Nice place, shame about the economy

If Greece loses tourism, it loses everything, writes BRIAN BLAKE, who arrived on holidays in Crete to be greeted by half-empty bars and eerily quiet restaurants

IT WILL BE the end of the summer before Greece knows exactly how much the turmoil surrounding the euro has cost the country in terms of lost tourism revenue. But early indications are that visitors numbers are down substantially, which is hardly surprising, given the gloomy predictions early in the year about the imminent collapse of the economy there.

It was amid this uncertainty and with some trepidation that my family and I took a gamble and booked our holiday in Crete. Reaction ranged from, “Are you mad? There are riots on the streets there,” to, “Better book your drachmas now; they’ll be leaving the euro.”

And for a long time, it appeared the naysayers were right. Headlines predicted the imminent departure of Greece from the euro zone, with the inevitable consequences for the economy – and for anyone planning a visit to the country.

Then came the first election which, we optimistically reasoned, would clear up matters once and for all – either Greece would be staying in the euro or there would be a hasty exit followed by a swift return to the drachma and all that it entailed.

But the uncertainty continued when it turned out a second election would be needed, this one billed as a referendum on whether the Greek people were willing to stomach the grim austerity measures needed to continue with the euro.

This time they said yes, but the naysayers weren’t going to be silenced, billing it as a temporary measure.

Still, it was the best news we’d heard so far – our holiday could go ahead without currency-exchange worries, but there were still nagging doubts. Would the hotel we had booked online still be open when we arrived, or would the car-hire company have a vehicle for us?

Travel websites offered some comfort, assuring us that Greece was open for business, with the caveat that it would be best to bring cash in small denominations in the event that the ATMs ran out of money or there was a reluctance to accept credit cards.

But, as anyone who has visited Greece knows, cash has always been the most welcome way of doing business there – and therein lies the origin of much of the country’s economic decline, given the difficulty of keeping track of it for taxation purposes.

Arriving at Heraklion airport in Crete, there didn’t seem to be as many tourists as we expected in holiday season. Our luggage arrived without delay, there was no queue at the car-hire desk and there was little traffic on the road to our apartment complex.

Our initial impression that tourist numbers were down was confirmed during the first week by the half-empty bars and restaurants everywhere we went, with proprietors ready to pounce on passers-by in an effort to entice them inside.

This has always been the custom in Greece, but although the good humour remained, there was a desperation in their urgings this year that had been absent the previous times we visited the country.

However, many restaurants didn’t seem to be doing much to help themselves when it came to prices, with the cost of meals on a par with what you’d pay at home. You expect better value on holiday, particularly when you know it can be found in the likes of Portugal and Spain.

The minority of restaurants that had adapted to fewer visitor numbers and lowered their prices were easy to spot – they were doing a steady trade, in stark contrast with the eerily quiet establishments around them.

Value was difficult to find in the shops, too. In one shop, a pair of shoes priced at €30 had been increased to €45 when we went back to buy them the next day.

Another shopkeeper was dismayed that the Greek tourist authorities hadn’t done more to assure visitors that the country was open for business. “Even if the euro had gone, it would have taken a year to reintroduce the drachma and euros would have been taken in the shops and restaurants,” she said.

It was as if the Greeks still hadn’t accepted the new reality and were carrying on as if little had changed, perhaps hoping to ride out the storm in the expectation that the tourists would return in their throngs next year now that the country is staying in the euro.

This is a huge assumption to make, given that the euro is not out of the woods yet and there are sure to be many twists and turns before any semblance of stability returns to international markets.

Last month, Greek tourism industry groups said they expected revenues to be down by about 15 per cent this year, while the central bank announced a record 24.2 per cent year-on-year drop in travel spending by nonresidents.

Greece is a beautiful country and has in abundance what we would give our eye-teeth for – guaranteed sunshine. Revenue from tourism, which accounts for one in five jobs and nearly a fifth of GDP, could go a long way towards helping to solve its economic ills.

But the country has to be careful not to price itself out of the market. This is a high-stakes game – if it loses tourism, it loses everything.