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Greece wants to curb mass tourism – new taxes

It will be harder to find a room in Athens and more expensive to tourist on popular Greek islands like Mykonos and Santorini. The Greek government has launched a package of measures to curb the massive flow of tourists after the pandemic years.

» Updated: 04 October 2024, 24:41

» Published: 08 September 2024

Greece wants to curb mass tourism – new taxes
Photo: Gregorio Borgia AP/TT

Greece set a record in the number of foreign tourists last year. The country, with its approximately 10 million inhabitants, received a total of 36.1 million visitors in 2023.

This year, mass tourism to Greece has continued to increase, up by 16 percent to 11.6 million just in the first half of 2024, according to the Greek central bank.

Higher fee on Mykonos

Greek Prime Minister Kyriakos Mitsotakis presented a series of measures over the weekend to curb the development.

Cruise tourism will be hampered by a new fee, which all passengers must pay when they dock at a Greek port. The fee will be higher on the island of Mykonos and the Santorini archipelago.

Tourists looking for temporary accommodation in central Athens are also too many, according to Mitsotakis. The large number of apartments rented out to tourists has created a housing shortage in the Greek capital.

To combat this, the Greek government will now ban new short-term rental contracts for at least a year in three neighborhoods in central Athens. And property owners who switch from short-term rentals to longer-term contracts will simultaneously be exempt from paying property tax to the state for three years.

Rapid increase in tourist apartments

The supply of what is called tourist apartments has increased by 28 percent per year on average between 2019 and 2023, while the number of those renting out with short-term contracts has doubled during the period. The number of hotel rooms has only increased by 3.5 percent, according to a report from the consulting firm Grant Thornton.

In addition to the measures to curb mass tourism, Mitsotakis also presented other proposals over the weekend, including a program worth 2 billion euros to reduce mortgage rates, lower social fees, higher pensions, and minimum wages.

Our investments in 2025 are well-balanced, says Mitsotakis.

The tourism sector accounts for a fifth of Greece's gross national product (GNP) and the rapid increase in tourists to the country has contributed to strengthening Greece's otherwise relatively weak economy.

The Greek state – which, due to a deep debt and budget crisis, was on the verge of being forced to leave the eurozone just ten years ago – only got rid of the "junk status" on its bonds last year after 13 years of political turmoil.

Greece still has the highest state debt in the EU, compared to GNP. The debt is expected to fall to just under 160 percent this year, according to the International Monetary Fund (IMF). When it was at its highest in the pandemic in 2020 – after ten years of financial problems and large support programs – it was up to over 213 percent.

The EU's budget rules stipulate that state debt should not exceed 60 percent of GNP – but many other EU countries also have much higher debt ratios. The average among euro countries was 88.6 percent of GNP in state debt in 2023.

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By TTThis article has been altered and translated by Sweden Herald

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