Greek tourism is, at best, stagnating right now. The sector managed not to attract even a slither of the flows that turned away from Turkey during 2016. But what is the reason for the stagnation this past year and a half?
|source: Bank of Greece, own calculations|
I had written in the past about the subject and for what is worth I still think that the answer to the question posed above lies there. Perhaps the chart below will convince you as well.
|source: Bank of Greece, Eurostat, own calculations|
The inverse relationship between prices charged by the tourism sector and travel exports is more or less obvious I think, so here we have the reason that travel exports' growth slowed to a halt. Price hikes.
Another factor that one has to take into account here is tax evasion (something the sector is notorious for) but isn't this, indirectly, again due to the factor called price hikes? I, for one, say it is.
This year we keep hearing that things will pick up and that, earnings-wise, the tourist season will be phenomenal. Given that prices charged by the sector, at least for the time being, show no sign of reversing or pausing I am a bit sceptical. Of course in April travel exports grew by about 11% YoY, so let's hope that I'll be proven wrong and that this will indeed be a hell of a season for Greek tourism. (the planned increase in tax inspections from authorities might just make it appear a bit better even if it actually isn't) The country needs it badly in any case.