updated 6/21/2010 6:25:08 PM ET 2010-06-21T22:25:08

Greece on Monday promised to cover the extra costs of visitors stranded in the debt-ridden country in part of a bid to boost the vital tourism industry.

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The pledge would apply to tourists whose visits are prolonged due to strikes, or even natural disasters, said Culture and Tourism Minister Pavlos Geroulanos.

"We are guaranteeing to pay any extra room and board any visitor in Greece pays even if stuck here because of a volcano in Iceland," he said at a press conference announcing a new Internet drive to advertise Greece as a tourist destination.

Greece is caught in a major budget and debt crisis, and avoided bankruptcy last month using the first installment of a euro110 billion ($136.3 billion) European Union and International Monetary Fund bailout package. To secure the rescue loans, the center-left government slashed pensions and civil sector pay, while increasing consumer taxes.

Unions responded with a string of strikes, which canceled flights, ferry and rail services, and halted public transport.

Tourism is a vital source of revenue that accounts for more than 15 percent of gross domestic product, and one in five jobs. Industry experts say they are seeing a drop of about 10-12 percent in bookings this year, following deadly riots that left three dead last month in Athens when a protest against painful austerity measures turned violent.

Tourist arrivals had suffered earlier from the chaos in air transport caused by the explosion of a volcano in Iceland, which spewed vast quantities of ash into the sky for days, blocking air routes.

Geroulanos said the tourism industry seemed to be recovering, although it was too early to make accurate forecasts.

"The numbers are not really as gloomy as they were with the first cancellations," he said. "Some destinations have suffered greatly due to the crisis, but others are doing better than before."

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