Greek tourism and seasonality

There is currently a lot of talk in Greece regarding tourism, not proposals to enhance the sector and the like mind you, just talk about how it will help the country exit the depression we are currently locked in.

Truth is that thus far, or at least as far as data cover, inbound tourism has performed very well. If one looks at travel services exports data he/she can find out that cumulatively, until July, this is the second best performance for the sector since 2003 that Bank of Greece data run.

source: Bank of Greece, own calculations

Of course, a good question is how big a drag will domestic tourism be for the sector but unfortunately there are not adequate data for that. So let us wait for actual data before we pop open the champagnes. Besides, in a country such as Greece at present where the political climate is so explosive nobody knows what is around the corner.

But my aim when writing this post was not to assess the sector’s current performance but to briefly talk about a structural issue for the sector, seasonality.

Greek tourism is extremely seasonal. In the next chart I have denoted January travel services exports as a 100 and plotted each year’s exports trajectory for the 2003 – 2013 span.

source: Bank of Greece, own calculations

Each year’s peak ranges from 11 to 19 times January’s revenues. Could this be any other way?

 Let’s have a look at how travel services exports are spread around the year for Spain.

source: INE, own calculations

Each year’s peak is about 2 – 2,3 times January’s travel exports. In the next chart I plotted the average exports level for each month of the year for the two countries.

source: Bank of Greece, INE, own calculations

The seasonality differential sure is striking. What if the Greek tourism sector tried to prolong the tourist season? Greece’s climate is not (any) different from Spain’s. I’m sure that this is more easily said than done or else it would already have happened and that someone looking hurriedly at data does not discover the moon instantaneously. But surely if Spain did it then we can at least do better than we currently do. If that could happen through new demand creation (maybe look at different market segments etc.) then some of the seasonal hires would be transformed into permanent ones and the country’s trade balance would get a much-needed boost, something essential for hiking living standards(maybe in a more sustainable manner this time). There sure is a lot of untapped potential in Greece; let's hope that somehow we will manage / decide to tap into it sometime soon.

P.S. Look at Nikan's comment.