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Viewing report
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Greece Tourism Report Q4 2011
Business Monitor International, Sep 2011, Pages: 65
Tourism Overview This year is likely to witness a reasonable recovery in foreign tourism to Greece, after poor outturns in the previous three years. According to the Association of Greek Tourism Enterprises (SETE), foreign tourist arrivals increased by just under 10% year-on-year (y-o-y) in January-July 2011. There was also relatively favourable growth in foreign arrivals at many airports throughout the country. The strongest growth in foreign visitors was recorded on the island of Rhodes, up by 28% y-o-y, followed by the island of Kos (26%). Solid growth was also recorded in arrivals to Heraklion, Hania and Thessaloniki. The Bank of Greece reported that tourist receipts also rose favourably, up by 12.6% y-o-y, in H111. Flexible pricing policies in the hospitality sector, especially the reduction of VAT on accommodation for foreign tourists, are likely to have contributed to the good performance of the sector. Political unrest in North Africa, which has shifted tourism demand, is also likely to have given a boost to Greek tourism.
Source Markets According to the Hellenic Statistical Authority (ELSTAT), there was a 13% y-o-y increase in nonresident arrivals to Greece in Q111, although arrivals from the EU rose by just 1% compared with the same period in 2010. From two key source markets, the UK and Germany, there were sharply divergent growth rates, with arrivals from Germany down by about 20% y-o-y, but up by over 30% from the UK. Visitors from Europe as a whole increased by 9% y-o-y, while there was buoyant growth in arrivals from the Americas and Asia, up by 36% and 42% y-o-y respectively.
Forecast Scenario: BMI expect a slightly better recovery scenario for this year than previously, with annual growth in foreign arrivals of nearly 6%. A modest slowdown in growth is forecast in 2012, however. Despite the recovery, domestic tourism is expected to remain extremely weak over the short term. In the eurozone, an important source market, our revised forecasts are for economic growth of 2.1% in 2011 (raised slightly this quarter), with growth expected to slow to 1.8% next year. For the UK, the key market for inbound tourism, our revised economic growth forecasts are 1.4% and 2.2% in 2011 and 2012 respectively.
German economic growth is forecast to slow from 3.5% this year to 2.0% in 2012. Possible VAT increases for foreign tourists in the hospitality sector could be particularly damaging for Greek tourism, while the sector will be hit by concern about ongoing public and private sector strikes.
Aegean Airlines Greek carrier Aegean Airlines’ financial results for H111 show that revenue totalled EUR295mn (US$426mn), up by 10% y-o-y. The company reported a net loss of EUR19.8mn (US$28.6mn), reflecting an improvement on a loss of EUR32.6mn (US$39.7mn) in H110. Due to a marked economic slowdown in Greece, Aegean Airlines was forced to reduce frequency on its domestic network but the airline expanded its international network to compensate, with additional destinations and frequency to important markets such as the UK, France, Italy, Spain, Russia and Israel. Total passenger numbers increased by 1% y-o-y to 2.9mn in H111. However, in the second quarter of the year, total passengers rose by 15% and international passengers were up by 29% compared with Q210.
Olympic Air Between July and September 2011, Greece’s Olympic Air started two new routes: Thessaloniki- Mykonos and Thessaloniki-Skiathos. Both services fly three times a week.
Athens International Airport After poor passenger traffic figures at Athens International Airport in Q111, data for the first seven months of the year show improvement but growth remains in negative territory, with total traffic down by 6% y-o-y. International and domestic passenger numbers fell by 1% and 14% y-o-y respectively.
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