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Greece's Financial Crisis - How Will it Affect Your Travel Plans?

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Greece financial crisis -Picture of Euros
Picture of Euros © deTraci Regula; licensed to About.com
The Greek financial crisis is still dominating the news as the European Union looks for coping strategies and international stock markets are affected. While Greece's economy is not that large by comparison to many other European countries, it is the first to apparently truly fail since becoming a full Euro-using partner in the European Union, with Portugal, Ireland, and Italy also considered to be at risk.

As the Greek economic crisis now drags into its fourth year, the world is watching to see how Greece handles its financial crisis and to see what the European Union does to contain, control, or ease it. Another deal in March 2012 restructured and cancels some of the debt, and meant a better, more stable atmosphere in Greece as we moved farther into 2012. But the scattered results of the elections in May 2012 kept things unsettled for a while longer, until new elections gave victory to the New Democracy party, with close second-runner SYRIZA announcing its intention to act as an opposition party, things may be on the road to better stability for Greece.

But for most About Greece Travel readers, the big question is: How does the Greek financial crisis affect my travel plans for Greece?

1. The Bright Side: A Better Euro Exchange Rate for Travelers to Greece - Maybe

For many world currencies, the exchange rate on the Euro is improving in their favor relative to recent rates. This means a cheaper vacation all around.

While some wonder if Greece will be able to hold on to the Euro if they can't get the finances in order, it is very unlikely that any drastic change in the currency will occur in 2013. ... and that was my opinion for 2010, 2011, and 2012 as well, even if Greece ultimately defaults or delays payment on its debts. Will there be what some are calling a A "Grexit" in 2013? While I still think it is increasingly unlikely, it cannot be completely ruled out for 2013, but the new deals should mean the Euro in Greece is safe. Several of the parties likely to be prominent in months and years to come are not supporters of the austerity agreements made with The Troika, so it may become a new game entirely.

2. More Strikes are Likely in Greece

Unfortunately, as the Greek government tried to improve its financial balances, that translated to cuts in pay and benefits for state employees. The Greeks are fearsomely protective of their hard-won jobs, rights and benefits, and this usually leads to one thing: calling a strike. While these actions may be fully justified, they usually result in inconveniences for travelers. Be sure to pack a flexible attitude and alternate plans.

The election results in May 2012 have revised the political landscape of Greece entirely. Since several of the empowered parties are pro-labor, there may actually be fewer strikes than there would have been under a continuing pro-austerity, pro-bailout government.

But one unexpected result of the elections: the increasing empowerment of far-right Golden Dawn, whose followers have been accused of a number of attacks on immigrants and others. For the first time, the party won seats in Parliament despite what many see as a neo-Nazi philosophy guiding its members.

3. Struggling Greek Hotels and Tavernas May Delay Opening

In some places, the bad Greek economy combined with fewer tourists over the past four years may create a perfect storm. It just may not make financial sense to refresh and open up that seasonal hotel or restaurant; this will be more likely in the less-touristy locations and islands. My advice for 2011 was to not book too far ahead if you are traveling in the shoulder seasons which for Greece are April-May and September-October. But this seemed to improve slightly for 2012, I don't think this will be a problem in 2013. Many popular tourist spots enjoyed a banner year in 2011, as many travelers with plans for the Middle East decided to switch to Greece instead - and hearing about Greece every day in the news programs, even when the news was negative, seemed to have worked as a kind of advertising for Greek travel. German travel to Greece for 2012 is down substantially, so areas used to a high percentage of German tourists - such as the island of Crete - may see a downturn. But tourism from former Soviet Bloc nations increased, and overall, arrivals were down only a few percentage points in 2012 instead of a feared double-digit drop.

