After a few difficult years full of challenges — including an economic crisis, a global pandemic and wildfires — Greece has reclaimed its status as one of the top tourist destinations in Europe.
But hoteliers and industry experts throughout the Greek islands are wary that the nation's recovery could be jeopardized by the latest refugee crisis in the Middle East and elsewhere.
Post-COVID-19, Greece's hospitality sector has been quite positive, said Konstantinos Sofianos, senior hospitality consultant at business advisory Cushman & Wakefield. According to the most recent official data from 2023, Crete saw a 7% increase in tourist arrivals compared to 2019, while the Ionian region experienced an even stronger growth of 11%, Sofianos said.
“Early indications suggest that this upward trend continued into 2024,” Sofianos said.
However, the hospitality industry’s recovery in the region has been clearly uneven, Sofianos said. The hotels that performed exceptionally well were those offering larger accommodation units and all-inclusive services. In contrast, those with limited outdoor space and reduced privacy or no improved infrastructure tended to lag.
“Business has been reasonably good during the last [few] seasons, and we have now reached the turnover of the pre-COVID years,” said Nikos Voulgaridis, owner of the Kókkini Porta Rossa, a luxury hotel on Rhodes. “Our hotel has done that with increased rates and less overnights.”
There are several reasons for such a mixed result, including enhanced competition from small hotels and Airbnb-style alternative accommodations.
Voulgaridis offered other reasons why hotel demand to Rhodes has looked different lately.
Another factor “is a decline in the quality of tourism in Rhodes and a vast increase of the number of tourists and cruise ship passengers are reasons that make Rhodes less attractive to our kind of guest,” he said.
Climate change also has taken its toll on the hospitality industry of the Greek islands.
“There is an increased number of heatwave days every year, with the number reaching 43 days in 2024,” Voulgaridis said. “This makes months like July and August quite slow for us. Our guests are wealthy adults, who don’t need to travel during school holidays and prefer to visit other destinations during the very warm months.”
On the other hand, climate change can also extend the high season beyond what hoteliers are used to, drawing in international guests to Greece far later in the year, said Stavros Kapetanakis, CEO of hotel-management firm Domisi Group.
“Countries such as France, Germany, the United Kingdom and the Nordic nations have led this shift, with the United States following suit,” he said. “Crete, in particular, is seeing steady growth in visitors during the shoulder months — April, May, September and October — thanks to its milder climate and expanding offerings beyond the peak summer season.”
Shelter from the storm
Hoteliers across Greece are also feeling the demand swings due to conflicts beyond its borders, said Vassilis Touvlatzis, sales and marketing manager of SK Hospitality, a company working with a range of upscale and luxury hotels across the country. But he added Greece's hospitality market can adapt to the circumstances.
“While economic fluctuations and regional conflicts — such as the war between Russia and Ukraine, and more recently, tensions between Israel and Iran — can influence traveler behavior, Greece has consistently proven to be a resilient destination,” he said. “Despite the loss of the Russian market due to the war and subsequent sanctions, Greek [island] destinations have continued to thrive, with demand surging from other key markets.”
But hotel performance varies drastically across Greece, Touvlatzis said. Santorini has experienced a 40% drop in arrivals due to recent seismic activity and related unrest in February, while Mykonos also saw a puzzling 15% decline.
The economic situation in Europe is another potentially detrimental factor. Voulgaridis said increased economic hardship in the U.K. has seen a 40% reduction in year-over-year tourist arrivals in 2025.
So far, Greece's tariff and trade disputes with the U.S. have not had a visible impact, which is crucial given the popularity of the Greek Islands with North American travelers.
In 2024, approximately 1.5 million U.S. visitors came to Greece, contributing approximately €1.6 billion to travel receipts, Sofianos said. Most of these travelers were in higher-income brackets.
Voulgaridis said he hasn't seen a drop in Americans coming to Greece.
“We have an increased number of guests from the U.S., by 30% more than last year. All our U.S. guests complain about the political situation in their country, but they don’t seem to be affected by the tariffs,” Voulgaridis said.
Since the pandemic, Greece and its region have received waves of asylum seekers, primarily arriving by boat from Turkey.
“The islands most affected during the refugee crisis were Lesbos, Chíos, Kos and Samos, primarily due to their proximity to the Turkish coast. These destinations experienced temporary challenges in tourism perception,” Touvlatzis said, adding it has taken several years for the affected destinations to restore their appeal.
Hoteliers now fear the problem is returning due to rising tensions in the Middle East.
In 2024, the Greek government registered 73,688 asylum applications, up from 57,891 in the previous year and 37,362 in 2022.
“Local initiatives and targeted investments have helped restore these islands’ reputations, with increasing interest from visitors once again,” Kapetanakis said.
And in comparison with pre-COVID-19 years, the refugee situation is now much more under control, Kapetanakis said.
But it's not clear whether the recent rise in the number of asylum seekers will have any impact on the hospitality industry of the Greek Islands just yet, Sofianos said. However, it's likely that hospitality development will slow in the coming years due to natural constraints.
“Regions such as the Ionian Islands, the north and south Aegean and Crete have seen notable growth in the permitted buildable surface” in the last two years, he said.
To help preserve natural landscapes and safeguard local communities, authorities now follow a more selective approach, Sofianos added.
“Securing approval for new investments is expected to become more challenging, with stricter compliance required under evolving regulations,” Sofianos said.