Greece’s "Economic Crisis" and Its Effect on Travelers

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I just got back from eight days in Greece — Athens and the island of Hydra — updating my guidebook there. Before my visit, people were concerned that my trip would be complicated by the country’s “economic meltdown.” (A magazine I write for didn’t want to run my article on Greece, fearing that it would inspire its traveling readers to venture into trouble.) As has been my standard operating procedure lately, I wanted to go to Greece to get beyond the media hysterics and see for myself the truth — to experience firsthand the effect of Greece’s economic problems on travel there. Greece remains an enjoyable place to travel, but it does help to have some background in what’s going on there.

There’s no doubt that Greece has its economic problems. It has lived beyond its means, worked too short, retired too early, consumed too much, produced too little, enjoyed too much job security, created a real-estate bubble with overvalued properties, and funded too much on a growing deficit. Many other countries (including the United States) are plagued by these same problems, but Greece is an extreme case, with extreme consequences.

The Greek government is scrambling to salvage their economy. They’re getting more serious about collecting taxes. And those taxes are higher: From the beginning to the end of 2010, the Greek VAT (Value Added Tax, a national sales tax) will incrementally rise from 19 percent to 25 percent. This means everything people consume will cost more, because 25 percent of what they pay is going to the government to rescue the economy. Complicating matters: Many businesses have gone bankrupt because of the crisis, so there’s less competition — which means higher consumer prices.

What about all that violence in the streets? Strikes and demonstrations have long been a way of life in Greece. Most Greeks see a general strike as an excuse for an impromptu holiday. But there is a tiny anarchist fringe element that knows a peaceful demonstration or rally by teachers or doctors at Athens’ parliament building will have media coverage. And a handful of troublemakers will “come out to play with their friends” (as locals term it), and things become violent. Like back home, when it comes to TV news, “if it bleeds, it leads”; Greek and international media outlets embrace anything violent and exaggerate it. People who don’t get out much overreact, offering anarchists behind those actions huge rewards.

What’s the future? Greeks are optimistic by nature. They realize they’ve dug themselves into a pretty deep hole. But they also know they’ll get through their “tough economic times.” And they understand that a reality check — which will come with some brutal belt-tightening — is necessary. The biggest culprits of Greece’s notorious largesse are government employees. They have cushy jobs, 100 percent job security, and great benefits. In the public’s eye, they get in, make too much money, and — because they know they can’t be fired — just luxuriate away their work lives in worry-free comfort. There’s a huge anger about economic scandal and corruption, as maddening cases fill the news almost daily.

Simply put, Greece’s adjustments to its new economic reality won’t be fair. For instance, if you turned 60 in 2009, you’re comfortably retired. If you turned 60 in 2010, you’ll need to work seven more years. People are angry about that, but there’s nothing they can do. Young, well-educated, multilingual people feel that they’re overqualified for what Greece has to offer, and are tempted to go abroad for employment to match their skills. This potential “brain drain” of bright young people is yet another of the many challenges the new Greece will be dealing with.

What about the practical effect on tourists? Strikes are nuisance strikes — just a day or two here and there, and generally not prolonged. Regardless of the economic challenges, people still need to get to and from the islands, and they still need services once on those islands.

There will be destructive attempts to grab headlines and express anger at corporate and government sources of local frustration. (Anarchists burned two Starbucks in Athens. Other branches, realizing they were targeted, closed up shop.) But, as of this writing (August 2010), the violence is relatively easy to avoid. Unlike the frightening, random “suicide bombings” of marketplaces that we hear about in the Middle East, in Greece, any violence has been done with notice and generally at off-times — they’ll call the newspaper at 4 o’clock in the morning, just before they bomb an empty bank building (their target is the institution itself, not the people inside). And virtually all demonstrations or acts of violence have taken place solely within one small, high-profile area of central Athens, and have not affected the main tourist attractions (islands and ancient sites) elsewhere in Greece.

I had a great visit to Greece. Based on my mid-2010 experience on the ground in Athens and out in the islands, Greece is the same old place. My company is taking more tours through Greece then ever (our 2010 program is particularly hot), and they’re bringing home happy customers. The museums are still open. When I asked a Greek friend about his, she responded, “Why would we close the Acropolis? It would make no sense. Tourism is an important part of our economy. People pay to see it. That’s why they are here.”

