Foreign Tourist Arrivals to Greece Rose by 8.5 Percent

Recently released official data show that foreign tourist arrivals to Greece rose by 8.5 percent year-on-year (y-o-y) in 2007 –slightly stronger than we had previously forecast- which represents three years of steady growth in the tourism sector. The number of cruise passenger arrivals (included in these data) declined slightly y-o-y.

As in 2006, the UK and Germany were the key source markets, accounting for around 15 percent and 13 percent respectively of total arrivals (down on a year earlier). Arrivals from the UK were largely unchanged, compared with 2006, while the number from Germany declined marginally.

However, the number of EU visitors rose a buoyant 20 percent y-o-y in 2007, while the relative proportion of arrivals from the EU also increased relatively sharply, from nearly 66 percent in 2006 to almost 73 percent. Of particular note was the strong growth in arrivals from a number of Eastern European countries, including Bulgaria, Romania, Hungary and Poland.

Greece’s economy performed better than expected in last year’s first quarter, due primarily to strong export growth, which helped offset the effects of waning domestic demand. However, with the country’s main trading partners directly affected by the ongoing U.S. slowdown, such support is unsustainable.