We, Europe that is, are just hours away from knowing which party will take power in Greece. As I write, the polls are open and Syrzia are in the lead. I am sure everyone reading this knows, like me, that Syrzia wish to renegotiate the bailout terms set by the Troika. No one knows what will happen if these renegotiations go ahead, we’re in unchartered territory here.
However, it’s clear there is a possibility that Greece might leave the Euro and EU. The common belief is that which ever new currency comes into play shall be devalued against the Euro, forcing local produced products prices to drop (good for exports) and imported goods prices to rise (good for the domestic economy as more demand is placed on local goods, more needs to be produced and jobs are created).
Almost 2 million british residents visit Greece per year, the vast majority between the months of June and September during high tourist season. 2 million is huge. Tourism matters. Greece is one of the most visited countries in the world and thus tourism is a big part of the economy. 80% of the economy is driven by the service sector.
What would an exit mean for tourists and tour operators? I have no idea. I only have maybes. Here are some;
1. Prices drop and more tourists wish to visit. Great news for tour operators and holiday companies.
2. Prices drop and it looks attractive but there is local unrest, strikes, demonstrations or worse putting visitors off. Disaster for tour operators who have flights and hotels committed to the destinations.
3. Due to uncertainly many book there holidays to other european destinations such as Spain, Italy, etc… this will place extra pressure on those beds and various holiday companies will battle for availability. Prices might rise as demand rises. This is also a disaster for Greece and holiday companies as price drops in Greece make no difference to demand whilst there is an extra pressure on making sure each holiday company has enough beds elsewhere.
The only thing I am certain of is that no one knows what will happen. I hope Greece recovers either way, its awful to hear of the high unemployment rates and the struggle. It should be interesting to hear the results later today. Greece is on of my favourite places to visit in the world. For anyone who hasn’t visited, I highly recommend it, get out there!