Greece Tourism Report Q2 2010
Will Greek tourism get better in 2010?
After Greece's tourism sector suffered a poor year in 2008, the global economic downturn hit the sector hard in 2009. Official figures show that the number of tourists arriving at Greek airports fell by 7.8% year-on-year (y-o-y) in the first 10 months of 2009. During October, tourist arrivals were down sharply in Chios, Cephalonia, Chania, Samos and Athens. Declines in arrivals were less pronounced in Rhodes, Mytilene and Skiathos. The 10-month decline was a slight improvement on January-July 2009, during which tourist numbers fell by 8.6% y-o-y.
At the end of 2009, in an attempt to stimulate the tourism sector, the government introduced various measures, including a freeze on debt obligations until July 2010 for all forms of tourism businesses, including marine tourism. The plan also aims to provide support to lenders to boost liquidity to small and medium-sized tourism enterprises and to improve tourism infrastructure.
Unrest And Strikes
In an incident likely to further damage Greece's image to tourists, clashes broke out between police and protesters in Athens and Thessaloniki in December 2009 at demonstrations to mark the first anniversary of the death of Alexandros Grigoropoulos, a 15-year-old student shot by police. Calls for a national strike in February 2010 by Greece's largest trade unions to protest against the government's austerity measures are also likely to have negative consequences for tourism.
Forecast Scenario
Our estimate for 2009 remains little changed at 8% y-o-y negative growth in foreign tourist arrivals. We also hold to our expectation of a slight recovery in arrivals in 2010, with more favourable recovery in tourist arrivals expected from 2011. This is primarily based on our forecast of a generally weak European recovery, with eurozone growth coming in at just 1.8% in 2011 following a 0.9% showing in 2010, and UK growth of 3.1% in 2011 after 1% in 2010.
Athens International Airport
Data for 2009 show negative growth of -1.5% y-o-y in passenger traffic at Athens International Airport (AIA), with passenger numbers totalling 16.2mn. The rate of decline did show improvement during the course of the year however, with the airport registering one of the best performances among European airports with the second smallest decline in traffic according to AIA. The airport also posted favourable growth in November and December, compared with relatively sharp falls in the same two months in 2008. For 209 as a whole, the number of international passengers declined by over 5% y-o-y to about 10.1mn, while domestic traffic increased by over 5% y-o-y to 6.1mn passengers.
Aegean Airlines
In 2009, Aegean Airlines carried more than 6.5mn passengers, an annual rise of 10%. The number of domestic passengers reached 3.8mn, up by just 2% y-o-y, while international passengers totalled 2.8mn, an increase of 22% y-o-y. The airlines most recent financial results, for the first nine months 2009, show revenue increased by about 3% y-o-y, reaching EUR481mn. Net profit came to EUR37.7mn, compared with EUR26.5mn in 9M08, an increase of 42% y-o-y. The favourable results can be partly attributed to a fall in oil prices and benefits arising from fleet renewal.
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