Will prices be cheaper? They were in 2010, 2011, and part of 2012, but I expect prices to be stronger in 2013 as it is expected to be a reasonably busy year for tourism in Greece, though there is that strong drop in the number of bookings from German tourists, who feel ill-treated in the wake of the financial crisis. Ongoing unrest in the Middle East also is driving some visitors to Greece rather than to Egypt and other destinations, especially as the crises in that area are dragging on and some travelers grow tired of waiting for another year to visit the Eastern Mediterranean. And even in previous tourism crises, I've noticed that some hotels and restaurants shift into a "grab every penny" mode and resist discounting for the few clients they have, while others will wheel and deal with you. In 2011, some spots such as Kos, Rhodes, Corfu, Santorini and Crete were reporting increases over 2010, but much of Greece was still quieter than the norm of a few years ago. Increases in world fuel prices and the economic problems in the rest of the world have also contributed to this, and the effect of Mid-East unrest, while it sent some vacationers to Greece instead in 2011, it has also simply kept others at home waiting for a calmer time. It pays to negotiate prices, but don't get discouraged - it won't work everywhere. Upscale locations may actually be the most flexible on prices - the families running the smaller places are feeling the pinch from the debt crisis in Greece much more directly than big hotels run by corporations.

4. Transportation Schedules May Be Cut

We already saw delays in summer schedules going into effect in 2010, 2011, and 2012; places that usually have more frequent ferry service by mid-June were sometimes not going to summer schedules until mid-July. In 2013, be sure to allow yourself enough time to get around and try to always allow an extra day in your schedule to get back to Athens from the islands. The good news - With the "new" Olympic Air stabilized after a pending merger fell through with Aegean Airlines and smaller airlines Sky Express and Athens Air filling in some gaps, I expect that air service to and from the Greek islands will remain reliable.

If Greece were to leave the Euro, and go to a remade drachma currency, the immediate impact on transportation could be unpredictable, as most airlines and ferry companies are at least partially financed from foreign nations, and most of those contracts are based on the idea that Greece is a Euro partner. Rumor has it that most affected companies now have contingency plans in place in case Greece does leave the Euro, something that was not the case in 2010 and 2011, so major disruptions in the event of a Euro exit are probably less likely than they were.

5. Opening Hours and Days May be Cut

This is a big problem for tourists in Greece, especially as extended opening hours over the past few years have been a real blessing for those trying to fit as much as possible into their trip to Greece. Don't trust the internet or guidebooks, call ahead for hours, quiz your hotel keepers (or have them call), and don't expect any posted extended hours to apply. It used to be that almost everything closed at 3pm in the afternoon, and might be closed on Mondays or Tuesdays. In 2013 this may be the case again.

6.There Are Some Incredible Bargains on Greece Trips

Even aside from the effects of the Greek financial crisis, there are some tremendous deals on travel to Greece. Cruising worldwide is experiencing a downturn, and so cruises in the Greek islands are at the lowest prices in years - even on luxury lines, in part because of 2012's Costa Concordia disaster and other problems with cruise ships worldwide. You may be able to upgrade your trip considerably by taking advantage of some of the lowest hotel and transportation costs in a long time. Even summer flights are at lower-than-usual prices; some package tours are at decade-low prices.

So, Be Relaxed - and Be Prepared

Given the situation in Greece, I do advise a couple of extra strategies to help ensure a happy trip. While carrying a few days' cash in Euros is always a good idea, since ATMS can run out, this is especially important now. Bank mergers have actually reduced the number of ATMs available, without reducing demand. Also, be sure you have sufficient prescription medications with you. Since many medicines are imports, there have been burps in the supply lines to Greece as unpaid bills to pharmaceutical companies pile up.

Travel insurance, as always, is a great idea -but if a strike has been announced beforehand, prior to your trip date, your travel insurance may not cover expenses related to it. Most travel insurance companies will have a list of "known" interruptions which they will not cover. Call your company just before your trip. You can buy direct through Travel Guard or from many other companies.

7. The Bright Side: Lighter Crowds, Lower Stress

While Greece enjoyed an upsurge of plenty of extra tourists in 2011, followed by fewer in 2012, I don't expect it to be that busy in 2013. With the ongoing world economic downturn, tourism to Greece may decline, though Greece is receiving many visitors from China and newly wealthy former Soviet bloc nations. But in general, you're much less likely to face massive crowding at the monuments and attractions. And this in turn leads to less jammed hotels and tavernas, which may mean that the owners have more time to relax and chat with the guests they do have. This may translate into an even more memorable and pleasant trip for you, at a bargain price.

Bottom Line: Still Go to Greece. You'll have a wonderful time - maybe an even better trip than in a "normal" year.

Updated January 2013

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