By: Stathis N. Kalyvas

Photo: Ekathimerini

All it takes is a visit to the Cyclades to realize that a huge change is currently afoot in Greece, a surge in tourist activity. This is not exclusive to the islands. Athens, for instance, is experiencing the same, with more than 16,000 visitors heading up to the Acropolis alone every day. There were never so many direct flights to Greece from the United States or so many global celebrities singing the country’s praises from their social media platforms. After a two-year slump brought on by the Covid-19 pandemic, the current inflow is on course to break the record numbers of 2019. Estimates for August point to more than a million arrivals per week. This is contributing to a celebratory mood in Greece. Isn’t it great?

Not quite. As Alexis Papachelas recently noted in this newspaper, this surge is causing some serious problems, especially in these most fragile of all places, the islands: unfettered construction, terrible traffic, water supply and sewage issues, piles of garbage and all-around woeful shortcomings in infrastructure. Ills, in other words, that are stemming from large numbers of visitors or “overtourism.” Beyond the actual burden, this is also likely to produce a negative impact on the country’s brand name, a classic case of the “tragedy of the commons” or the shortsighted overexploitation of resources leading to their depletion and the eventual demise of the people who depend on them for a living. This is not, of course, a Greek problem; in one way or another, it is affecting many the world’s most popular destinations. Cities like Barcelona or Venice are already pushing hard in favor of regulating, even reducing the inflow of visitors.

We are already beginning to see that more infrastructure cannot be a solution to these ills, very much like more highways lead to more traffic which necessitates even more highways. Building or expanding an airport on an island may improve access to it, but it also multiplies visitor numbers, putting additional strain on infrastructure. The single-minded focus of maximizing visitor numbers no longer makes sense.

The transformation

For generations of Greeks who have grown with the logic of “the more tourism, the better,” this point might sound bizarre or downright crazy. After all, the country badly needs the income from tourism. However, a more profound and consequential transformation is already taking place in front of our eyes: across several places in Greece, mass tourism is being superseded by high-income, VIP tourism.

This transformation is apparent, not just on Mykonos or Santorini, but on islands which had a much lower profile, such as Naxos, Milos or Tinos, where land sales have exploded, as have prices. Thousands of building permits are being issued and the mansions now going up there are a far cry from the modest holiday homes and middle-class compounds of the recent past. We’re now seeing giant structures of cutting-edge minimalist design, palatial mansions hewn into the contours of the natural landscape and massive, mansions with enormous gardens. Most of Greece’s top architectural firms are catering almost exclusively to this market, which is also attracting famous European starchitects. Clients belong to the ranks of the very wealthy, people with homes in Paris, Zurich, Los Angeles or New York. This trend is rapidly spreading across the Aegean, the Ionian and the Peloponnese; it has even begun to appear in the interior mountains of Greece, like in Epirus. Local services are adapting accordingly, and an entirely new ecosystem has emerged, consisting of “villa managers,” private chefs, private tutors and carers for children, chauffeurs etc. Local tavernas, meanwhile, are being replaced by high-end restaurants and traditional staples like horiatiki salad and ouzo are replaced by ceviche and sushi along with expansive and expensive wine lists. Even the language of everyday communication is changing with English becoming omnipresent.

Incoming data paint a vivid picture. Visitor expenditure is up this year by around 9% compared to record-shattering 2019. Four- and five-star hotels and luxury short-term rentals are booming. In contrast, lower-end lodgings and less attractive destinations appear to be stagnating. What is happening is, in other words, a structural shift toward higher income brackets. Recognizing this trend, several international investment funds are snapping up dozens of dated and overindebted hotels to transform them into more luxurious venues.

The VIP push

The most telling piece of data is perhaps the leap in private jet arrivals. In the first seven months of 2022 they shot up 40% against the record-breaking year of 2019 at Athens International Airport (AIA) and the 14 regional airports managed by Fraport. AIA handled 8,149 private flights in this period compared to 4,866 in January-July 2019, a jump of 67%. Together, these 15 airports welcomed more than 14,000 private flights by the end of July; that’s three flights an hour for every day of the week. The number is even higher if you add other airports such as those in Iraklio, Crete, and Kalamata in the southern Peloponnese, and that doesn’t include private helicopter flights, which came to more than 2,500 at the landing pad of Spata, east of Athens, in the January-July period. Space is currently sought at military airstrips because civilian ones are having trouble coping. This is literally the jet-set!

