Warning Signs for Greek Tourism: Taxes Driving Away Visitors

Αssociated Press

FILE - Tourists from Taiwan take photographs with the closed Acropolis ancient site in the background in Athens. (AP Photo/Thanassis Stavrakis)

ATHENS - Expecting yet another record tourism season, Greece’s hopes for big numbers of visitors and revenues are slipping after a Hellenic Chamber of Hotels survey showed some 40 percent of members expect occupancy rates to fall up to 16 percent.

Another 10 percent said they’ll have to cut rates up to 13 percent, difficult to do after the ruling Radical Left SYRIZA imposed an avalanche of tax hikes and an overnight stay tax making the country less competitive with nearby rivals such as Turkey.

Greek hotel owners, said Kathimerini, are anxious about an economic slowdown in some European Union countries and the effect of the United Kingdom’s scheduled departure from the bloc in October, making many British visitors wary of traveling.

“The findings of the survey clearly validate the warnings we have long issued,” said the chamber’s head Alexandros Vassilikos. This pressure on demand is seen after five consecutive record years for Greek tourism, in terms of both arrivals and revenues.

If the numbers slack off this year, particularly in the high summer season, it could pose big trouble for the next Greek government, with the major opposition New Democracy favored to win July 7 snap elections.

That’s because tourism revenues make up some 18 percent of the country’s Gross Domestic Product (GDP) of 177.73 billion euros ($200.3 billion,) a total little more than half of the 326 billion euros ($367.4 billion) successive governments received in three bailouts.

Falling tourism revenues would coincide with a loss in the budget from handouts given by Prime Minister Alexis Tsipras in the form of pension bonuses and tax cuts in a bid to win back favor after plummeting in polls for reneging on anti-austerity promises.