We are all subject to the lockdown which was induced by the COVID-19 Pandemic within the UK. Similarly, European consumers and households have also experienced national lockdowns forcing them to stay within their countries.
This long period of low confidence has led to record savings over the lockdown period. So, now that confidence is ramping up with increased vaccine rollouts, households and consumers are eager to splash their lockdown savings.
One good which consumers will use their savings on are foreign holidays, they help households relax, meaning that once they come back they will be rejuvenated and ready to enter back to the workforce more productive as they feel more relaxed and fulfilled.
Robert Maran, a French tourist from Lyon, said that: "It's freedom, enjoying life, you really feel much better. You're not in prison anymore, you're free and that really does you good."
Consequently, as tourism has seen increased demand, Corfu, a Greek island, saw its first cruise ship arrive, on Tuesday ahead of the new season.
According to port authorities, the vessel had 600 eager tourists from European nations such as Germany, Italy and France, who were reportedly welcomed aboard the Costa Luminosa.
Eager passengers expressed their delight for being able to travel, Reuters reports, and, the ship owners likely celebrated too as their firm will now begin to see a new surge of the demand as demand from tourists begins to flood their services.
This is essential as tourism-based firms, which are mainly cash in hand businesses, have seen a massive reduction in cash inflows during the lockdown period. Now that the lockdown is over, these firms can now begin to recoup their losses, thus helping them to stay afloat, securing the firm’s stability and its worker’s jobs.
The arrival of these tourists was mainly due to the fact that Greece had opened its borders early by allowing nations from the UK and EU, Germany, France, Italy etc. to come to the nation if individuals have tested negative for COVID-19.
This is so that Greece does not see worsening public health as the nation attempts to reignite its important tourist industry.
Private firms have also prioritised public health with extra safety precautions being taken on board ships and other forms of transport such as social distancing measures and reduced passengers to reduce the chance of another COVID-19 breakout.
It is in the best interest of these firms to prioritise public health measures, if they don’t, another wave may soon come and they will once again be left to the mercy of a national lockdown and their remaining cash reserves.
Additionally, Greece hugely benefits from this ordeal. Due to Greece being a nation rich with history with cities such as Athens, tourism is one of its primary industries.
So, taking in happy, healthy and wealthy tourists, who will splash their cash on Greece’s goods are great for the nation’s economy as Greek exports rise due to an increase in tourism, thus injecting cash into the economy.
Therefore, due to exports being a component of net trade which is part of aggregate demand when tourism rises, Greek sees an increase in economic growth as aggregate demand also expands.
This expansion in aggregate demand will set the ball rolling for Greece’s economy once again as the Greek government will see extra tax from sources such as VAT as the rising output from tourism means there are more transactions occurring within the economy.
Consequently, this is very beneficial for Greece’s government as it will see an increase in the size of its budget, enabling them to slowly pay back more of their debts which are 205% of the nations GDP, according to TradingEconomics.
Paying back this debt will let Greece get back on track to potentially stabilising its economy as the nation has recently been subjected to economic and political turmoil due to the amount of money the nation owes.
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Written by Hubert Kucharski
Research compiled by Jonas Theaker and Billy Ryan