Greece is tired of the invasion of tourists during the summer months and the consequences they have on the lives of the country’s citizens, despite the clear economic benefits for the hospitality sector. For this reason, the government of Athens has decided to impose taxes on visitors who come to the country during the hottest times of the year and in the most popular locations.
Overtourism
Greek Prime Minister Kyriakos Mitsotakis has announced measures to address the negative impact of overtourism, saying the government is “very concerned” about the influx of cruise passengers in some months of the year. Athens plans to impose a 20-euro tax on cruise ship visitors to the islands of Santorini and Mykonos, the most popular destinations, for example.
To understand the impact of tourism, consider that Santorini, which has a population of 20,000, nearly doubles its population during the hottest months of the year due to the influx of tourists, many of whom disembark at once from large cruise ships in their hundreds. The government also plans to regulate the number of these ships arriving at certain destinations at the same time, and to impose rules on the islands to protect the environment and address water scarcity.
“Greece does not have a structural problem of overtourism but some of its destinations have a significant problem during some weeks or months of the year, which we need to address,” Mitsotakis said at a press conference this weekend. Tourism revenues in Greece stood at around 20 billion euros in 2023, with nearly 31 million arrivals. In Santorini, protesters called for limiting entries as is done in other popular tourist destinations in Europe. Part of the revenue from the cruise tax will be returned to local communities to be invested in infrastructure, Mitsotakis said.
The housing crisis
Greece received a record 36.1 million visitors in 2023, while arrivals increased 16% to 11.6 million in the first half of 2024, according to the latest data from the Bank of Greece. The tourism sector contributes about 20% to the economy, making it vital to the health of the nation.
But at the same time, short-term rentals have been blamed for fueling the country’s housing crisis, which, along with high consumer prices, is putting the nation’s citizens in a difficult situation. That’s why the government has announced it will ban any new short-term rentals for at least a year in three key areas of Athens, saying that property owners who change their lease from short to long-term will not have to pay rental tax for a period of three years, as will owners who decide to rent out their homes instead of keeping them off the market.
Vacation rentals increased an average of 28% annually from 2019 to 2023, while available short-term rentals doubled over the same period. Meanwhile, hotel accommodations increased by just 3.5% over the same period, according to data published in a Grant Thornton report for the National Hotel Chamber.
