How the euro crisis affects travellers to Greece

June 22: Euro crisis latest: The results of the election put the pro-austerity parties narrowly in a position to form a government which also means Greece for the moment stays in the eurozone. In the interests of good SEO we’ll update information in new posts. Stay tuned!

June 17: Christos Stergiou, a Stanford-educated economist turned founder of TrueGreece, a specialist travel agency, told Conde-Nast Traveler: “As a precautionary measure, my advice is for people to have money with them, cash in euros. Only as a precaution, so they don’t have to rely on ATMs for cash. Travellers should also have their foreign credit cards with them. Even in the unlikely scenario of a bank run while travellers are in Greece, the euro will still exist. If you have euros on you, you don’t have to rely on the bank….People should think of the Greek islands as a great deal right now—it’s hit rock bottom in terms of prices. And the value offered is incredible.”

Greeks go to the polls today and the world is watching. The outcome of the second election is likely to have worldwide ramifications.

June 14: Greek business owners on the island of Zakynthos say fears are misplaced, the BBC reports. Some say, rightly or wrongly, that if people are still comfortable visiting Israel, despite suicide bombings and occasional rocket attacks, there’s no reason to stay away from Greece.

June 13: International Business Traveler reports: London-based Olympic Holidays, a major seller of Greek package holidays in the UK, has reduced its rates by up to 25 per cent for peak season travel. Overall hotel rates in Greece average 100 euros for a twin room, considerably lower than most other European nations. A record 16.5 million tourists visited Greece last year and revenues rose by 10 percent to 10.5 billion euros. Rick Steves, a popular European guidebook writer and US television host, said tours in the country have been “as smooth and fun as ever — virtually unaffected by the local political and economic events.”

June 11: Multiple airlines are dropping Athens as a destination:

  • Singapore Airlines says it will no longer fly to Greece because of weak passenger demand. The carrier, which has flown to Athens since 1972, said in a statement that its two weekly flights to Athens will end on October 26.  Its regional hub will be Istanbul instead. SIA is the world’s second largest airline but has not been immune to recent market losses in the GFC
  • Delta Airlines has also stopped direct flights between New York and Athens
  • KLM reduced its flights between Athens and Amsterdam
  • Czech Airlines, Ukraine’s Aerosvit and Finland’s Blue1 reduced their flights to Athens
  • Air Canada reduced flights to Athens
  • Thai Air, after 36 years of service, cut its direct flights between Athens and Bangkok
  • Gulf Air no longer flies between Athens and Bahrain.

 This situation isn’t solely a Greek problem, I might add. Other airlines have been making changes. For example, Air Asia X chopped its routes to Mumbai, Delhi and Christchurch earlier this year, to focus more on regional flights, although it did finally get landing rights in Sydney for SYD-KL. United Airlines cancelled its proposed Houston-Auckland route before it even got off the ground, much to the disappointment of Auckland International Airport.

June 7:  If Greece gets bounced out of the euro it would set the country back 30 years: Dimitris Politopoulos, Greek businessman (quoted by the BBC).

In other news,  Athens police issued an arrest warrant for the spokesman of Greece’s extremist far-right Golden Dawn party, after he physically assaulted two left-wing deputies on live television during a morning political show. The neo-nazi thugs are also blamed for vicious assaults on refugees.

On a lighter note, one of my friends, Linda, who lives on the island of Crete alerted me to a story about German tourists refusing to pay for their beers in a Cretan bar because Greece owes Germany money. The Germans were outnumbered by the Cretan bar patrons and came off second best.

June 6: How probable is a Grexit?  33%, according to credit rating agency Standard & Poor’s, reports Forbes.  S&P assigned that probability to a Greek exit from the European Monetary Union after the June 17 elections.  S&P believes that the possibility that Greece will renege on austerity and reform commitments has risen substantially, which will shove it out of the EMU and into default again.

June 5: HSBC has tested its cash machines in Greece to check whether they could cope with the reintroduction of the drachma if the country drops out of the euro, says www.thisismoney.co.uk  It is the clearest sign yet that the international financial sector believes Greece is on the brink of quitting the single currency and returning to its former currency. An HSBC spokesman said:  “Like all banks, we have been working with regulators to undertake preparatory work at multiple levels in the event of a sovereign default, an exit from the euro, or any other eventuality.”

Are you in Greece on holiday? Or planning to go there for a vacation?  Tell us about it. My Twitter handle is @TravelTaster. Drop us a line, or a tweet and tell us what’s happening. Please stay on message and no shouting.

