Travel media is echoing the Greek Tourism Ministry’s visitor numbers surge, and revenue growth derived from Visa. However, what does the highlight on cashless payments indicate?
According to Visa’s “Mediterranean Tourism Analysis,” visitor spending in Greece climbed by 14% from October 2023 to September 2024 compared to the previous year. However, these numbers are highly deceptive. While traffic through airports and inbound tourism did increase, the real numbers tell a different story regarding the benefit to Greeks.
Is Tourist Spending Up in Greece?
The Visa numbers are supposedly derived from Visa card transactions at real stores in Greece, which were, in turn, shared with the Greek Ministry of Tourism. Today, as we examine the headlines, virtually every media outlet is reporting how well the Greeks are doing this year. Even INSETE, the research arm of the Greek Tourism Confederation (SETE), sent the news out to Greek Travel Pages and hundreds of other outlets. The “spin” by INSETE, in particular, was a per capita comparison with Spain. The GTP report here reveals the slicing and dicing of numbers to make things appear rosy. Was tourist spending up this year? The answer is, of course, yes and no.
Turning the page, we find numbers from the Bank of Greece that conflict with what Visa and the Greek Tourism Ministry are attempting to sell to the public. According to those figures, the average spending per trip saw a decline of 5.7%, dropping from €618.9 to €583.9. This revenue was on about 18 million international visitors to Greece from January to July 2024. The numbers also revealed that receipts from key eurozone markets such as Germany, France, Italy, and the United States declined. Interestingly, traffic through airports grew by some 12%, which brings us to the obvious question.
Whose Revenue Grew?
The INSETE reports go so far as to accuse Spain of measuring tourist apples to tourist oranges while applauding all things Greek Tourism Ministry methodology. What needs to be reported reveals the real situation for the most critical industry in Greece. A section of a report from OT below shows the stunning difference in accounting practices.
“The latest figures from the Bank of Greece show that the country is witnessing an influx of international tourists, but these visitors are spending less during their stays. While overall tourism revenue is increasing, this growth is due to the higher number of arrivals rather than increased spending, as the average expenditure per tourist has noticeably declined.”
So, with many more tourists arriving, the categorization of their spending needs to be revised. Take this CEIC Data from ISI Emerging Markets Group Company that shows retail sales from tourism dropping almost 5% compared to the same time in 2023. These figures are for total retail sales. However, suppose SETE is correct (PDF) in assuming tourism spend ends up representing almost 50% of Greece’s employment (direct plus indirect). In that case, it’s certain retailers and workers are not receiving their cut. of the increase in tourists. Let’s look at a couple of instances.
Take Heraklion, Crete hospitality workers and the recent collective bargaining agreement in which most workers were promised a 5% increase in wages. Let’s add the fact that inflation in Greece in 2024 will be close to 3%. Taking this aspect a step further, if Core consumer prices in Greece increase by 4% in 2024, how much does that 5% pay raise help locals? So, if the retailers in the pedestrian zones of cities like Heraklion or hotel, bar, and restaurant workers aren’t, then who is?
Most reading this already know the answer, but this press release from Tornos News shows Athens International Airport recording a 9.8% revenue hike during Q1-Q3 2024 (all revenue streams). Aegean Airlines recorded a 4% revenue increase for the same period. The German company TUI has forecasted annual profit growth to be at least 25% this year. And Greece was TUI’s top destination this summer. Now let’s briefly discuss the impact of the record number of cruise ships Greece’s Tourism bosses have attracted over the past few years.
A Greek Tourism Fish Bowl
According to one recent study, as many as 40% of cruise passengers do not even leave the ship while in ports of call. The average spending ashore for those who do is a meagre 23 euros. Meanwhile, the cruise industry advertises the billions it will contribute to Greece and that the average passenger contributes 100 dollars per day to local economies. Cruise passengers, like many of their airborn colleagues, are visiting the country as the would a big aquarium or museum. They come, gawk, pass on by, and seldom even eat at the local tavernas. The ship’s luncheon buffet, and the all-inclusive hotel’s breakfast bar are free, right?
The bottom line is that the increase in travel receipts was due to a 20.6% increase in travel traffic. Conversely, there was at least a 3.6% decrease in average spend per trip (Bank of Greece). Now, given the fact that the Ministry of Tourism’s glowing revenue report originated at Visa, another critical question arises. How much of that retail or other spend was credit, and how much was debit card expenditures by travelers. The answer seems clear, given that disposable income is down in every European country and fewer people are budgeting vacations. And with the average credit card interest rate at 20.37% EURICA! We found another big winner in the Greece travel sweepstakes. In the Instagram share from the Plaka neighborhood of Athens, how many of these people are dining on credit?
The Takeaway
Finally, consider all those hospitality workers getting a measly 5% pay hike for 2024. The fact that hoteliers are the big winners in Greece’s tourism revenue game is a sore spot. According to Money Tourism, Greek hotels saw an astounding 29% increase in Revenue Per Available Room (RevPAR) in 2024 compared to 2023. The trend for Greece hotels is a straight line upward. Even in 2023, Athens hotels experienced double digits when comparing 2023 to a decade ago (2013). Get this, the average value of Athenian hotels (PDF) increased by 11.2% in 2023 compared to 2022 and by 6.2% compared to 2013.
As for all this tourism positively affecting communities, the NBG study showed that the number of specialized and highly-trained hotel staff for the summer period is low for large hotels and smaller accommodations. The demand, of course, is rising because of two factors, low wages and more hotels opening. 80% of the industry is reporting staff vacancies equal to or greater than in 2023. Looking at the extraordinary cruise bonanza the Greek government created, cruise companies and cruise ships negatively impact communities through air and water pollution, economic leakage and tax avoidance, and other ill effects of hypertourism. This report on the cruise industry for America’s Northwest is a horror story for locals, and Greece’s surging tourism is already a mirror horror story on a planetary scale.
I want to point out another of the biggest winners in Greece’s surging tourism. Sebastian Ebel, the CEO of TUI, reported recently that in 2024, his company had boosted earnings by a whopping 33% to €1.3 billion. So, juggling numbers cannot hide the fact that the corporates and large resort owners are the big winners, and not the retail shop left running after COVID closed so many. Be careful who you get your data and info