So, why is this trend important? “Luxury tourism” seemed like a very desirable but unreachable goal until recently. Hence this could be hailed as a positive change, especially to the degree that it helps edge out mass tourism. It could also be argued that the emerging class of foreign homeowners will push for better infrastructure and services that are commensurable with their investment.

At the same time, however, this trend is clearly displacing low- and middle-income travellers away from the most attractive destinations. This is consequential for Greeks because the more VIP tourism expands, the faster ordinary people, chief among them Greeks, lose the ability to afford a holiday by the sea.

This is obvious this summer, and not just because of inflation. Most Greeks can no longer afford the cost of traveling to or staying at the country’s premier destinations. Even a simple trip to the beach is becoming a (very) costly product with the dramatic expansion of the sunbed culture which is transforming the country’s coastline into an expensive (and often loud and tacky) succession of club-restaurants. There is a major shift from cheap canteens with flimsy umbrellas and recliners to luxurious and exclusive beach bar-restaurants with huge, bed-like loungers charging corresponding prices.

Those who cannot afford this expense will perforce move to more affordable (and likely less attractive) destinations and more and more people will lose the ability to keep up with the VIP tourism transformation. Greece’s coastline is lengthy, but it’s not infinite. As VIP tourism expands, the options of non-VIPs contract: it’s a zero-sum game.

Comparative advantage

The option of selling luxury and exclusivity is potentially Greece’s comparative advantage and, therefore, the country should charge for it so long as its prices meet the demand. And there is no denying that the demand for Greek holidays is potentially huge, much bigger than we have realized. Greece may not be the most beautiful country in the world as Greeks like to boast, but its combination of landscape, sea and climate is a rare and extremely valuable commodity. The number of people that would like (and can) buy these commodities is growing fast across the world.

Here comes the critical objection, however. Greece, like any country, is more than a combination of landscape and climate; it includes the people and their culture. The transformation of a large part of the country into a commodity stripped of its human component is potentially a disaster. What’s more, the “Greek summer” is not just a marketing catchphrase. It is much more for Greeks: something elemental and profound, connecting them to their experiences, their land, and their past. It is an essential part of their collective identity.

Indeed, how many Greeks of my generation have not had the experience of weeks-long holidays at pristine beaches on tiny budgets? The summer literally defines us, as economist Aristos Doxiadis so aptly argued in a piece for Kathimerini in 2013: “Summer is something some people buy and others own as a birthright. We Greeks belong in the latter category.” Going on holidays, he noted, is something provided by the global tourism industry for most people in the West, yet for urban Greeks, summer holidays are “not a service we pay for, but a return to our own, parallel life… Summer is our second home. For many, this is quite literally true thanks to widespread small-scale property ownership. But even others who stay at hotels or rented rooms know exactly what they’re looking for: a beach, some fishing, a hike, a taverna or a beach bar.”

The cost

And yet this is a description that already seems dated. The Greeks’ special relationship with the summer that emerged with the country’s urbanization about half a century ago, is already waning. Starkly put, we are bequeathing the subsequent generations of Greeks not just a massive pile of debt, but also a summerless Greece.

The toll will not just be psychological. It carries with it significant economic ramifications. The replacement of a rich human environment by a sterile resort culture intended for the very rich will cost Greece another, much more important comparative advantage, and a potential game changer at that. As I argued in my book “The Greek Dream,” Greece’s ability to attract creative people to live and work there relies on its ability to offer access to a highly attractive lifestyle; the Greek summer is a key component of that lifestyle. Lose access to it and the lifestyle proposition becomes much less attractive.

I am afraid that Greece has already embarked on an irreversible path. Just as the poverty-stricken Cyclades of the 1950s became the mass tourism engine we see today, so they will likely be transformed into a VIP mecca. What can be done about it? Here is not the place to discuss how to deal with these developments. Clearly, solutions are unlikely to be found in a romantic longing for a past that is now gone. Managing this new reality calls for targeted and clever public policies, a goal that is hard but not impossible. This, in turn, requires that we recognize how dramatic is the shift that is taking place right before our eyes.


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