ATHENS (Reuters) - Greek tourism industry groups said on Wednesday they see their revenues falling about 15 percent this year, dragging the country further into recession as a weak summer season hits a key driver of the economy.
The forecast, a bleak prospect for an economy where tourism accounts for one in five jobs and nearly a fifth of GDP, comes a day after the central bank announced a record 24.2 percent year-on-year drop in non-residents travel spending in May.
“Total income is seen falling by about 15 percent in 2009, while Greek hotels ... will see a nearly 20 percent drop in revenues this year,” said Andreas Andreadis, head of the Hellenic Hotel Federation and a vice-chair of the Association of Greek Tourism Enterprises SETE.
Andreadis and the Hellenic Association of Travel and Tourist Agencies (HATTA) also said they see a 10 percent drop in tourist arrivals.
The global crisis is taking a heavy toll as not only fewer tourists arrive — lured to destinations with cheaper currencies like Turkey or stuck at home in Britain or Germany because of recession — but those who come spend less.
Spain, another top tourist destination in the euro zone, reported on Tuesday that foreign visitor numbers were down 10 percent year-on-year in June though this was slightly better than the January-May period.
“The decline is disastrous in terms of revenues,” said HATTA’s head Argiro Fili. “Tourists don’t spend money or spend on lower quality services.”
Although last-minute bookings had helped limit the fall in arrivals to some extent, Fili said she feared some businesses would go bankrupt.
“This is a worrying picture,” said Diego Iscaro, a London-based analyst at IHS Global Insight. “A significant fall in tourism receipts will be one of the main factors why we will see the Greek economy contracting in 2009.”
A country of about 11 million, Greece normally attracts about 15 million visitors a year, many from Britain and Germany. After a decade of booming economic growth, it is sliding into recession this year, as shipping and construction are also hit.
Standard & Poor’s Associate Director Marko Mrsnik said the tourism drop would weigh heavily on Greece, which makes up 2.5 percent of the euro zone economy, worsening unemployment, hurting domestic demand and consumer sentiment.
“This can be expanded in the second half of the year, and in a country that depends so much on domestic demand this implies that the downturn will be stronger than forecast,” he said, adding that S&P would most likely revise downwards its 2009 forecast of -1.4 percent GDP growth for Greece.
Deteriorating economic data forced Greece last month to cut its optimistic 1.1 percent growth forecast to zero. Greek central bank officials told Reuters last week they expected the economy to shrink by up to 1 percent on weaker tourism data.
“Things are terrible,” 56-year old restaurant employee Nicos Kassianos said in the heart of the touristy central Athens Plaka area. “We have 30-40 percent less clients than last year and nothing helps. Who knows what’s going to happen next year.”
Writing by Ingrid Melander; editing by Stephen Nisbet