Europe News

Greek vacation anyone? Tourism set to boom


Diplomatic relations between Athens and the rest of Europe may be at a low ebb, but there is one part of Greece that is clamoring for overseas visitors. And a plunging euro could make it the perfect place for a vacation this year.

Christina Kalogera, director of the Greek National Tourism Organization's U.K. and Ireland office, told CNBC that Greece was hopeful that 2015 would be a good year for the tourism industry, particularly with the euro weakening against the dollar and sterling.

"We are very optimistic that 2015 will be another successful year for Greek tourism as the hotel, restaurant, and bar scene is booming and we are seeing young entrepreneurs getting more actively involved with the tourism sector," Kalogera told CNBC Friday.

"There are new innovative products provided by hotels and multiple new restaurants and bars openings especially in Athens and Thessaloniki, so with the euro also at an 11-year low this is definitely the ideal time to visit Greece."

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Around 18 million international tourists arrived in Greece in 2013, according to the UN World Tourism Organization's 2014 report on "Tourism Highlights."

In addition to that data, the World Travel and Tourism Council (WTTC) 2014 report found that travel and tourism contributed 28.3 billion euros ($31.2 billion) to the Greek economy in 2013 (16.3 percent of gross domestic product). That was forecast to rise by 3.0 percent in 2014 and by 3.7 percent per year to 41.8 billion euros (19.1 percent of GDP) in 2024. The service sector as a whole accounts for about 40 percent of the country's GDP, according to the CIA's "World Factbook."

Further demonstrating how important the travel and tourism industry is to Greece, the WTTC said the total contribution of travel and tourism in terms of total employment in Greece was 18.2 percent, or 657,000 jobs. That's a significant amount in a country with a high unemployment rate of around 25 percent.

Hotel managers like Dorina Stathopoulou are also optimistic that 2015 could be a bumper year for the travel trade, with occupancy levels for summer already looking good.

"We're very busy, this is a booming period for us," Stathopoulou, hotel manager of three hotels in Athens, told CNBC. "This started last September, from on then we knew it would be a good year. For example, we have 92 percent occupancy for May, 80 percent already for June."

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"And if we're full, our neighboring hotels are full also. All hotels are experiencing better demand" she added, a factor that she put down to increased security issues in rival holiday destinations, such as northern Africa and Turkey, and the decline in the euro.

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"The fall in the euro has definitely had an effect," she added as the euro fell further towards a 12-year low against the dollar.

Political upheaval could certainly damage Greece's tourism industry, according to one report.

"We believe that over the short term, Greece's tourism industry will suffer from political uncertainty, as potential risks of domestic unrest deter visitors," a report from BMI Research published in February said.

"Moreover, the continued economic pressures and high unemployment will constrain domestic tourism and outbound tourist departures considerably. That said, should Greece exit the EU we would anticipate a surge in tourism numbers as the probable return to the drachma would make holidays in Greece attractively cheap," BMI said.

Political uncertainly and economic upheaval have not helped to promote the country as a tourism destination, however, with a dramatic change of leadership in January from a pro-austerity government to an anti-austerity one and fraught negotiations over its financial bailout. If the talks fail and Greece fails to pay its way, one possible – and feared – outcome could be the country being forced out of the euro zone and into adopting its own currency.

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Hotel managers like Stathopoulou were worried. "Personally, I do worry about the bailout…I also think that if we were not part of the euro zone we would have greater instability, even though long-term maybe (returning to former currency) the drachma would help tourism."

She was emphatic that tourism could help the Greek economy to recover, however, saying "this is our number one industry. We are desperate (for business)."

"Last year, we employed 15 more people. There are lots of people reliant on tourism, from hotel staff and barmen to cleaners and taxi drivers. It's a very important industry for us," she said.

By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld