Crisis Hits Greek Tourism as Cancellations Soar

May 25, 2010— -- The Greek tourism industry, which was hoped to contribute to the country's recovery, is in crisis. Hundreds of hotels are for sale, and visitor numbers are in sharp decline. The cash-strapped government is hardly in a position to help.

The season got off to a late start this year. It is mid-May, there is bright sunshine in the skies over Greece, and Dimitris Fassoulakis is standing on the abandoned terrace of his hotel on the southern coast of Crete. The lobby and the restaurant are empty, and there is no one in the pool. "Pick a spot," says the manager, spreading his arms widely.

Fassoulakis's bungalows complex Valley Village, which is located on the green outskirts of Matala, a former hippie bastion, has 70 rooms and more than 200 beds, only eight of which are occupied at the moment. The vacation season in Crete normally begins in early April, sometimes even at the end of March. But this year the hotelier has only just opened his doors, with 50 of the 210 days in the season already gone before it has even begun.

"Owning a hotel is no longer a good business," says Fassoulakis. He is now 41, his father Manolis built the complex and his two brothers are also involved in the business. If this weren't the case, he would have sold it a long time ago.

Only last year, Fassoulakis began renovation work, hired architects and obtained building permits. But now he lacks the funds to proceed, and loans are no longer being approved. "How are we supposed to continue?" he asks. The coming high season doesn't bode well, either, with only 50 percent of rooms already booked -- in the middle of the summer vacation period.

"You see the crisis and you hear it," says another hotelier. "Normally there's a lot of activity and noise on the street at this time of day." Instead, one can hear the birds singing. It's summer in Greece, and the tourists are staying away.