In my mind, the biggest impact of the crisis on anyone considering visiting Greece is the satisfaction you’ll get from contributing to the economy of a nation dealing with tough times, and the joy that comes with a tourist industry that really appreciates your presence.

If there’s a positive outcome from all of this, it’s that Greece’s economic irresponsibility has inspired politicians and political movements across Europe to get real with their economics. In the US, throughout Europe, and elsewhere, the cautionary tale of Greece has sparked a sweeping realization that government pork, corporate corruption, and personal production relative to consumption needs to be re-calibrated.

As many American travelers are nervous about visiting Greece, I plan to put a version of this blog entry in the 2011 edition of my Athens guidebook. Please share your thoughts on this issue. What’s the impact of the crisis on tourism in Greece, and how should this impact our plans to travel there in 2011?

Comments

28 Replies to “Greece’s "Economic Crisis" and Its Effect on Travelers”

  1. I love considerate anarchists. There is just something so pragmatic about them. And they are effective at getting sympathy from people in other countries who are kindred spirits and who commiserate – if they are not directly affected. The French farmers like to shut down roads and throw rotten fruit. Spaniards rally and shout and block access to Madrid's government centre. Hooligans riot in Bradford. But we Americans are, to date anyway, more orderly. And we don't like it when we are spending hard earned dollars and our precious time and the Acropolis is blocked as indeed it was briefly this summer or the Greek ferry's are picketed and blocked. Or militant flight attendants strand us. But what we dislike and react to even more strongly is when malcontents start throwing rocks and burning buildings. We do not all turn the other cheek. We vote with our feet by going elsewhere or staying home. Even combat veterans won't expose women and children or elderly parents to these self-indulgent loose cannons. Let their own citizens rein them in or pay the price in lost tourism.

  2. A classmate of mine who lives in Paris most of the year but spends 3 months each summer in Greece just sent me the following note after returning from Greece in Sept 2010 – Quote: Bill, no unrest on the isles but various protests in Athens and rest of Greece. At one point the truckers went on strike causing fuel and other deliveries to be blocked. The government, in unusual actions, called in the military to run the trucks and threatened the drivers and owners with big fines or jail. This from a SOCIALIST government so things are perceived as critical regarding the economy and the need to follow IMF and EU strictures to qualify for bailout funds. Obviously difficult for the Greeks to find the right balance so the poor don't become poorer. End quote.

  3. "But we Americans are, to date anyway, more orderly." Really? Some of those Tea Party rallies didn't look very orderly. I guess you've forgotten the sixties, when cities burned. And weren't there problems with Union/anti-Union violence in the early 1900s? Not to mention the little matters of the Revolutionary and Civil Wars.

  4. Greece is a country in and of itself. It simply doesn't function exactly the way other countries do. I remember being there during the time of the colonels, the dictatorship, after King Constantine was deposed and fled the country. While the rest of the world looked on at the "shame and horror" of what was happening in Greece, most of the people were quite happy, because corruption had been done away with, bribes were no longer accepted and it was safe to walk on the streets of Athens at 2 a.m. And please spare me the comparisons with Hitler and Mussolini. It was not at all the same thing.

  5. It shouldn't impact the tourism in a major negative way. Hopefully, prices will fall and people will continue to come. The future brings many new projects, the Chinese are investing heavily in Greece, Pireaus will have a "new face" in the near future. Prices of hotels etc. will continue to fall and I assume many people will venture to Greece in late fall/winter to visit. Athens now has some of the best museums in Europe, excellent restaurants and great clubs which will foster Athens and environs as a winter destination. I hope you do an ipod for Athens, you could do a great walk in history including the "walkway of the Gods" including all the sites in the Acropolis ticket, from Kallimarmaro, Keramikos, Agora, Roman Agora etc and including the small museums and art galleries within walking distance of the pedestrian walkway. A metro tour, a modern art tour, a gallery tour etc..Within 5 years I see the renaissance of Athens continuing with major projects taking place and people will "pour into the city" p.s. I think the walkway and new Acropolis museum deserve 3 triangles in your book, so elegant…safe travels

  6. OMG! Totalian Socialists in Greece stomping on capitaliists rights. Can't the owners of trucks decide for themselves what days they want to work? And some people think this is good? Whatever happened to individual rights?

