The coronavirus outbreak is already leveling serious repercussions on Greece’s tourism industry. Industry businesses are facing dwindling revenue, which in turn threatens of jobs. A report from the Center of Planning & Economic Research (KEPE) tells of a slowdown in growth by 0.9 percent this year in the aftermath of Covid-19.
KEPE analysts say, 1 billion euros in international travel revenue losses is estimated at leading to an overall (direct and indirect) decline in the GDP of the economy by approximately 1.076 billion euros; a reduction in employment by about 26,403 people; a drop in the goods and services balance by 675.52 million euros, of which over 2/3 are due to losses posted in accommodation and catering services.
Tourism accounts for around a fifth of Greece’s economy and more than a quarter of jobs, according to the London-based World Travel and Tourism Council. Greece is the European Union’s second-most exposed country to the sector after Cyprus, which experts say is a clear signal of more pain ahead for Greeks reeling from years of hardship. This paragraph from and open letter to governments from WTTC speaks volumes for the overall situation:
“No one can doubt that we are in uncharted territory. The coronavirus pandemic means the world is facing a threat on multiple fronts not seen in peacetime. The Travel & Tourism sector is uniquely exposed, and we estimate 50 million jobs globally are at risk. To put it bluntly, Travel & Tourism is in a fight for survival.”
Current economic data for Greece, shows that for every 1 billion euros in international travel revenue losses, the country’s GDP is set to suffer a total (direct and indirect) decline by about 0.57 percent, a decrease in employment by about 0.61 percent, an increased deficit in the goods and services balance by about 38.9 percent.
Here in Crete, hotels are in trouble already. Last year Greece hotels generated revenue of 8.7 billion euros ($9.8 billion), which was a rise of more than 7% compared with 2018. Tourists from other countries spent 18.2 billion euros. But, the problem for Greece (and Crete) businesses were the profit margins. Now, COVID-19 will cut overall profits to the bone for most providers.
KEPE did underline, that it is still too early to assess the full repercussions of the coronavirus outbreak on travel receipts. Based on the 2003 SARS case, KEPE projected 8 percent decline in international travel revenue, the economy is set to see a slowdown in growth by 0.83 percent, the loss of some 38,284 jobs, and a 56.4 percent increase in the deficit in the goods and services balance.