CAPE SOUNION, Greece (AP) — When Stelios Zompanakis quit his job at the Greek central bank to try his luck at boat races, friends and family begged him to reconsider.
Nine years later, he spends the summers on the “Ikigai,” a 53-foot yacht he named after the Japanese concept of finding happiness through a life of meaning.
Week-long vacation trips on his yacht around some of the lesser-known Greek islands – Milos, Sifnos, Serifos, Kythnos and many others – were fully booked until October.
“The demand is insane,” said Zompanakis, who recently walked barefoot across the teak deck to adjust the sail and check the instrument panels as the boat swung past the ancient Temple of Poseidon, on a bluff south of Athens.
Tourism around the Mediterranean is booming. Helped by a strong US dollar and Europeans’ pent-up demand to find a beach after years of travel restrictions due to COVID-19, it’s a stronger comeback from the pandemic slump than many expected, leading to long lines, canceled flights and lost luggage this summer at many European airports, but not in Greece.
“People after COVID, after two years of frustration, probably put some money aside and decided they needed a vacation,” Zompanakis said. “And I think the income from their budgets that they are willing to spend increased, so that also brought more quality … and this helped Greece a lot.”
Greece is on track to beat its record annual tourism revenue. Portugal is also looking at a full recovery, while data from late summer suggests Spain, Italy and Cyprus will finish the year just below pre-pandemic visitor numbers.
A boon to Europe’s southern economies, the recovery also eases the the continent’s tendency towards recession caused by sky-high energy pricesthe war in Ukraine and lasting disruptions caused by the pandemic.
“For countries like Greece and others like Italy and Spain, they have produced a lot of resilience over the summer… despite the tsunami resulting from the cost of living and energy crisis,” said Lorenzo Codogno, chief economist at LC Macro Advisors and visiting professor at the London School of Economics.
Europe’s Mediterranean coast also offers destinations that are safe and culturally interesting, Codogno said, but the good news may not last long.
Economic growth in 19 countries that use the euro According to a new forecast from the International Monetary Fund, it will fall to 0.5% in 2023, up from 3.1% this year.
Greece, Italy, Portugal and Spain have the highest debt levels in the eurozone relative to the size of their economies and are also experiencing rising borrowing costs.
Stephen Rooney, senior economist focused on tourism at Oxford Economics, says tourism-dependent countries will eventually see their industries hit harder next year by the cost of living crisis driven by rising inflation and high energy bills.
“There is an expectation that these challenges will start to bite as we move into the last quarter of this year and into 2023,” he said. “We don’t expect the travel recovery to come to a halt in 2023, but we do expect it to slow down somewhat in 2023 in line with the general economic slowdown, before picking up again in 2024.”
In Athens’ historic Plaka district, tourists were still busy packing the narrow streets during a mild October, crowding around ice cream vendors and stopping to browse shops selling leather bags, jewelry, hats and souvenirs.
At Loom Carpets, co-owner Vahan Apikian has been folding and stacking carpets and laying out shoulder bags for customers, pleased that demand has remained high well into the fall.
“Business is going very well: we had many more visitors than in 2019, which was a record year. This year was even better,” he says.
As the days get shorter and the obscuring prospects for European Union economiesGreece and other southern member states have renewed their national efforts to set up year-round holiday destinations in the hopes that hiking trails, rock climbing and visits to historic churches can dampen the decline in winter arrivals.
But year-round tourism also exposes the shortcomings in governments’ ability to plan and coordinate, said Panagiotis Karkatsoulis, a senior policy analyst at the Athens-based Institute for Regulatory Research, which advises governments in Southern Europe and the Middle East. Oosten has advised on policy reforms.
“It doesn’t make much sense to promote a path to a historic monastery that closes at 3 p.m. or to take seniors to a destination with bad roads and no access to hospitals… tourism exposes all the weaknesses of a government” , he said.
This winter’s windfall, he argued, will have to be financed government support for ailing businesses and households rather than moving towards longer term improvements.
“Something like tourism that generates wealth is definitely positive,” he said. “But how that money is spent — that’s another conversation.”
AP reporters Theodora Tongas and Lefteris Pitarakis in Athens, Barry Hatton in Lisbon, Portugal; Raquel Redondo in Madrid; Menelaus Hadjicostis in Nicosia, Cyprus; and Colleen Barry in Milan contributed.