Sunday, September 8, 2024 Greek PM Mitsotakis announces measures to tackle overtourism, cruise fees, short-term rental bans, and tax incentives, ensuring sustainable growth and housing relief. In response to unprecedented growth in the tourism sector and rising concerns about the negative consequences of overtourism, Greek Prime Minister Kyriakos Mitsotakis announced a series of decisive measures aimed at managing visitor numbers and mitigating the impact of the booming tourism industry. As Greece continues to experience record-breaking tourist arrivals in the post-pandemic era, the government is taking action to ensure that the tourism sector remains sustainable, while addressing critical issues such as housing shortages and environmental stress.
During his annual address at the Thessaloniki International Fair , Mitsotakis emphasized the need for immediate intervention to regulate the inflow of tourists, especially cruise passengers, who contribute to seasonal overcrowding in key destinations. The Greek government plans to introduce new fees for all passengers arriving at ports, with higher charges on the most popular islands like Santorini and Mykonos . This move is part of a broader effort to alleviate the pressure on local communities and infrastructure that have been increasingly overwhelmed by the influx of visitors during peak months.
Greece’s tourism sector is a cornerstone of its economy, accounting for around 20% of the country’s GDP. In 2023, Greece attracted a record 36.1 million visitors , underscoring the importance of the industry to the nation’s financial health.
In the first half of 2024 alone, arrivals surged by 16%, reaching 11.6 million visitors, according to data from the Bank of Greece . However, this growth has come with challenges, particularly in managing the high concentration of tourists during certain times of the year and in specific locations.
To address the situation, the government is implementing a climate crisis-related tax on accommodations, with revenue earmarked to support local communities that bear the brunt of tourist numbers. This tax will be applied seasonally from April to October , when tourism peaks, and aims to offset the environmental impact of high visitor numbers while contributing to the long-term sustainability of Greece’s tourism infrastructure. In addition to managing overtourism, the Greek government is also focusing on attracting foreign investment through the expansion of its “Golden Visa” program .
Previously, this initiative required foreign nationals to invest in Greek real estate to obtain a residency permit. However, under the new measures, individuals will now be able to secure a visa by investing a minimum of €250,000 ($277,000) into local startups , broadening the scope of the program and encouraging economic diversification beyond the real estate market. This shift is expected to increase investment in Greek businesses and contribute to the country’s long-term economic growth, while also addressing concerns that the original version of the program was contributing to a speculative property market that has worsened housing affordability issues.
One of the most pressing issues facing Greece today is its housing crisis, exacerbated by the surge in short-term rental properties through platforms like Airbnb. In recent years, the availability of short-term rentals has increased dramatically, outpacing the growth of hotel accommodations. From 2019 to 2023, short-term rentals expanded at an annual rate of 28% , while traditional hotel accommodations grew by just 3.
5% , according to a report by Grant Thornton for Greece’s Chamber of Hotels . To curb this trend and protect long-term housing availability for local residents, the Greek government is introducing a one-year ban on new short-term rental properties in three key areas of Athens . Furthermore, property owners who switch from short-term to long-term rentals will be exempt from paying rental taxes for a period of three years.
This tax incentive is designed to encourage landlords to make more housing available to residents, helping to alleviate the housing crisis in high-demand urban areas. Mitsotakis explained that this move is part of a broader effort to balance the needs of the tourism industry with the welfare of local communities, as the unchecked growth of short-term rentals has significantly contributed to rising housing costs and scarcity in some parts of the country. Beyond tourism and housing, the Greek government is taking steps to address broader economic challenges, particularly the rising cost of living.
During his speech, Mitsotakis announced several measures aimed at supporting Greek citizens through a combination of tax reliefs, wage increases, and adjustments to social benefits. Among the key initiatives: In addition to these wage-related measures, Mitsotakis unveiled a €2 billion mortgage relief program aimed at reducing interest rates on housing loans. This initiative is expected to provide significant financial relief to Greek homeowners, particularly those who are struggling with high mortgage payments due to rising interest rates.
One of the most significant announcements made by Prime Minister Mitsotakis was the government’s intention to introduce restrictions on the number of cruise ships allowed to dock at the country’s most popular tourist destinations. Starting in 2025, these restrictions will be implemented to manage the growing strain on local environments and infrastructure caused by large cruise ships and their passengers. Cruise tourism has been a major driver of overtourism in Greece, particularly in iconic destinations like Santorini and Mykonos , where the sheer number of visitors during the peak season has raised concerns about environmental degradation and the sustainability of local economies.
By limiting the number of cruise ships, the government aims to protect these areas while ensuring that tourism remains a vital contributor to the national economy. Despite the challenges posed by overtourism, rising costs of living, and the housing crisis, Greece remains committed to fiscal responsibility. The government has pledged to achieve a primary budget surplus — a measure of the country’s financial health that excludes interest payments on public debt — of 2.
1% of GDP for both 2024 and 2025. This target is up from the 1.9% surplus recorded in 2023 and reflects the country’s ongoing commitment to maintaining fiscal discipline.
Maintaining this surplus is crucial for Greece as it seeks to solidify its return to investment-grade status following years of economic hardship and financial instability. In 2023, ratings agencies upgraded Greece’s credit rating to investment grade for the first time in more than a decade, citing the country’s prudent budget management and economic reforms as key drivers of this positive development. As Greece navigates the challenges and opportunities of its booming tourism sector, Prime Minister Kyriakos Mitsotakis’s government is taking bold steps to ensure that growth remains sustainable and beneficial for both the economy and local communities.
From addressing the negative impacts of overtourism through fees and restrictions on cruise passengers, to tackling the housing crisis with new rental regulations and tax incentives, the government’s comprehensive approach seeks to balance the needs of the tourism industry with the well-being of Greek citizens. By implementing these measures, Greece is positioning itself to remain a top global travel destination while ensuring that the benefits of tourism are shared equitably and that the country’s natural and cultural heritage is preserved for future generations..
