Positive Economic Impact on Greek Tourism Expected in 2025
The Greek tourism sector is poised for a positive impact in 2025, driven by favorable macroeconomic conditions. According to a recent report by the Greek Tourism Confederation (INSETE), the trajectory of GDP and private consumption in the primary markets for Greek tourism is projected to remain stable or slightly higher in real terms, with an expected growth of approximately 1% compared to 2024.
Recovery and Growth Across Key Markets
A notable increase in GDP is anticipated in the United States, possibly around 2%, with neighboring Balkan countries projected to see an increase of about 3%. This growth is expected to enhance road tourism to Greece significantly. Meanwhile, inflation in the Eurozone has stabilized at about 2%, which may prompt the European Central Bank (ECB) to consider lowering interest rates. Despite geopolitical challenges, the prices of oil, which greatly affect transportation costs, are being kept in check.
Uncertainties Affecting Economic Progress
However, certain uncertainties loom over global economic developments, particularly in the U.S. The pace and effectiveness of the new American administration’s macroeconomic and trade policies present a significant uncertainty. These policies could directly or indirectly impact the recovery trajectory of European economies, particularly those in the EU-20, including Germany, which could experience fluctuations due to factors such as currency devaluation.
Additionally, European economies remain vulnerable to internal political crises in countries like France and Germany, which can affect public finances and economic growth. The ongoing conflict in Ukraine also adds to the uncertainty, further complicating the economic landscape.
Currency Exchange Rate Impact
For two of Greece’s three main tourism markets in terms of revenue, the U.S. and the UK, the anticipated divergence in interest rates between the Dollar and Pound Sterling on one hand and the Euro on the other is expected to lead to an appreciation of these currencies against the Euro. This shift could facilitate an increase in the number of tourists arriving from these regions.
Insights from INSETE
Commenting on the report’s findings, Mr. Ilias Kikilias, General Director of INSETE, remarked, “The economic developments in the global economy and especially in the main countries of origin of our visitors have direct implications for tourism demand. Continuous monitoring of macroeconomic trends and prospects is essential for timely diagnosis of changes and corrective actions. Competitiveness, resilience, sustainability, and adaptability are critical for maintaining Greece’s strong position in the global tourism market amidst a volatile and changing international environment.”
Overview of Market Trends for Greek Tourism
Let’s now delve into how specific tourism markets for Greece are faring and their future prospects as we head into 2025.
Eurozone Insights
In 2023, Greece generated around €9.1 billion from incoming tourism from Eurozone countries, accounting for 43% of total tourism revenue (including cruise-related income). By the end of November 2024, revenues from the Eurozone are estimated to reach €9.3 billion, reflecting a 3.5% increase compared to 2023. Additionally, international air arrivals from Eurozone airports are projected to grow by 9% compared to last year.
Looking ahead to 2025, GDP growth in the Eurozone is anticipated at 1.2%, up from 0.7% in 2024, with an expected 1.1% rise in private consumption.
Insights from Germany
Germany constitutes a significant source of revenue for Greek tourism, contributing approximately €3.6 billion in 2023 (17% of total revenue). Revenue from Germany for the first eleven months of 2024 is projected to stay at about €3.6 billion, marking a 3.5% increase from the previous year, with international air arrivals from German airports likely rising by 8.8%.
Despite ongoing geopolitical and economic restructuring in Germany, a GDP increase of 0.8% is predicted for 2025, a recovery following a slight contraction in 2024, while private consumption is expected to grow by 0.7%.
Insights from France
France is another critical market for Greek tourism, generating around €1.4 billion in 2023, equating to 7% of total tourism revenue. Projections for revenue from France for the first eleven months of 2024 show a decline to €1.2 billion—an 11.7% decrease compared to 2023. Nevertheless, air travel from the country is estimated to increase by 5.1%.
Forecasts for 2025 suggest a 1.0% increase in French GDP, with private consumption expected to match that growth rate.
Insights from Italy
Italy contributed approximately €1.1 billion to Greece’s tourism revenue in 2023 and is showing promising signs moving into 2024 with a projected 13% increase in revenue and a rise in air arrivals expected to reach 12.6%.
In 2025, Italy’s GDP is expected to rise by 1.2%, while private consumption is forecasted to increase by 1.0%.
Insights from the United Kingdom
The United Kingdom provided around €3.3 billion in tourism revenue in 2023, adding up to 16.7% of the total. Forecasts suggest a slight decline in revenue to €3.1 billion in 2024; however, a rise in air travel from UK airports is anticipated at 7.2%.
In 2025, an increase in GDP of 1.2% is predicted for the UK, with private consumption expected to match that growth rate.
Insights from the USA
The United States is a critical market as well, contributing about €1.4 billion to Greece’s tourism in 2023. By the end of November 2024, this is expected to rise to €1.5 billion, showing a growth of 13.3% from the previous year, complemented by a remarkable 24.2% increase in air arrivals from U.S. airports.
For 2025, a further GDP increase of 1.9% is projected in the U.S., with a growth in private consumption forecasted at 2.1%.
Conclusion
As Greece looks towards 2025, the tourism industry stands on the brink of potential growth fueled by positive macroeconomic trends across key international markets. While uncertainties persist in the global economy, robust recovery signs from crucial tourism source markets suggest that Greece can further solidify its position as a premier destination. Continuous monitoring and adaptability to these economic shifts will be essential in ensuring the sustainability and success of Greek tourism in a competitive global landscape.
