As Greek and European officials last week grappled with the
possibility of a Greek exit from the eurozone, interest in traveling to the
popular Mediterranean destination stalled as travelers took a wait-and-see
approach, even amid predictions that the current crisis could ultimately make
Greece a travel bargain.
“The reality is that the strongest and most stable economies
always have the strongest and most stable proportion of international and
domestic tourism,” said William D. Frye, associate professor at the College of
Hospitality and Tourism Management at New York’s Niagara University. “Strong
and stable are not appropriate terms to describe Greece’s situation currently.
For the time being, at least, ongoing media coverage of
economic turmoil in Greece is likely to have a negative impact on the tail end
of the destination’s high summer season. Several data-collection agencies last
week were reporting that bookings to Greece had slumped since news of the
country’s referendum vote became known.
On July 5, the citizens of Greece voted against the European
Commission’s austerity-based bailout measures. In the lead-up to and in the
aftermath of that vote, a situation that has Greece teetering on the verge of
economic collapse, online searches for Greece dropped by 23%, according to
Internet travel data provider Sojern.
Meanwhile, other Mediterranean countries, notably Turkey and Croatia, have experienced an increase in searches over the last few weeks, Sojern reported.
Within Europe, travelers from countries with stronger economies appeared more concerned about traveling to Greece due to the current economic crisis, according to a survey of 22,500 international European travelers conducted by online search engine GoEuro.com.
Seventy-two percent of Germans who traveled to Greece in the past five years revealed that the current financial and political situation there has affected their perception of the country in a negative way, GoEuro.com stated.
“Spaniards, on the other hand, were less likely to view the situation so negatively, with up to 93% stating that it did not affect their perception of Greece,” the company stated.
In the U.S., travel sellers and tour operators that sell Greece said they were fielding calls last week from concerned travelers who were watching the news about the country’s uncertain economic and political situation and wondering if they would be able to use credit cards and obtain cash from ATMs in Greece. But travel sellers said they were not experiencing cancellations.
“We’re telling them to bring a little more cash than normal,” said Dora Bitsos, general manager of Travel Leaders/Apollo Bock in Omaha, Neb. Bitsos specializes in travel to Greece and is a Greek native. She said that all her Greece bookings have been confirmed and that so far the agency has not had anyone cancel.
Bitsos said that even though her clients’ credit cards should work, and that international banking clients should not experience any of the daily ATM withdrawal limits being placed by Greek banks on Greek nationals, the extra cash would help in the event there is a longer ATM line than usual.
Whatever happens in the coming days and weeks with regard to the current economic crisis in Greece, travel will ultimately play a large role in the Greek economy and could be a key to the country’s recovery.
How much and whether the situation in Greece is impacting forward bookings from the U.S. is less clear, in large part because while Europeans might book Greece vacations much closer in due to the closer proximity of the destination, for American travelers the busy booking season for Greece, in spring and early summer, has already passed.
“I think by the time we’re ready for the 2016 season, after Christmas, things will have settled,” Bitsos said.
As for whether she thinks Greece will ultimately exit the eurozone, “I’m hoping they will not,” said Bitsos, who still has family living there. “The decision was made to not accept the negotiations. It was not a decision to get out of the eurozone. [Greeks] want to stay in and have more negotiations.”
Whether or not Greece will exit the eurozone, a “Grexit” as it’s being referred to in the media, is yet to be determined. If it does, one possibility would be for Greece to adopt its pre-euro currency, the Greek drachma. Alternatively, Greece could end up staying in the eurozone. Either scenario would entail larger, much more complicated economic consequences.
But for American travelers, Greece staying or departing the eurozone will actually likely have a similarly beneficial outcome — a stronger dollar against whichever currency Greece ends up embracing.
The Greek drachma is currently pegged to the euro at a rate of 340, which translates to a rate of 309 drachma to the dollar, according to Christopher Vecchio, currency strategist at DailyFX, a foreign exchange market news and analysis service.
The all-time highest rate the dollar reached against the drachma was 410 in 2000, and Vecchio said, “That’s a level that could easily be achieved once more. As a standalone nation, Greece would be on the verge of a currency crisis, if not already enveloped by one.”
Additionally, whether or not Greece stays in the eurozone, the dollar is likely to stay strong or continue to gain strength against the euro, Vecchio said.
“Under the current parameters, a Greek exit would undoubtedly be a negative event for the eurozone,” Vecchio said. He added that the longer the Greek crisis drags out, the greater instability the situation will inflict on the eurozone.
If Greece does exit the eurozone, said Mike McCormick, executive director of the Global Business Travel Association, “Ironically, we could see travel to Greece increase, as leisure and business travelers alike take advantage of favorable exchange rates and lower prices on everything from hotels, air fares and rental cars.”
Whatever happens in the coming days and weeks with regard to the current economic crisis in Greece, travel will ultimately play a large role in the Greek economy and could be a key to the country’s recovery.
In 2014, the travel and tourism industry’s direct contribution to Greece’s GDP was $13 billion, or 7% of the country’s total GDP, according to a report published by the World Travel & Tourism Council.
“One of the most helpful things that we can do for Greece is to continue to travel there, whether for business or holiday travel,” McCormick said.