The Read

How Greece Got Back On The Map

After years of political and financial turbulence, things are looking up for the oldest country in Europe

  • Santorini. Photograph by Gallery Stock

Mr Andreas Andreadis is not a man to do things by half. Greece’s best known hotelier led the development of upscale hotels and resorts during the go-go years after Greece joined the eurozone, creating the feted Sani Resort. Twenty years on, the CEO and co-owner of Sani is not going to let the small matter of Greece almost crashing out of the eurozone (and the political turmoil that ensued) stop him. “We are investing almost €250m in the Sani and Ikos brands,” he says, looking out over the beaches at Sani Dunes, the latest Sani hotel in Halkidiki, set to open 30 June. “I am very bullish on Greek tourism. It will do well.”

Mr Andreadis is not alone in looking to the future with confidence – and a fistful of euros. Across the Aegean on Rhodes, Mr Peter Fankhauser, the boss of Thomas Cook, one of the industry’s biggest players, has opened Casa Cook, which he insists is a hotel for hipsters, or at least as close to one as Thomas Cook package-holiday-makers will ever want. With its minimalist design, chiselled staff and modern Greek fusion cuisine, it’s “not something you would expect from Thomas Cook and that is exactly the point”, he says. “It’s chic yet affordable.” (Code for: “I can charge more and make better margins.”)

Airlines are also investing heavily in Greece. British Airways has added new routes, and now flies direct to Athens, Corfu, Mykonos, Santorini, Thessaloniki, Kos, Rhodes, Skiathos, Kalamata, Zante and Crete. Singapore Airlines’ low-cost carrier Scoot has introduced flights from several Australian cities to Athens via Singapore. Emirates offers direct daily flights from New York to Athens. Aegean, which acquired failed local carrier Olympic Air in 2013 and picked up its domestic routes, has also expanded its network to more than 33 domestic and 112 international destinations in 40 countries. Overall, there will be 1.5 million more airline seats available on flights to Greece this year – and not just because airlines are cramming more people onto their planes.

  • The new Sani Resort beach, Halkidiki. Photograph courtesy of Sani Resort

Suddenly, everyone wants to invest in Greece because they think they can turn a buck. Turn a buck? In a country where one bailout leads to another, elections come in threes, tourists still fear ATMs might run dry and the most lasting images of recent years have been rioting protestors clashing with police, tear gas in Athens and desperate migrants arriving on boats? Yes, that country. After a wretched few years, Greece – its tourism, at least – is back on its A-game.

Just take a look at the numbers. About 17 million people visited Greece in 2012. This year, that figure is expected to exceed 28 million. Britain has now become the biggest market, overtaking Germany. Greece is the top choice for UK travellers this year, after Spain. Tour operators say that bookings for 2017 are up by 40 per cent. Thomas Cook expects to take 2.5 million tourists to the country this summer, a rise of 500,000 compared with last year. Kuoni’s sales to Greece have leapt 30 per cent year on year.

Tourism revenue has risen from €10.4bn in 2012 to a predicted €15.5bn this year. That will add one per cent to Greek GDP. The Greek Tourism Confederation’s 2021 target is to attract 35 million visitors and generate €20bn in tourism revenue annually. The growth in tourism has surprised even Greece’s most ardent cheerleaders. “Honestly, myself, I did not expect such spectacular results,” says Mr Andreadis. “I did think things would be good, but I had no idea they would be this good.”

But how did Greece get here? Some factors are uncomfortably easy to identify. Tourism in Turkey, Egypt and Tunisia is in sharp decline following terrorist attacks and violent political turmoil. Others you can see if you visit places such as Sani Resort. Greek operators have, as Mr Andreadis puts it, “rolled up their sleeves and got on and created better-quality products”. Sani Dunes, which is an upscale addition to the wildly successful Sani Resort, is set to be built in just eight months, a remarkable feat for a country whose work ethic is not exactly renowned for being, well, German. It comes with five-star service and special events, including Sani Gourmet Festival (23 to 27 June 2017), which showcases the latest Michelin-starred chefs, and Sani Festival (7 July to 19 August 2017), which hosts distinguished musicians from around the world.

