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Greece: Holiday spending increases

The widely expected record revenue from tourism seems to be borne out so far, by the significant per trip spending by foreign arrivals, as well as the raw arrival numbers, which are outpacing those of the record-breaking year 2019, before the outbreak of the Covid pandemic.

Tourist revenue from foreign travelers during that record year reached €18.2 billion. Government officials, as well as sector professionals, are venturing that they could reach almost €20 billion.

This estimate is based on several facts. Spending per traveler per trip is about 9% higher. Also, in June, arrivals at Greece’s 14 largest regional airports were 4.6% higher than in June 2019. While data from July are still being processed, arrivals appear to have been almost 10% higher than during 2019.

August is also seeing unprecedented levels of arrivals and bookings for September are strong. But the rise in spending and bookings seems to be concentrated in 4- and 5-star hotels and resorts, as well as short-term rentals; lower-rated hotels and other facilities appear not to be sharing in the bonanza.

Sector professionals and analysts explain that this is a result of a structural shift in the quality of international arrivals that was evident even before the pandemic. This creates the conditions for hoteliers to raise their charges, since they now deal with higher-income clients. And raising the charges is also the sensible option, as costs have risen significantly in the new inflationary climate.

At the same time, travelers of more modest means, including many Greeks, are hunting for more competitive prices in less developed destinations.

This trend irks many Greeks, but could potentially extend the benefits of tourism to other regions beyond the usual glamorous destinations. At present, the southern Aegean Islands and Crete are taking the lion’s share of tourist revenue.

Spreading the wealth will require significant infrastructure upgrades across the country, to make destinations attractive to high-income clients.

In this environment, the interest for the acquisition of hotels remains high. This week, Lampsa Hotels sold its Sheraton Rhodes resort to a Spanish fund. And more deals are on the way.