Tourism: The Four Sectors of the Economy that Soared in 2023

The Greek tourism sector made a significant mark on the country’s development in 2023, validating its designation as the “heavy industry of the country” as it played a leading role in four strategic sectors for the economy, according to the Interim Report of the Bank of Greece on Monetary Policy 2023.

Specifically, in 2023, the contribution of tourism was decisive in reducing the current account deficit, increasing employment and gross value added, and ultimately impacting the real estate market.

The Hellenic Statistical Authority (ELSTAT) reported a noteworthy hotel occupancy rate of 61.2% during the initial nine months of 2023. This period also witnessed a €4.6 billion decrease in the Current Account Balance deficit, amounting to €7.3 billion compared to the corresponding span in 2022. The positive shift stemmed primarily from advancements in goods balance and in services and secondary income balances, per the Bank of Greece Governor Yannis Stournaras.

Enhancements in service balance primarily arose from augmented revenue in travel services and, to a lesser extent, other services. Travel services witnessed a commendable surge, though slower than in 2022, with a 17.3% increase in arrivals and a 15.2% rise in receipts, surpassing 2019 figures. Despite a slight decrease (2.5%) in average spending per trip from January to September, non-EU-27 travelers, notably from the United States, exhibited a substantial increase. Key markets like Germany and France continued to contribute significantly to total receipts.

On a global scale, tourism reached 86.6% of 2019 arrivals by the ninth month of 2023, with Mediterranean inbound travel bouncing back to 2019 levels. Greece secured the fourth spot, following Italy and Turkey, witnessing an increased share (10.9% compared to 10.1%) in contrast to 2019.

The labor market experienced a steady expansion, marked by a 1.3% rise in total employment and a corresponding 1.3 percentage point drop in the unemployment rate from January to September 2023. Tourism-related activities recorded significant hiring boosts, although sectors like construction and tourism grappled with labor shortages despite wage increases.

Tourism’s pivotal role in elevating gross value added was evident, contributing 1.4 percentage points to the overall increase during January-September 2023. The sector’s positive performance resonated in the services sector’s 1.8% annual growth rate, confirming the buoyancy of the tertiary sector.

Despite economic uncertainties, the real estate market flourished, fueled by heightened tourism demand, investment drives, subsidized housing programs for the youth, and amplified foreign interest in property acquisition, including schemes like the “Golden Visa” program. This surge was evidenced by robust indicators and sustained market dynamism outlined in the Bank of Greece’s Interim Report.

In essence, Greece’s tourism sector in 2023 served as a linchpin, steering multiple economic domains toward growth and stability, reaffirming its status as a cornerstone of the nation’s economic fabric.