Elsewhere, Daios Cove Luxury Resort & Villas has partnered with Land Rover to offer guests the chance to explore isolated Cretan landscapes in a new Range Rover Evoque Cabriolet. Ikos Resorts is spiffing up the all-inclusive concept, allowing guests to dine out at local Greek restaurants at no extra cost. No more wristbands and buffets.

The figures bear out the trend. In 2004, at the time of the Olympic Games in Athens, only 28 per cent of hotel beds in the country were four- or five-star, and 72 per cent were three-star or below. Now, almost half – 43 per cent, according to the Greek Tourism Confederation – are four- or five-star. “Hoteliers, restaurateurs and transport companies all recognised that, whatever tomorrow would look like, there would be tourism. They had to protect themselves. And they protected themselves by investing,” says Mr Thrasy Petropoulos, head of communications at Marketing Greece.

  • Daios Cove, Crete. Photograph courtesy of Daios Cove

Greek operators have also done something new when it comes to cash. They are putting up with – for now, at least – higher taxes and not passing on additional costs to visitors. VAT and property taxes on tourism businesses have risen sharply as the government tries to balance its books. The islands have lost their 30 per cent tax discount. To make matters worse, interest rates have risen, making it more expensive to borrow money. Overall, the cost of operating in Greece is now about 10 per cent higher than it is in Spain, Portugal, Italy and France. “It’s a huge increase,” says Mr Andreadis, who knows because he has to pay it.

But, remarkably, prices in most resorts remain competitive. “Many operators absorbed the cost,” says Mr Petropoulos. Hotel prices in the Costa del Sol are up by six to 10 per cent, whereas local prices in Corfu are down by five per cent, according to research by Post Office Travel Money. The result is “tourists are getting new and better quality, with better value for money”, he says.

The operators’ belt-tightening has been supported by better PR. Marketing Greece’s campaign used the slogan “I’m an Athenian” to promote the coastal capital, with its bustling nightlife and café culture, not to mention the Acropolis. It has helped to ensure that, as Mr Petropoulos puts it, “Greece, as a holiday brand, has not been associated with the political and economic image of the country”. New attractions have also helped to tempt visitors, notably the Mr Renzo Piano-designed Stavros Niarchos Foundation Cultural Center in Athens and a new National Museum of Contemporary Art.

So, the big picture: the local politics and economics are stable, at least by recent Greek standards. No major political party supports leaving the eurozone and returning to the drachma, a devaluation that would make Greece more affordable for visitors but would send the economy into a tailspin. “I don’t see Grexit,” says Mr Andreadis. He describes the challenges of the past few years as “intensive – and expensive – national psychotherapy, but it is working. It’s worth it. People are wiser, not so extreme. We’re looking forward to better times.”

  • Ikos Oceania, Halkidiki. Photograph courtesy of Ikos Oceania

Greece is not out of the woods, however. The government is still in talks with its creditors about new financial support. Its debt mountain stands at €343bn, equal to more than 180 per cent of Greek GDP and getting on for twice the debt-to-GDP ratios of the UK and France.

Mr Andreadis also warns that, over time, taxes will have to come down again to match the levels charged in competing countries. “Small and medium-sized business, especially at the cheaper, more commoditised end of the market, will not be able to absorb the extra costs for ever,” he says. “The daily reality for many is tough.” The extra taxes amount to an additional €700m burden on the travel and tourism sector. “This is excessive, particularly when Airbnb-type rentals are not taxed at all.”

So far, Brexit and the weakness of the pound have not affected Greece’s biggest overseas market. UK bookings are up nine per cent this year. But there are signs that consumer spending in Britain is weakening. Summer 2018 may not be as healthy.

But, for now, with more direct flights from Britain to more destinations than ever before, plus more brand-new upscale resorts and hotels opening, 2017 is shaping up to be the year to fall in love with Greece. Again. And whatever kind of time you have, you’ll also know that, hard Brexit or soft, you are helping out the (near) neighbours.  

Greece is the word