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The higher cost of a holiday in Greece – it’s not just the fault of Brexit

A holiday in Greece used to have more attractions than hot sunshine and glorious beaches. The cost of living made this holiday destination attractive too, with cheap food and wine. Over the past five years things have changed: whilst the weather remains attractive tourists will find that the cost of living and dining out is no longer as cheap as it was.

Clearly one factor that has made overseas holidays more expensive has been the fall in the value of the pound since the Brexit vote in the June 2016 referendum. This decline amounts to nearly 20% against the euro with the exchange rate moving from €1.4 to €1.13 per pound.

However two other factors have added to the cost of a Greek holiday.

First, the rate of VAT has been increased sharply with the highest rate of 24% being applied even to most foodstuffs and drinks. This move has been one of the measures the Greek government has been forced to make to address its chronic budget deficit under the austerity programme it has been obliged to implement in return for loans from its Eurozone partners.

Additionally, though, the demand for holidays in Greece has risen as tourists have shunned other countries which have witnessed terrorist atrocities. Higher demand has helped to push up not only the cost of accommodation but other costs incurred on holiday too.

My own experience having just returned from Corfu confirms this reality. Holiday companies were reporting 100% occupancy rates even outside the peak holiday season. The cost of shopping at the large supermarkets was not greatly different to what I pay here in the UK. Dining out produced bills (including the cost of wine) pretty much in line with what I would pay back home. All this is not to say I didn’t enjoy my time on holiday – far from it as I’ve already booked to go back next year – but for the time being at least Greece is not the ultra-cheap holiday location it was a few years ago.

Martin Upton

Director, True Potential PUFin

9th July 2017

About True Potential PUFin

True Potential PUFin is based at the Open University Business School in Milton Keynes, UK

True Potential PUFin is the first and only personal finance research centre in the UK that has an active teaching programme freely available to the public. Supported by the University’s excellence in delivering distance learning, the Centre is uniquely positioned to develop the public’s financial capability and to research the impact and effectiveness of its education programme. 

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