key to see if he can top his target.
Tourism is big business for all three economies — accounting for 17 percent of Greece’s and about 10 percent in Spain and Portugal. In Spain, arrivals were up 5.1 percent through May this year, and overnight stays by non-residents in Portugal advanced 6.8 percent through April. At the same time, the Greek tourism association last month said a strong start of the year had been trailing off.
In Spain, tourism this year has been “extraordinary,” said Jose Manuel Soria, the minister for tourism and energy, on Monday. Portuguese colleagues echoed those sentiments and cited heightened security concerns following last week’s attacks in Tunisia as an additional driver of vistors to Portugal.
“There are those that argue that the misfortune of others is the fortune of others but Portugal’s tourism industry was doing well way before these problems emerged,” said Francisco Calheiros, the head of the Portuguese Tourism Confederation, adding that the country will also benefit from people seeking to avoid trouble in Greece.
Foreign investors have been investing in Portugal — InterContinental Hotels Group Plc opened hotels in Lisbon and the northern city of Oporto last year. It plans to open a third hotel with ocean views in the town of Estoril, about 20 miles west of Lisbon, later this year, it said in a statement in March.
Spain and Portugal are also likely to take in visitors that had been planning on a trip to Tunisia. After last week’s attacks on tourists on the beach there raised security threats, many tour operators are refunding visitors’ money and allowing them to rebook without charge.
“Today, security often comes before price and is crucial in the choice of a tourist destination,” said Calheiros.
This article was written by Henrique Almeida, Maria Tadeo and Elco Van Groningen from Bloomberg and was legally licensed through the NewsCred publisher network.