Tourist-trapped, in the Greek bailout | FT Alphaville

Tourist-trapped, in the Greek bailout

Or the Greek-German relationship, told through tourism.

I ask Germans to choose Greece for their summer holidays.

That’s Alexis Tsipras speaking to reporters in Berlin on Tuesday – and we don’t think it was a joke. He may not want the bailout memorandum, but he sure wants the tourist euros.

Tourism makes up around a fifth of the Greek economy (directly and indirectly), and Germans are some of the highest-spending guests, so as the economy struggles through its fifth year of recession, holidaymakers are ever more important.

Greece received a boost last year as the unrest in the Middle East made countries such as Egypt unattractive destinations. But it looks like German tourists won’t be propping up the Greek economy so much this summer (even if their taxes might). From Reuters:

Reports of animosity and even violence towards Germans over the hard austerity measures demanded by Chancellor Angela Merkel in return for bailouts, as well as fears of strikes, are keeping the world’s biggest spenders on foreign holidays away from Greece.

Air Berlin, Germany’s second largest airline, and Rewe, the retail and tourism group both said on Tuesday that bookings to Greece were around 30 percent below that of last year.

Hartmut Mehdorn, CEO of Air Berlin, said:

Greece is doing very badly, just like North Africa.

We’re not sure quite what he means, but it sounds like a comparison with North Africa is not a good thing in this case.

Discussing business from Europe in general, George Drakopoulos, head of the association of Greek tourism enterprises (SETE), was recently quoted by the AP:

From the aftermath of the elections on May 6, we have experienced a 50 percent drop in bookings.

When you think of the tax revenue that might be lost from this drop in activity, it’s possibly another sign that the bailout programme may be so far off course since the elections that it could have to be renegotiated anyway.

Elsewhere — while Thomas Cook and TUI slash prices for Greek holidays and prepare contingency plans in case of a ‘Grexit’, Ryanair’s Michael O’Leary is praying for one.

On Tuesday he was reported saying a return to the drachma could result in resort prices dropping up to 80 per cent, and lead to an “invasion” of bargain-seeking British tourists. (Something of a theme for O’Leary.)

If that’s not sufficient incentive for Greece to vote for the bailout in the June 17 elections, we struggle to think what could be.

Related links:
Greeks direct cries of pain at Germany – FT