The interruption of tourist flows from Russia and Ukraine is estimated to have very little effect on the viability of tourism businesses.
Research on its effects war in Ukraine in Greek businesses and tourism, was carried out by the Central Union of Chambers of Greece (KEEE) in collaboration with Palmos Analysis.
There is a sharp drop in import and export activity with Russia and Ukraine. Companies are looking for alternative countries and routes for their products, while there is a tendency to increase prices, above the current inflation levels. The risk of “hard consequences” such as layoffs and suspensions is limited.
In tourism, the research estimates that stopping tourist flows from Russia and Ukraine will have very little effect on the viability of tourism businesses. Entrepreneurs expect to make up for any of their losses, through other foreign markets as well as the internal market. There is a significant increase in the operating costs of tourist businesses and therefore an increase in prices is expected.
Especially for Russian tourists of a higher socio-economic class, the survey says that a significant decrease in arrivals is expected due to the war which will hit European Mediterranean countries, including Greece.
See the survey here
Detailed research findings
Trade with Russia/Ukraine: There is a sharp drop in import and export activity in relation to the two warring countries with an emphasis on the problems in Northern Greece and in specific sectors of activity. However, the risk of “harsh” consequences, such as layoffs, suspension of operations, etc., is limited and is mainly found in very small businesses and in specific industries. In order to deal with the situation, businesses with import/export activity with Russia/Ukraine are proceeding to look for alternative countries or alternative routes/modes for importing/exporting products or channeling their products to the domestic market. At the same time, there is an order of increase in the prices of their products above the levels of current inflation to deal with the increased costs, due to the large increases in the costs of energy and raw materials, etc. Finally, subsidizing the cost of energy is the most popular support measure from the State, according to the businesses that participated in the survey, followed by the suspension of tax/insurance obligations (mainly among very small businesses).
Tourist businesses in areas with a presence of Russian/Ukrainian tourists: In general, the participation of Russian/Ukrainian tourists in the customer base of tourism businesses is small and very little impact on the viability of tourism businesses is expected from the interruption of the tourist flow from the two warring countries. Already, tourism businesses expect to make up for any losses, by targeting other foreign markets, but also the domestic market, while they estimate that there will be a restoration of the flow of tourists from Russia/Ukraine, once the war conflict ends, from the very next season . At the same time, there is a significant increase in operating costs for tourism businesses, as a result of which an increase in the prices of their services is expected, slightly above the current inflation levels, to deal with increased costs of energy and raw materials, etc. However, the price increase trends appear milder in accommodation and tourist offices, due to “locked” agreements. Finally, the energy cost subsidy is recorded here as the most popular support measure from the State.
Russian tourists abroad: These are people of a higher socio-economic class. The safety of the destination, the value for money and the “sun & sea” are the main criteria for choosing a holiday destination abroad, while Russia’s relations with the destination country are rated much lower. They organize their holidays abroad mainly through tourist offices and Greece is among the most popular destinations abroad for their holidays. There is expected to be a significant reduction in the flow of Russian tourists abroad due to the war and the impact of the reduced flows during this season seems to be mainly in the European countries of the Mediterranean, including Greece. In the medium-long term, however, there is so far no serious impact on the image of Greece as a tourist destination from the deterioration of relations between the two countries due to the war.
The identity of the research
The research was conducted nationwide, in the period May-June 2022, through telephone and online interviews with owners/managers of 155 businesses with transactions with Russia and Ukraine, through telephone interviews with owners/managers of 331 tourism businesses, using the CATI systems (Computer Assisted Telephone Interviewing) and CAWI (Computer Assisted Web Interviewing). Additionally, “in-depth interviews” were conducted with 15 representatives of Ministries, Agencies & Organizations, while in the period 8-13/6/2022 an online survey was conducted (through structured online panels using the CAWI system) on 407 Russian citizens, residents of major Russian cities, vacationing abroad.
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