Can Greece’s Islands Survive Their Own Popularity?

A new report from the National Bank of Greece warns that the country’s island destinations — home to nearly half of all foreign visitors — are reaching their limits. After years of record-breaking growth, the central bank says the next decade must mark a strategic turn: from ever-rising arrivals to smarter, steadier, and more sustainable tourism.

Over the past 15 years, the islands have doubled their arrivals to roughly 16 million visitors in 2024, accounting for 11 percent of all global island tourism. Seven Greek islands — including Crete, Rhodes, and Corfu — now rank among the 30 most popular worldwide, alongside names like Bali, Hawaii, and Phuket.

A Shift From Quantity to Quality

Rather than chasing more visitors, the bank argues, Greece should focus on attracting higher-spending travelers and smoothing out the extreme seasonality that now concentrates 42 percent of arrivals in just two months, July and August.

Increasing the share of non-European visitors from 8 percent to 18 percent by 2035 could raise average spending per trip by 15 percent, according to the report. Encouraging travel to less-crowded islands and promoting off-season tourism would help ease pressure on infrastructure while extending the economic benefits of the industry year-round.

The path toward sustainability will not come cheap. The Bank of Greece estimates that roughly €35 billion — about €3.5 billion a year through 2035 — will be needed to modernize transport, utilities, health, and digital systems across the islands.

These investments, the report suggests, could pay off handsomely if managed wisely. By reducing seasonality, upgraded facilities could operate at more than 95 percent capacity for six months a year, rather than just two, improving returns on every euro spent.

Building a Framework for Resilience

Beyond money, the central bank stresses, Greece needs a new governance model. It proposes the creation of a National Island Infrastructure Authority, tasked with pooling resources, prioritizing projects based on data, and accelerating approvals through streamlined procedures.

The new body would work alongside two additional pillars: the completion of long-delayed local development and spatial plans, and a technical support mechanism to monitor progress and maintain transparency. The report points to examples from the Balearic Islands and the Azores, where similar frameworks have significantly boosted efficiency and accountability.

At present, about €400 million is collected annually from accommodation and cruise fees — covering only half of the additional costs caused by seasonal population surges. The Bank of Greece recommends “ring-fencing” these revenues, ensuring that the funds collected in each region are reinvested locally, a practice used in Venice and the Seychelles.

Managing Success

Greece’s dependence on its islands is striking. Though they represent only 15 percent of the country’s population and territory, they account for nearly half of foreign tourist arrivals — far above the proportions seen in Spain or Italy.

Without a strategic shift, the report cautions, this success could prove fragile. But with decisive investment and planning, tourism revenues could rise by 45 percent, adding €5 billion annually and lifting the sector’s contribution to Greece’s GDP from €24 billion to around €30 billion.

“The real challenge,” the Bank of Greece concludes, “is not how many come, but how well we can sustain them.”