Vacation bookings for Greece have slumped by 50 percent since the election on May 6 plunged the country into political uncertainty, George Drakopoulos, the director general of the association of Greek tourism enterprises (SETE), has said.
"Hotels make appealing offers, but that is not the issue here. For many of the tourists visiting Greece, it is a matter of security on top of value for money," Drakopoulus said, AFP reported.
This comes after a particularly profitable 2011 season, where Greece benefited from the unrest in the northern Africa which prompted many tourists to opt for Greece .
According to SETE, tourism represents 15.7 percent of Greece's output and employs 768,000 people, either directly and indirectly.
Panagiotis Moriatis, president of the association of hotel owners of the resort of Nafplion near the Bronze Age site of Mycenae, said business this year could drop by up to 15 percent. "Foreign media only portray the troubles in Athens and show nothing of the rest of Greece, where conditions are the exact opposite," said Moriatis.
Tourism experts say many German tourists are staying away for fear that they might encounter local anger at Germans given that Chancellor Angela Merkel is widely blamed in Greece for the painful austerity measures imposed in return for international aid.
Anti-German Sentiment Deterring German Tourists
Many Germans may have been shocked at news footage showing demonstrators in Athens burning German flags or carrying placards depicting Merkel in a Nazi uniform.
Moriatis said bookings had fallen by 25 to 30 percent since the start of the year.
German package holiday operators confirm the trend. The tourism director of Thomas Cook, Michael Tenzer, told the Euro am Sonntag newspaper that German bookings at the start of the summer season were down 30 percent from last year.
He said images of violent demonstrators were keeping tourists away, even though the situation was peaceful in holiday destinations such as Crete and Rhodes.
Industry leader TUI cut its prices for Greek holidays by 10 percent at the start of the season. Demand had increased a little since the International Tourism Fair in Berlin in March but the upturn came to a halt following the renewed debate about a Greek euro exit following the Greek election, spokeswoman Anja Braun told SPIEGEL ONLINE.
However, the German Travel Association estimates that the number of German tourists visiting Greece this year won't be very different from last year's 2.5 million.
While French bookings for Greece have also fallen sharply -- by 30 percent for this summer -- bookings from Britain, Italy and Austria have been stable, say tour operators.
Peter Voigt, a professor for tourism at the Munich University of Applied Sciences, said a return to the drachma could allow tour operators to benefit from declining costs due to the likely sharp depreciation of the new Greek currency against the euro.
However, holidaymakers could take a hit if inflation soars, he added, pointing to the example of Argentina, where the price of a cup of coffee reached $15 during the crisis there over a decade ago.