NIKITI, Greece—Unlike the hot political climate ahead of elections on June 17, tourism in Greece is expected to be decidedly cool this season.
Operators are pinning their hopes on discounted hotel rates and Greece’s famed vistas to mitigate some of the gloom and doom, but the climate of economic and political uncertainty, plus deep tension between Greece and Germany (where the bulk of tourists come from), does not bode well.
Tourism is a strategic industry for Greece, accounting for nearly one-fifth of the country’s gross domestic product and employing about a quarter of the of the Mediterranean nation’s workforce. In 2011, revenue from tourism grew by 10 percent as Greece reaped the benefits of tourist diversions away from Arab Spring countries.
This year, no such miracle is expected.
“I have very low expectations for the tourist season this year and for Greece as a whole,” said Julie Gounaris, the British owner of a small beachfront hotel in Nikiti village, on the Halkidiki Peninsula. “Most tourists here are Germans, and the drop began last year, so this year I expect almost no one.”
Germans have told her that they’re afraid of being attacked if they come because of Greek resentment toward them.
Germany has developed a bad reputation here in recent months, being seen as the central power behind the stringent terms of the Greek bailout deal. Last month, after Greek politicians failed to form a government, thus triggering a second election, German Chancellor Angela Merkel reminded Greece that it must honor the commitments it agreed to under the package.
From Gounaris, what’s at the heart of the problem behind the staggering national debt—which amounts to about 160 percent of Greece’s GDP—is that Greeks don’t pay their taxes and abuse the social welfare system.
A notable example was revealed in April on the Ionian Island of Zakynthos where about 650 people, or roughly 2 percent of the population of 35,000, declared themselves blind to claim social benefits—including the mayor. Gounaris said most of the “invalids” were relatives or friends of government officials.
“So I start wondering: Is it worth paying my taxes? Where does my money go?”
Still, looking around the resort areas of northern Greece, at the freshly renovated roofs, and houses adorned with stylishly cut flowers and bushes, and noticing those same homeowners spending their days sitting in taverns drinking ouzo and playing cards, it’s hard to believe there is a crisis.
Gounaris says in Nikiti many people have businesses producing olives or honey, or they’re engaged in fishing or tourism. So they have money saved and still aren’t worried about any looming crisis.
“People who have money, continue to live as usual. The five-star hotels near Nikiti are full of tourists,” says Rosica Minkova, a Bulgarian waitress in Nikiti.
Yet there are signs the crisis has arrived. Christina Nikolova, 24, a bartender at Elia Beach a dozen miles south of Nikiti, says there are no jobs in Greece’s second largest city, Thessaloniki, so she moved here for the summer.
The student complained that this year employers in the tourist sector decreased the daily wage from $37 to $31, and some hoteliers have started employing students at $436 per month, with few providing social insurance.
The entrepreneurs themselves are under daily stress. “Hoteliers fear every day that they may wake up with their taxes increased,” said Nikolova.
Last September, the VAT for tourist meals was raised from 13 percent to 23 percent, while at the same time prices were driven down because of the crisis.
Extreme Moods
While the north remains quiet and life goes on as usual, down the capital, Athens is being torn apart by protests and every political conversation sparks tension—making it less than appealing as a travel destination.
“If I were a German, I would avoid coming to Greece,” say Dimitris Tsotsos, a chemical environmental engineer from Athens.
“For sure, Germans have nothing to fear in Greece. But if you go for a vacation, you want to feel relaxed and welcome. And if you are a German, and you see that the Greeks treat you as a Nazi, you will not like it.”
In February, after a new austerity deal was passed, the Greek daily Dimokratia, ran a front-page photo of Merkel photoshopped into a Nazi uniform.
Tsotsos says Greeks have turned Germans into a kind of enemy, seeing Germany as the driver behind the campaign to impose harsh austerity measures on Greece.
“Which is wrong. All the countries in the eurozone contributed to this decision,” says Tsotsos.
One theory circulating among Greeks is that their country is the victim of a master plan by the big European forces that are lending money in order to gain control over the country.
“They use us a guinea pig. If they see that it works with Greece, they will implement this model on other European countries,” said a landscape architect from Nikiti, who preferred to remain anonymous.
Bitter Medicine
Dimitris Tsotsos doesn’t buy the argument. He says it’s a common Greek habit to look for an outside enemy and that he’s not comfortable with the current extreme mood in the country. People are very negative, he says, since so many have lost their jobs.
“People don’t understand that they have to choose between bitter medicine and catastrophe. So they think that the bitter medicine is the problem, but it’s not,” says Tsotsos.
The problem is not the austerity measures; Greece’s poor economic state was the problem and the austerity measures are the fix.
Greece’s crisis came to a head in 2009, when the government, faced with a nearly $400 billion debt, went to its European counterparts asking for help. Eurozone leaders prescribed stern budget cuts and a series of bailout packages lasting up to 2015 when the debt would be cleared.
The elections later this month are being seen as a referendum on the plan. A vote for New Democracy, one of the parties that negotiated the deal, is a vote for austerity; a vote for Syriza, the radical left, is a vote for a moratorium on servicing the debt. Some experts speculate that Greece may exit the eurozone, an outcome not favored by most Greeks.
Too Late
Many tourist centers in Greece are lowering their prices in the hopes of attracting the tourists back, but few expect it will do much to save the season.
According to the Business Traveller website, Greek hotels are charging their lowest prices in a decade. A night in a four-star in Athens city-center, for example, can be found for $124, compared to $180 in 2004.
The Panhellenic Hoteliers Association announced that bookings since the May 6 elections have declined dramatically and if the trend continues it could lead to the loss of 2 million arrivals this year.
For locals, although some prices are going down, they are not dropping in step with their salaries. Salaries were cut an average of 30 percent, while prices have only gone down by 10 percent.
The austerity measures have made Greeks very negative and cautious.
“For tourists it is good, but let’s see if they will come. Because for them it is not only a matter of prices but also of stability,” said Tsotsos.
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