  7. Rick, Sorry, but in this instance, you have left out the April incident when 3 bank employees in Athens *were* killed in the rioting. http://news.bbc.co.uk/2/hi/8661385.stm As the UK's Telegraph newspaper put it, "Three Greek bank workers were killed when mobs of protesters set fire to buildings in Athens as demonstrations against 'austerity measures' turned to running battles in the streets." I agree that one can travel to Greece and stay out of trouble- just as one can travel to Paris, where I live, and stay out of the way of protesters [INVALID] but you have "rosied" up the picture a bit here. Respectfully, Kim B.

  8. Back to Rick Steves' original question. Greek citizens, through their own actions, will determine whether tourism can be sustained in 2010 – 2011 despite damaging images of insurrection broadcast around the world. And Rick Steves' urgent communications to merchants, tourism and government officials in Athens and other destinations in Greece about American hesitancy to visit should put pressure by the vast moderate majority on the radical element to not foul their own nest and kill the golden goose of tourism. Concerns about a possible boycott may be the most powerful incentive of all for Greeks to protect the most lucrative part of their economy.

  9. Kathy in her post on Tea Party unrest is simply wrong. As an attendee I can assure you that those protests were very orderly and well maintained (compare the trash left behind during the Obama inaguration with the cleanliness left by the Tea Party on 8/28). The riots of the 60's and mostly since then have been caused by extreme liberals who believe this is a legitimate form of protest.

  10. A version of Rick's blog in his 2011 guidebook is probably in keeping with his business model of transparency. Some will interpret it as a disclaimer. Greece would do well to realize that American tourists need reassurances they will be safe. If Greek culture and govt and temperament encourages and embraces unruly protests which threaten life and limb, they will be be playing lots of solitaire.

  11. Right. Those town hall meetings last year were SO sedate. All those idiots screeching about "death panels" and "government take-over of Medicare". And I suppose next you'll be telling me that McVeigh was a flaming liberal.

  12. Rick, Please do go for the New Year and see the "passion" of this fascinating city..what a great chapter it would make in your book. Compare/contrast between the summer vs. off-season Athens, your thoughts would make for very interesting reading.

  13. Rick, Please do go for the New Year and see the "passion" of this fascinating city..what a great chapter it would make in your book. Compare/contrast between the summer vs. off-season Athens, your thoughts would make for very interesting reading.

  14. "What we have here is a failure to communicate" said Paul Newman in the film HUD. It's what happens when we preface strong and opposing opinions with the word "you" in the pejorative sense of the word. To paraphrase Upton Sinclair, it is difficult to get a man to understand something when his salary or other agendas depend upon him not understanding it. I guess our own beliefs will always trump willingness to give any credence to an opposing point of view. It's the human condition. But the Rick Steves' blog seldom deteriorates into mud slinging even tho we all see the world thru a prism of our own experiences. Maybe that's why travel is broadening.

  15. Oops!!! Mea culpa. That Paul Newman quote above actually came from the 1963 film Cool Hand Luke. But Hud (1967) has another one which evokes thoughts of highly opinionated people on the RS blog site – "he quotes Scripture like he wrote it"

  16. Townhall meetings were and are not Tea Party rallies and are not connected. Medicare cannot be taken over by the government as it already is a government program. McVeigh had nothing to do with any political party I am aware of and only represented crazy anti government thought. Finally the "death panels" that are so denigrated is simply a name given to a proposed government committee to evaluate the cost benefit of any medical procedure. As this would effect seniors more than any other group they were expressing their outrage over the program contained in the Obama health care legislagation.

  17. I think the point was being made (re: government take over of Medicare) about the disconnect with reality that many opponents of health carte reformed exhibited. Note signs that said: "Keep the Government's Hands Off My Medicare." It is true town hall meetings are not rallies, but many of the protesters at the town hall meeting held by Sens and Reps were self identified as Tea Party people. Death Panels is only a name? Check Sen Grassley's comments about killing Grandma. How does one person get to all the Tea Party rallies? Doesn't it involve a great deal of travel in a very short amount of time, especially when there are rallies thousands of miles apart on the same day? Thank you for not claiming McVeigh was a liberal. Is it fair to point out he called himself a Christian? Call we label him a Christian Terrorist? What do we say to people of other countries who see McVeigh as representative of all Christians? Are these people much different than those who see the Sept 11 Terrorists as representative of all Muslims?

