Coronavirus tourism loss for Greece forecast at 70% during 2020

ATHENS – Greece’s biggest revenue engine, tourism, is on a course to take a 70 percent hit in 2020 from the fallout of the COVID-19 Coronavirus that has severely restricted, if not stopped, for now, international and even domestic air travel.

Tourism makes up as much as 18 percent of the country’s annual Gross Domestic Product (GDP) of 181.51 billion euros ($200.3 billion,) bringing in critical revenues and Greece is facing strong challenges from rival tourism countries.

In 2019, tourism brought in a record 18.179 billion euros ($19.89 billion) but 4.7 billion euros ($5.24 billion) for the second quarter is lost and an annual fall of 70 percent could mean the year’s drop-off would be 12.73 billion euros ($13.92 billion.)

That’s irrecoverable for this year as even if hotels and other tourist sectors gradually reopen early in the summer it’s likely too late as international travelers make plans often months in advance and many are seen fearful of going abroad this year at all.

Greece will lose the key markets of Germany, France, Italy, the United Kingdom, and the United States as travel restrictions within the country are seen staying in place until mid-June or early July, making the summer an almost certain wipe-out.

That could have a dramatic ripple effect on the rest of the economy and any potential recovery just as a rebound from a near decade-long crisis worsened by austerity was underway, now off the table.

A study by the Institute of the Greek Tourism Confederation (NSETE) presented the grim conclusion of a near-eclipse of the industry, said Kathimerini of the report entitled The COVID-19 Pandemic and Greek Tourism.

It projected plunging revenue losses in 2020. “It also remains uncertain when the emergency measures in Greece and its markets will end, and at what rate the markets will recover,” it said, suggesting a recovery would be long and difficult.

That could bring back the nightmare austerity years scenario as other government figures show job losses as high as another 500,000, bringing 22 percent unemployment in a worst-case scenario and the inability to fund services especially with massive amounts of money being poured into health care now.

THE BIG DENT

If spending is reduced by 60 percent for the second half of the year, per the conservative estimates cited by INSETE, instead of 12.9 billion euros ($14.11 billion,) tourism will bring in only 5.1 billion euros ($5.58 billion,) for a total of 5.65 billion euros ($6.18 billion) this year, less than a third of the previous record year.

The INSETE study further pointed out that recovery in revenues is usually slower than of arrivals and at least a year’s delay in recovery, meaning the effects of the COVID-19 pandemic economically would go into the summer of 2021.

INSETE Director-General Ilias Kikilias told the newspaper that, “In the decade of the financial crisis, tourism – with a total of 260 million visitors and 143 billion euros ($156.42 billion) of revenues from abroad, emerged as probably the most important pillar of our economy and employment. With COVID-19, tourism also emerged as one of the first sectors damaged, and at great speed and intensity.”

He said, “The rebound will take quite some time and will be implemented in the context of new normality. Our challenge is for the experience of the few visitors at first to become a deposit for the future.”

In January, Tourism Minister Harry Theocharis – before news broke about the breakout of the then-called Coronavirus in China that spread around the globe – said Greece was counting on another big bump in tourism for 2020 after forging ahead with plans to make the country a year-round destination and not just a summer fun play place.

That’s now as old as Ancient Greek History.

Tourism employs about 20 percent of the workforce of about 4.32 million people, with some 1.08 million people working in the sector that has enjoyed a string of record seasons that was a critical buffer for the economic and austerity crisis.

The industry is expected to suffer a critical blow with airlines cutting back flights around the world and people concentrating on surviving, not travel and bookings for hotels and short-term rentals through platforms such as Airbnb have fallen as much as 70 percent.

“Just as Greeks are emerging from a decade-long crisis that cost the country a quarter of its output, the impact of the coronavirus on the vital tourism sector threatens to deprive them of the fruits of recovery,” the financial news agency Bloomberg reported in March.