June 4: Tour operator Thomas Cook expects a surge in bookings to Greece if it leaves the euro zone as holidays to the Mediterranean nation would become better value for hard-pressed travellers, the Saudi Gazette reports.  “If Greece exits (the euro), for the tourism industry it could be very profitable,” interim chief executive Sam Weihagen said after the company posted a steep first-half loss. “Most probably holidays to Greece will be more profitable for holidaymakers than they are today and places like Spain could lose competitiveness

May 31: Going to Greece? If you answered, ‘probably not’, then you’re not alone. Tourism was supposed to be a much-needed boost for the ailing Greek economy but political unrest and a potential Grexit have impacted vacation plans for would-be tourists, says Mindful Money. New data released this week shows vacation bookings from Germany as well as the rest of Europe have taken a sharp decline, with bookings in May down by one-third compared with May 2011. Hopes of reaching last year’s 16.4 million record visitors are dashed; early reservations for the summer tourism season have dropped 15% from last year.

May 31: The Huffington Post reports: British holiday bookings to Greece are soaring, despite the country’s economic woes. As many as four million Britons could head for Greece this summer, double the average number, foreign exchange company Travelex predicted. It said travel agents have reported bookings for all-inclusive holidays in Greece up a third in the last two weeks, with many tour operators slashing prices. Its survey showed that some people had deliberately booked Greek trips due to the strengthening of the pound against the euro. Around 20% of those polled said they were “not concerned at all” about a possible collapse of the euro in Greece, with most saying they were only “mildly concerned”. Fewer than two per cent had cancelled a pre-booked trip to Greece, while 47% said they would not change their travel plans whatever happened in Greece.

May 28: Mike Mason from Greek Islands Travel says“Independent travellers should take some precautions against a sudden Greek exit from the eurozone. Some low denomination euros would be useful to tide you over for the few days it would take to introduce a new currency. The euros in your pocket would be worth considerably more that the local currency afterwards, as would any sterling you held. Given the Greek preference for dealing in cash your British banknotes would be very welcome in any taverna or hotel.

May 27: The Mirror reports that British holidaymakers are warned not to make independent travel plans to Greece as it verges on exiting the euro. Consumers’ champion Which? urged tourists to protect their cash by booking package deals that pay out if chaos wrecks their trip. Thomson Holidays and Thomas Cook say they have contingency plans to cope.

Greek tourism officials have urged Brits to visit, promising they will be able to carry out any financial transactions as normal ­during the summer.

May 26: Europeans are avoiding vacations to Greece this summer fearing instability sparked by the debt crisis, industry sources said, inflicting a hard blow to the country’s already devastated economy, according to the Inquirer News. George Drakopoulos, director general of the association of Greek tourism enterprises (SETE) says: “Though tourism from Germany this year is back on the rise, overall booking numbers are still plummeting ahead of the busy summer season. Hotels make appealing offers, but that is not the issue here. For many of the tourists visiting Greece, it is a matter of security on top of value for money.”

This comes after a particularly profitable 2011 season, where Greece benefited from the unrest in the northern Africa.

May 23: Taste for Travel will be running a live blog from today on the Greek crisis, as it affects millions of tourists on their way to summer vacations. It will be updated regularly. SETE – The Association of Greek Tourism Enterprises – wants to assure holidaymakers that the country is safe. Dr Andreas Andreadis, President of SETE, says: “We want to encourage international tourism and assure potential tourists that there has never been a better time to come to our country. We are trying to change the way our country and its economy is run, however, this is not going to affect the quality of a holiday. Greece remains one of the top destinations in the world and we reassure holidaymakers that this summer remains business as usual.”

The Aegean island of Santorini, often voted the world’s best island

Greece goes back to the polls on June 17. Greek voters showed on May 6 they were sick and tired of austerity measures and voted extreme left and far right, gutting support for centrist parties which backed the EU bailout and austerity measures inposed by the EU. The Guardian reports Greece’s eurozone partners are likely to spend the next few weeks ratcheting up the pressure on the country’s voters to back parties prepared to stick to the spending cuts, wage reductions, tax increases and privatisation included in the austerity program.

What does this uncertainty mean for tourists? The most crucial element, apart from possible further unrest in the centre of Athens and transport strikes, is the state of the euro. The Greek extreme left party Syriza, which opposes the bailout payments and wants to tear up the austerity measures, looks set to gain more popularity. If this happens, and Greece defaults on payments of billions of euros, then it will exit the single-currency system and be on its own. The worst case scenario is that people will try to withdraw all their money from their banks and flee with suitcases of euros, banks will close while the old currency, the drachma, is reprinted, raising the possibility of financial and social anarchy.

