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It’s actually a good time to see Athens and the rest of Greece’s famed destinations.
Greece’s potential exit from the Eurozone has economists and policy makers preparing for potential shockwaves that could move through world markets, but also raises questions for the summer traveler. We went to Christos Stergiou, a Stanford-educated economist turned Greece travel specialist (he’s the founder of TrueGreece and is one of Wendy Perrin’s top-rated specialists), to explain the situation on the ground, how to prepare for a worst-case scenario, and why now is actually the best time to book a Greek getaway.
Give us an update. What are the biggest concerns in Greece right now?
Last time we talked [in January], we were more focused on riots and strikes; they are no longer the issue. Strikes are extremely rare, and typically instigated by political forces. So basically, pre- and post-elections, people are concerned with which party is going to be ruling the country and not necessarily with strikes. This is traditional in Greece.
In terms of riots, the last riots took place when the austerity measures were voted in months ago. There was a big splash in the media about fires in Athens, etc. My same position holds that if you’re not in the ten blocks of the city where the riots take place, you’re not affected. And again, if you book your travel through a specialist, we know about the strikes and riots in advance.
The big issues right now are that Greeks, policy makers, and travelers are worried about Greece leaving the Eurozone and switching to the drachma, potential political instability, and what that would mean if they were there on the ground; for example, if there was a bank run.
Are bank runs a big concern?
During the height of international media coverage of a potential bank run in Greece mid-May, I went after hours at night to an ATM, and I withdrew 2,000 Euros. I would not have been able to do that if things were as bad as the media made it seem. The European Central Bank continues to support the Greek banking system.
The biggest concern is what would happen if the EU ceased to finance the Greek government; if the recapitalization of Greek banks didn’t go through as planned. These are the problems to focus on right now. Despite political adversity, I remain optimistic on the final outcome.
Do you think that Greece will leave the eurozone?
I don’t think Greece would willingly pull out; I think Greece could be forced to pull out by an unexpected unraveling of economic forces. Polls say that 80 percent of Greeks want to be on the euro and the Europeans continue to affirm the same. A Greek exit didn’t use to be on the agenda. When someone asked if Greece would leave the euro, the answer was no. Right now, potentially, it’s an outcome that could unravel, although neither the Europeans nor the Greeks want it. When two parties do not wish for a certain outcome, common sense dictates that this particular outcome is not likely to unfold.
That said, if the so called “Grexit” were to happen, the overwhelming majority of economists fear that there will be a domino effect. Things might unravel in a cataclysmic way in Europe and the global markets, much like what happened in the Lehman Brothers default crisis. That’s the reason why no one really wants Greece to be forced to pull out, and that’s why I remain optimistic. Despite the world preparing for such an outcome, I remain optimistic that it won’t happen, because all parties involved, and Greeks are no exception, realize what it would mean for Greece to switch to the drachma.
How likely is that transition to the drachma?
I cannot predict the future, but I can say that I don’t foresee these situations unraveling over night, if at all. Even if we were to switch to the drachma, would that happen overnight? It would actually involve months of transition and planning. All involved parties are going to have to figure out what happens to the rest of Europe.
Is there anything people traveling to Greece can do to prepare?
As a precautionary measure, my advice is for people to have money with them, cash in euros. Only as a precaution, so they don’t have to rely on ATMs for cash. Travelers should also have their foreign credit cards with them. Even in the unlikely scenario of a bank run while travelers are in Greece, the euro will still exist. If you have euros on you, you don’t have to rely on the bank.
What’s going on with elections?
Elections will be held on June 17. On May 6, the outcome of the elections did not result in the formation of a government. According to the constitution, after a certain number of efforts are undertaken, if there’s still no formation of government, a temporary government is formed and immediate elections announced. That temporary government is in place right now. After the June elections, there will be another effort to form a coalition government. And hopefully once that happens, if a government is formed and discussions with the Europeans are again put into play, I think that’s when we’ll see a surge in bookings. During this one month until election time, there’s going to be even greater value for travel to Greece. Because of the uncertainty, the demand is dropping, so hotels are taking an extra leap on the already amazing value.
Tell us more about these deals. How has travel to Greece been affected?
We haven’t had significant cancellations, but we have seen a decrease in the demand for bookings. People should think of the Greek islands as a great deal right now—it’s hit rock bottom in terms of prices. And the value offered is incredible. The experience is going to be even more private since there will be fewer arrivals. Because of that you’ll have better service with great staff to guest ratios. All the hotels are running as normal—life continues. In terms of value and experience, looking at what someone would get in 2012 compared to 2007, for example, it’s incomparable. When I book a trip for the beginning of June, it’s about 50 percent less compared to the same trip in 2011. Additionally, the dollar is considerably stronger vis-à-vis the Euro and this exchange rate movement creates even greater value for the American traveler.
You have some people who will be scared; they’ll be missing out on an opportunity of a lifetime, on the off-beat chance that Armageddon will fall during their ten days in Greece. There’s no other reason why they shouldn’t travel right now. There’s no strikes, no riots. Elections are on June 17. If people think that on June 18 Greece is going to switch to the drachma, it’s not going to happen.
How long will this last?
This great value should extend for the entire summer. Even if the elections proceed successfully, there will be continued concern in the global markets and in Greece. Hotels don’t book overnight. If August is looking sketchy in June, they’re not going to wait until July 30 to fill it. They’re going to give good offers. My prediction is that this is going to be the year for value in Greece.
