New bank lending to accommodation and food service businesses averaged €1.22bn a year over the past five years, reflecting increased capital flows to a sector that has attracted significant investment in recent years.
The share of accommodation and food services in total new bank lending rose from 8.9% in 2020 to 15% in 2025.
The role of the banking system in the development and qualitative transformation of Greek tourism was highlighted by Dr Tasos Anastasatos (pictured), Eurobank Group’s chief economist and chairman of the Coordinating Committee for Economic Analysis and Outlook of the banking sector at the Hellenic Bank Association, during the presentation of a new study by the Institute of the Association of Greek Tourism Enterprises (INSETE), entitled “Greek Tourism: Achievements, Challenges, Prospects”.
“In recent years, the tourism sector has not simply increased its investment in absolute terms. It has also increased its share of total investment in the economy. The share of accommodation and food services in the economy’s total gross fixed capital formation has risen from 1.52% in 1995 to 3.26% in 2024.
Over the past decade, it has averaged around 3.7%, more than doubling. Strategic investments in tourism totalled about €6.2bn over the 2012-2026 period,” he said, among other things.
As for total borrowing, outstanding bank loans to accommodation and food service businesses stood at €10bn in 2025, more than double the €4.6bn recorded in 2016, and reached €10.9bn in August 2026.
As T. Anastasatos noted, tourism’s growth in recent years was not confined to an increase in investment volumes; it was also accompanied by a significant qualitative upgrading of hotel capacity, with five-star establishments accounting for a larger share of both the number of hotels and total bed capacity.
“Between 2004 and 2025, the number of five-star hotels increased 6.3-fold, while their share of all hotel establishments rose from 1.6% to 8.6%. Their share of total hotel beds, meanwhile, increased from 7.8% to 26%. Greek tourism is therefore becoming more high-quality over time. The Greek banking system has supported this progress,” he said.
However, he said, the next phase of growth cannot rely solely on attracting more visitors. “The overarching priority is to transform the model by increasing value per visit. To achieve that, we need a major shift in our investment priorities: more investment in private tourism infrastructure, as well as in public infrastructure that can support high-quality tourism.
“In a country that was starved of investment in recent years, we welcomed all investment. From now on, however, priority should go to investment that creates new productive infrastructure — greenfield investment — rather than acquisitions,” he added.
€5bn in tourism investment
The findings of the INSETE study also confirm the sector’s momentum. Investment in Greek tourism reached €5bn in 2025, with domestic value added estimated at about 50%.
According to the same study, tourism’s direct contribution amounts to 13% of GDP, while the multiplier effect of tourism activity is estimated at between 2.2 and 2.6, highlighting the sector’s links with a broad range of economic activities.
INSETE data also show that tourism offsets 70% of the goods trade deficit, underlining the importance of travel receipts to the economy’s external balance.
During the presentation of the study, SETE president Agapi Sbokou said tourism had become a core part of the country’s productive model and a catalyst for its evolution.
“Tourism is entering a new cycle. The goal is not simply to grow in numbers, but to create greater, lasting value for businesses, workers, destinations, local communities and the country as a whole,” she said.
In this context, she placed particular emphasis on the need to raise productivity both in tourism itself and in the sectors linked to it.
Concentration in five regions
Despite its significant economic contribution, Greek tourism remains marked by pronounced geographical concentration and seasonality. As much as 90% of overnight stays are concentrated in just five regions, while the other eight account for only 10%. The pattern is similar for tourism revenue, with the same five regions accounting for 90% of the total.
This uneven distribution highlights the potential to develop tourism in more parts of the country, as well as the need for investment in infrastructure and products that would spread demand more widely across the regions.
Seasonality also remains pronounced. In the third quarter of 2025, 53% of all overnight stays were recorded, compared with just 6% in the first quarter.
The tax burden on hotels
Tourism businesses also face the challenge of taxation. According to the INSETE study, the tax burden has a greater impact on establishments without a strong competitive advantage and with limited scope to pass the additional cost on to their customers.
Notably, according to a study of tax competitiveness by INSETE and PwC, the tax burden is associated with 38.4% lower earnings before interest, taxes, depreciation and amortisation (EBITDA) than in Cyprus, in the case of hotels unable to pass the additional cost on through their prices.
Greece ranks fifth among seven competing Mediterranean countries for tourism tax competitiveness, while it ranks third in broader tax competitiveness.
The climate crisis resilience fee adds to the burden. The study notes that receipts from the fee amount to about 4% of hotel turnover.
14% of tourism jobs remain unfilled
Meeting the sector’s staffing needs is also a significant challenge, despite its major contribution to employment. According to the INSETE study, 14% of tourism jobs remained unfilled in 2025, while employment in accommodation and food services reached 475,000 in the third quarter, accounting for 17% of total employment.
Only 24% of hotel workers, meanwhile, have graduated from tourism schools, pointing to scope for greater investment in education and training.
Elena Gina-Petroulaki, chief people officer at Costa Navarino, also spoke of the need to make tourism a meaningful career choice rather than simply seasonal work, highlighting the importance of job security, working conditions and opportunities for career development.
Tourism as a counterweight to demographic decline
Fai Makantasi, research director at diaNEOsis, highlighted another aspect of tourism development: its role in retaining population and sustaining economic activity in the regions.
She said it was particularly notable that births outnumber deaths in five areas with significant tourism activity — Santorini, Mykonos, Kos, Naxos and Rethymno — at a time when the country is facing a serious demographic problem.
In the same vein, data presented as part of the INSETE study showed that the South Aegean and Crete were the only two regions to record population growth between the 2011 and 2021 censuses, in contrast with the broader trend of population decline across the country.
The population of the South Aegean grew by 6.1% and Crete’s by 0.2%, while Greece as a whole recorded a 3.1% decline. Population losses in the other regions reached as much as 10.3%.
According to F. Makantasi, these figures highlight tourism’s potential to counter demographic pressures by creating jobs and economic activity that can help keep people in the regions.