Greek president, Karolos Papoulias, has said citizens were withdrawing their money amid “great fear that could develop into panic” at the risk of a debt default and exit from the euro. In little more than a week following the election on 6 May, 3 billion euros was withdrawn from bank accounts. The central bank reported that 800 million was taken out in a single day. If Greece does exit the euro, there will be a transition period so those tourists entering Greece with euros will have warning. The drachma isn’t going to appear overnight, although reportedly there is already a grey market operating already. There are many unknown factors – no-one has exited the euro before. The hope is that a departure from the eurozone would happen over a weekend, writes Jill treanor for The Guardian.

“Unless officials have been secretly printing drachma notes, the fastest solution could be to stamp drachma or some such symbol across existing euro notes although Greek shopkeepers and merchants may well be keener to accept clean euros rather than mock drachmas. Banks are also ready to be able to process credit card transactions for their customers in the new currency.”

Former Greek prime minister Lucas Papademos told Dow Jones on Wednesday, May 23: “Although such a scenario is unlikely to materialize and it is not desirable either for Greece or for other countries, it can not be excluded that preparations are being made to contain the potential consequences of a Greek euro exit.”

Here’s some travel tips if you’re going:

  • Some hard-hit hotels and tavernas may delay summer openings, or not open at all.
  • On the other hand, the effects of Arab Spring are still keenly felt and Greece along with Spain and Portugal (also financially crippled) have benefitted from an increase in tourism, which means increased confidence in parts of the tourism sector.
  • Monitor news reports for updates.
  • Be sensible. If there’s reports of unrest, steer clear of Syntagma (Constitution Square) where riots and violent protests take place in central Athens. Elsewhere it’s usually all fine. Even a few streets away in the tourist areas of Plaka you would barely notice anything is amiss. Unrest has been reported in the port city of Patras where those ludicrous neo-Nazis have been clashing over their anti-immigration stance.
  • The number of ATMS has been reduced, so take cash where possible, but not so much you’ll be worried about being a target of robbery.
  • Take your medicines from home as supplies of some medications are running low.
  • If the euro exit occurs, the value of the drachma to the euro could be a minimum of 1000 drx to 1 euro. Greece joined at 350 to 1.

As I’ve said before, Greece is one of the top countries on earth for a fantastic holiday. I’m biased, I lived there during social and financial upheaval for a decade – and the endearing parts of Greece still exist, no matter the upheaval. This is probably the most testing time for Greece since democracy was restored after a right-wing dictatorship was overthrown in 1974.

Comments

  1. Georgia Gerardis says

    Very valuable advice Heather! Although things are pretty tough for the Greeks, there is nothing to fear for our visitors. The locals will make their stay as memorable as possible.No foreigner will be left without a room, food or health care. It’s only us the greeks that have been deprived of that.The material possessions have been affected but the spirit remains the same. Greece still remains beautiful and will embrace anyone who visits just like she has been doing all these years. Greece is like the perfect mother. You may hurt her but she will always love you…

  2. says

    I lived and worked in Greece for many years (paying IKA, I may add). I agree that Greece is beautiful but I beg to differ when Georgia Gerardis says ‘No foreigner will be left without a room or food etc etc’. When XL went bust hoteliers and apartment owners were double quick to tell guests that they would not be providing them with food or beverages AND if they wanted to remain in the accommodation, they would have to pay for the privilage, despite having paid for their holiday to the tour operator.
    The feeling among the hoteliers etc. was that they would not be paid by the tour operator. It was chaos. There were some exceptions to the rule but very few.

  3. Ross Hand says

    Friends were staying at the Grand Bretagne when riots broke out in 2011 in the centre of Athens and it was ugly. They were scared, sleepless and when they tried to get aboard their ferry to the islands, the unions in Pireaus were preventing people from getting off the bus and onto the ferry and vice versa. Where’s the helping hand? By the way, I read a Greek blogger’s comments yesterday that if Greece defaults “the Greek euro will be worthless because it’s not the same as the German and French euro”. Shaking my head here.

  4. Jemma@PhilippineTravel says

    “It’s only us the greeks that have been deprived of that.” – It’s sad that Greeks are deprived of food or health care in their own country. :(
    I do agree that Greece still remains as beautiful as ever. The Acropolis is one of its most beautiful tourist destinations.

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