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Traveling to Greece? Great Prices, Big Problems

Many U.S. tourists are carrying extra cash in case the ATMs in Athens run dry.
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Tourists looking for a big, fat Greek bargain just might find one in the fiscally troubled country, but those deals could be tempered by hassles ranging from cash shortages to civil unrest.

If Greece ditches the euro for the drachma, as is possible, prices on everything from B&Bs to baklava could plummet dramatically. As it is, five-star hotel rooms in Athens are already available for under $200.

Guillermo Calvo, an economics professor at Columbia University, acknowledges that the country’s struggles could present an “opportunity” for tourists. But he also warned of the potential for the kind of problems that can mar a vacation. “It’s going to be a mess,” he said. “Right now, it’s very difficult to know what going to happen.”

Ironically, among the most pressing issues tourists could face is a lack of access to cash.

“It’s a huge issue,” said Torsten Kriedt, head of product planning and intelligence for BCD Travel. “Many ATMs are out of money… There are long queues,” he said. Even though the government’s $67 cap on daily ATM withdrawals doesn’t apply to customers holding debit cards from American banks, that won’t refill an empty cash dispenser -- or make the lines any shorter.

Using a credit card (ideally, one that doesn’t charge foreign-transaction fees) could avoid this, but if the country undertakes a hasty conversion from the euro, the payment networks that process transactions behind the scenes might not be equipped to handle a new currency right away.

“I think there are a lot of people that are taking cash with them to Greece,” said Kelly Shea, a travel agency owner who specializes in high-end Greek travel for the Virtuoso network.

Calvo predicted an upheaval could spark a black market for more stable currency, though he thought most U.S. tourists wouldn’t want to conduct literal or figurative back-alley transactions on vacation. And they’re already benefitting from the country’s economic crisis, since it has helped to bring the value of the euro down closer to the dollar.

Greek banks didn’t open for business on Monday, and will remain closed as officials haggle over an economic bailout with its international creditors. If the Greeks can’t reach a deal, they will exit the Eurozone, meaning they’ll drop the euro for the national currency it replaced in 2002, the drachma.

Bjorn Hanson, a professor of tourism and hospitality at New York University, said dropping the Euro might make Greece an “even better value that it already is,” but noted that another side effect of the country’s crisis could offset that benefit for tourists.

“[A]ll of that is against a backdrop … of possible strikes that could disrupt transportation, services and the operation of tourist attractions,” he warned.

Shea said some of her clients had already asked her about the possibility of strikes making transportation or activities unavailable. She argued that Greece won’t permit that to happen, since tourism is a cash cow the country can’t afford to lose. “Greece needs tourists,” she said. “The Greeks realize how important tourism is to their economy.”

Visitors are big business for Greece. According to the Association of Greek Tourism Enterprises, direct and indirect tourism-related spending in 2012 contributed 16 percent of the country’s GDP and employed nearly one in five Greeks.

Euromonitor International finds that roughly 22 million people visited Greece last year, a 23 percent year-over-year jump, since Greece was able to take advantage of instability in the Middle East and position itself as an alternative to other destinations like Egypt and Tunisia. Nearly 600,000 Americans visit Greece each year.

“Considering the importance of tourism for the Greek economy… it is to be expected that the Greek government will do everything possible to make sure political instability in the country does not affect tourists,” said Euromonitor International travel analyst Angelo Rossini.

If Greece doe makes an abrupt departure from the region’s common currency, though, even dutiful hoteliers might not be able to shield patrons from the ripple effect on the infrastructure. Greek hotels might even find themselves unable to get deliveries of food or other supplies if currency remained in flux or deeply devalued, Hanson said.

These uncertainties will undoubtedly keep some tourists away. More intrepid travelers might find better prices as a result, but those might come with their own costs, Kriedt said. “If you don’t mind that, you can still have a good experience, but price on holiday is not everything.”