2024 is expected to be a new landmark year for Greek tourism, with arrivals of 36 million tourists (+10% year-on-year). At the same time, behind these high figures, there is a substantial development: Greek tourism is gradually changing, according to a study by the National Bank of Greece.
In particular, the new issue of the “Business Trends” series of studies by the Economic Analysis Department of the National Bank of Greece highlights this transition to a less seasonal model, pointing out both the high chances of success and the great scope for its further enhancement, as it is fully in line with the new trends in international demand.
The study, first of all, highlights the fact that the foundations for high performance in 2024 were laid mainly in the first half of the year (+16%), with a peak in spring (+21%). This upward trend – reflected in a net increase in recruitment of 5% per year – maintained the country’s lead in the Mediterranean market (arrivals 21% higher than in 2019, compared to 9% in the Mediterranean).
For the second half of the year, the Bank’s analysts expect positive performance to continue with less momentum (+8%), but maintaining a key role in the annual result due to high seasonality.
Supportive of the above are (i) the first data for the July-August quarter (+6-7%) and (ii) the trend of the autumn leading indicators, where we expect performance marginally higher than in the summer (+9% yearly in terms of arrivals, culminating in the gradual resumption of road arrivals).
In particular:
– The economic sentiment index in key markets shows continued improvement.
– The hotel future activity index shows a strong performance against the historical average (+26 points in the last two months).
– Air traffic maintains its summer momentum, with an increase of 6-7% in scheduled flights and seats for the September-October period.
As the study points out, apart from the record performance, what characterises the year is the apparent trend towards a reduction in seasonality, driven by spring. In particular, the spring season managed to increase its share of arrivals in the previous 12-month period (June 2023-May 2024) by 2 percentage points (to 16% from 14% in 2023), setting a historic period high in arrivals reaching 5 million tourists (1 million higher than spring 2023).
At the same time, it is noteworthy that this emerging trend has the potential to be sustained in the medium term, as the spring acceleration had a broad base of support (i) between air and road arrivals (21% and 20% per annum respectively), but also (ii) between source markets (upward range 22-24%).
At this point it is noted that the dynamics are more limited with regard to the other shoulder-period (autumn), as its share of the year is close to the Mediterranean average (25%).
The emerging changes in tourists’ preferences are consistent with the transition to a new -less seasonal- tourism model, as the National Bank’s Sentiment Survey of a sample of Greek hotels shows. A key finding of the survey is the increased interest of tourists in local activities and products, as opposed to the waning interest in all-inclusive services associated with mass summer tourism.
In this perspective, it is highly encouraging that 44% of the sector is already pursuing actions to adapt to the new needs, while a further ¼ of the sector is planning to do so. While it is plausible that in these initial stages, larger hotels show a higher degree of mobility to adapt to the new conditions (in proportion to their generally more growth-oriented orientation), the survey also identifies parameters that smaller hotels can build on to keep up with the demands of the next day.
In particular, smaller hotels appear to have closer ties, both with customers (¾ of bookings are made through ‘direct’ contact) and with their staff (with almost 70% involving stable partnerships) – elements that are consistent with new trends in global demand.
However, the crucial development link that can make a difference, by activating their comparative advantages, is the promotion of cooperation with local businesses (aiming at creating an ecosystem).
Such initiatives to transform Greek tourism, the study’s analysts point out, are the right conditions to be strengthened (especially for the smaller hotels that now seem to be waking up), as:
– The first signs of relevant actions carried out show that they are leading to high returns.
– There is still considerable scope for further improvement in seasonality, especially in the spring period (with Greece still far from the seasonal profile of other Mediterranean destinations).
