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Greek ferry trips to cost more

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Greek island hopping for holidaymakers in Greece just got more expensive thanks to a sharp rise in VAT imposed by the cash-hungry Greek government.

The price of ferry tickets in Greece has jumped 10% overnight after the Greek government raised VAT rates on many good and services from 13% to 23%.

Greek holiday passengers booking a ferry from the Athens' port of Piraeus to the island of Paros in the Cyclades, for instance, will now pay €36.50 instead of the €33.50 price before the VAT hike.

Many holidaymakers prefer ferry hopping around the Greek islands to booking the usual package tour trips.

Regular ferry sailings, plenty of overnight accommodation, a choice of local tavernas and the freedom to roam hold great appeal on a Greek island holidays.

Although room and food prices have remained relatively low, the price of ferry tickets in Greece has been a problem, even before the VAT hike.

Ferry ticket prices have included extra charges for port fees plus a 3% surcharge towards financing routes to remote destinations. The latest VAT hike will make many routes much more expensive.

Ferry tickets from Athens to Chania, on Crete, for a family of four, for example, will cost and extra €36 as the price goes up fro €297 to €313 after the VAT increase.

Ferry companies are forecasting a drop in passenger numbers of 20-30% as a direct result of the rise in fares this year and expect to carry up to three million fewer passengers.

According to the Greek Foundation for Economic and Industrial Research) tourism accounted for 65%of ferry passengers traffic in 2014 with 8.7 million choosing the island hopping option on their holidays in Greece with 5.2 million Greek holidaymakers catching the ferry and 3.4 million passengers from abroad.

But holiday visitors to the Greek islands can expect to see even more price rises next year. The Greek government has voted to end the special low VAT rates on the islands, originally intended to offset the cost of importing goods

Many islands enjoyed a 30% discount on VAT for goods and services which have helped promote the islands as a cheap summer holiday destination.

The low VAT rates will end in July next year when islands must pay the full VAT rates although more remote islands will enjoy the tax discount until January 2017.

The move has been widely condemned by many in the tourism industry who warn that the numbers of holiday visitors will suffer and that Greece will lose out on vital overseas revenue.

Greece was hoping to attract a record 25 million holiday visitors this year with the prospect of cheap holidays but the recent poor publicity over the country's finances coupled with the latest price rises will make meeting that target a major challenge.

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