Greece cracks down on excessive tourism

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Greece has said it will crack down on short-term holiday rentals and cruise ship traffic as part of a set of measures to curb excessive tourism in the Mediterranean country.

But industry leaders warned the restrictions could harm a crucial economic sector at a time when Greece is on track to report a record number of visitors for the year.

“Tourism supports the economy with resources and jobs, but it must also pay its special share of social returns,” Prime Minister Kyriakos Mitsotakis said in announcing the measures late on Saturday at a trade fair in Thessaloniki, Greece’s second-biggest city.

Concerns have grown in Mediterranean countries such as Spain, Italy and Greece about the damage to local communities and the environment caused by surging visitor numbers and light regulation.

But tourism minister Olga Kefalogianni told the Financial Times: “There is no overtourism in Greece. What we’re seeing is overconcentration in specific areas during peak periods.”

Kefalogianni said the country must now look to balance tourism-fuelled growth while protecting its cultural and natural heritage and ensuring local wellbeing.

Economists estimate that tourism contributes more than 25 per cent to Greek gross domestic product, and Mitsotakis insisted it would continue to play a driving role in the country’s economy.

“It is very dangerous to present Greece as a place that is not welcoming to tourists,” he said on Sunday.

Mitsotakis announced the introduction of a fee of up to €20 for cruise ship passengers to the most popular islands such as Santorini and Mykonos. During the summer months multiple ships, some carrying thousands of visitors, dock every day at the most popular destinations.

George Koubenas, chair of Greece’s Union of Cruise Ship Owners, said the move unfairly targeted cruise ship passengers. “Cruise visitors don’t use local infrastructure like water and electricity to the same extent as other tourists,” Koubenas said, suggesting that a flat fee for all tourists, like that levied in Italian cities such as Venice, would be fairer.

Koubenas suggested that local communities should set clear limits on arrivals, with a well-defined allocation system for cruise ships to manage flows at small island ports.

Following similar limits imposed in Spain, Greece is also taking steps to regulate short-term rentals via online platforms such as Airbnb. Mitsotakis announced a one-year ban on new short-term rentals in three areas of Athens. Tourists often start or finish their holiday in the historic Greek capital before moving on to an island destination.

Andreas Chiou, president of the Greek Property Managers Association, said the ban was driven by pressure from hotel owners who viewed short-term rentals as a competitive threat. “There is no oversaturation of the market due to short-term leases,” he said.

He also criticised another new measure incentivising property owners to switch to long-term rentals that includes a three-year exemption.

“How can property owners, who renovated their homes for short-term rentals, make a profit on long-term leases?” Chiou asked, warning that owners could stop using official platforms to promote their properties, as has happened in cities such as New York.

A report by Grant Thornton for Greece’s Chamber of Hotels showed holiday rentals increased 28 per cent between 2019 and 2023, with available properties doubling in that period. Hotel bed availability, by contrast, increased just 3.5 per cent. Chiou said short-term rentals accounted for only 2 per cent of the overall rental market in Athens, citing his own association’s data.

Mitsotakis also announced that a climate crisis tax would be levied on hotel stays and short-term rentals from April to October, with revenues directed towards improving infrastructure in tourist areas.

“A significant portion of the revenue will go back to local communities, allowing them to better prepare for the burden they face each summer,” Mitsotakis said.

Italy recently proposed increasing tourist taxes to promote responsible travel. Its new proposals could see tourists pay a fee of up to €25 a night for luxury accommodation.

Yiannis Paraschis, president of the Greek Tourism Confederation, said imposing fees could make Greece less competitive as its tourism industry is still recovering from the economic crisis a decade ago and the coronavirus pandemic.

“We must be more cautious than our Mediterranean rivals,” Paraschis warned. “In Greece, tourism is vital to our economy in a way it isn’t for other countries.”

In 2023, the country welcomed a record 36.1mn visitors, and in the first half of 2024, tourist arrivals surged by 16 per cent to 11.6mn, according to the Bank of Greece, putting it on course for a record number of visitors this year.