  18. Thank you Mike. May I safely assume you have a similar response to people who lump all Muslims with the Terrorists of Sept 11? Note I wrote he called himself a Christian; I did not write he acted as one. Indeed, he did not act in a Christian manner, in my opinion. The author of the cited article wrote that McVeigh's actions were not those of a virtuous believer [of Christianity]; can it be said, or writen, the actions of the Terrorists of Sept 11 were not those of virtuous believers of Islam? Why do so many Christians who object to being lumped with McVeigh have no qualms about lumping all Muslims with the Sept 11 Terrorists?

  19. I am an American traveling in Greece now and have been here since August 20th. Greece, to a tourist, is completely unaffected by any protests that went on earlier this summer in Athens. we have been able to travel all over the Mainland, including to the Meteora and by train from Athens to Pireaus to catch ships to Crete and Santorini. The only sign that something might be different from when we were here in 2007 is the police are stationed on the highways out of the big cities. We took a bus to Patra and did see police until we got about 30km out of the city. NO SIGN OF ANY TROUBLE It has been incredible. No crowds, beautiful weather and cheap food and wine. The best bargain in Europe right now. We head to Delphi and Olympia and are having the vacation of our dreams. Silly scared Americans like Bill Kester are missing out….

  20. Ari…. the reason I suggested you read the article was that McVeigh NEVER called himself a Christian, but YOU DID CALL HIM ONE. As for the remainder of your point, I do not believe that all Muslims are terrorists, however I wish that more of them would denounce the acts of the few that are….. just as the Christian community is denouncing the burning of the Koran by the rogue pastor in Florida!

  21. RICK, I agree completely that the "troubles" in Greece have been somewhat exaggerated by the media. Except for that one tragic incident where three people died in a Bank, the demonstrations don't seem to have caused any significant problems, and as you noted the strikes are usually of a limited duration. I share your philosophy on some of the points mentioned in your Blog. It was also important for me to "see for myself the truth". I don't usually let media reports influence my travel plans (although I do consider them in the planning), and tend to make my own decisions rather than "following the herd". To provide an example of the media reporting, on returning to Athens at the end of the tour, the group was told that central Athens was in chaos due to a large demonstration. After dropping my Packs at the Hotel, I immediately took the Metro to Syntagma Square and found that NOTHING was happening – it was business as usual! Prior to the trip, I was asked COUNTLESS TIMES by family and friends, "aren't you nervous about going to Greece"? I told them I wasn't concerned in the least! I decided this would be a perfect time to visit Greece, and I'm *definitely* one of the "happy customers" who enjoyed visiting there on one of your tours this year. As well as the tour portion of Athens and the Pelopponese, I visited two of the islands on my own afterwards, and experienced no problems whatsoever! Greece was fantastic and of course the weather was great! I also agree with you that it's important at this time to be "one of those "contributing to the economy of a nation dealing with tough times". However, due to an "unfortunate Camera problem" in Athens, I ended up contributing somewhat more to their economy than I planned to. Demonstrations or not, I would have no hesitation in returning to Greece!

  22. We were in Greece in July during the truckers strike. We did see some demonstrations near Syntagma Square but they appeared minor, we walked around the other side of the square and stayed out of their way. The truckers strike posed some problems as the gas stations ran out of petrol and our tour bus actually ran out of petrol also! We saw trucks parked alongside the highways and some stores were running low on supplies by our last days there. We had a wonderful two weeks and were suprised by the lack of huge groups of tourists that we had feared, going in "high season". The Greeks said tourism is really down this year, most people afraid to travel due to the news that is being broadcast. Our tour bus that I expected to be full had only 10 people on our 5-day tour! We were in Crete and around the Peloponnese, then to Meteora. I was suprised by the cost of things there, prices were much higher than I expected, especially in restaurants. We definitely did not budget for the high cost of meals. I'm glad we went, and glad there weren't so many tourists. I would love to go back anytime without hesitation, but maybe next time in the fall when it's not so hot!

  23. I guess the phones were down when the 3 people were killed in the bank bombing a few months ago. I am pleasantly shocked by your admission that government overspending is a problem. I reluctantly cancelled my trip to Greece because although I did not think I would become a victim of violence, (probably more danger at your local Starbucks)I could not afford "a day or two" of disruption to my schedule. On limited funds and time I cannot afford to risk my only lifetime 48 hours in Athens.

  24. I saw a video where you sopke of a cheap travel agency for discounted flights in Syntagma Square, Athens. Could you provide a name of one for me please? Thanks.

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