Bailout boost for Greek holidays
Andy Cornish: July 2015
Greek holidays are booming in the wake of the latest bailout agreement with a surge in late bookings for the school summer holiday break.
the Association of British Travel Agents (ABTA) report a large rise in late bookings to Greece as schools in the UK broke up for the holidays with thousands heading off to Greek island beaches.
Spain remains the top holiday destination for UK holidaymakers, but Greece and the Greek islands are close behind despite the recent poor publicity over its economic troubles.
"Many ABTA Members are reporting an increase in late bookings to Greece following the recent progress in securing a bailout, with customers taking advantage of some exceptional deals", said ABTA chief executive Mark Tanzer.
And holiday visitors to Greece will find their pounds stretching further despite the recent decision to raise VAT rates on goods and services across the country.
The British Pound continues to give a good exchange rate against the euro, hitting an eight-year high earlier this month, and holiday visitors to Greece are unlikely to feel the effects of any hike in VAT before October.
The turnaround follows a brief downturn in holiday booking to Greece as bailout talks dragged on and will come as a welcome relief to the Greek tourism industry which now accounts for nearly 20% of the country's trade.
And it comes as final figured have been released on holiday visitors in 2014 when Greece welcomes a record 24.5 million visitors.
Of the total of 24,482,630 visiting Greece in 2014, 13,929,193 arrived by plane, 9,103,546 by car and 1,449,891 by sea, according to the research unit of the Greek Tourism Confederation's (SETE).
Arrivals by air in 2014 rose by 17% on 2013, itself a record year. Regional airports that include the Greek Islands saw 11,360,618 pass through in 2014, an 11% rise on 2013, according to figures from the Civil Aviation Authority.
Tourists who chose to visit Greece by road came to 9,103,546 in 2014 against 6,237,067 in 2013 while arrivals via sea rose just 1% over the year.
Fears are now growing that the VAT rise will eventually take its toll on the tourism sector. The Greek government hopes to raise €160-170 million from the hotel sector, around € 200 million from axing special VAT discounts for the islands and &euro and 270 million from the food and drink industry sector as well as €100 million from the transport sector, which includes a VAT rise on ferry tickets to the islands.
With regard to holiday package deals already agreed by the hotel sector, the extra VAT will be calculated on a sliding scale from 5% to 30% on the total price of the package deal over the summer season.
Tourism industry leaders warn that taxing the country's main income stream could backfire as Greek holidays become less competitive against rival markets, but the government feels it ha little choice given the stringent terms of the latest Greek bailout.