United States, Canada, Australia Visitors Play Vital Role In Greece’s Tourism Boom, But Alpha Bank Warns Iran-Israel Conflict Could Disrupt Long-Haul Arrivals, Cruise Travel, And Foreign Direct Investment

Published on July 2, 2025

Greece’s booming tourism industry, significantly fueled by long-haul travelers from the United States, Canada, and Australia, now faces serious challenges as geopolitical tensions escalate following the fragile ceasefire between Iran and Israel. According to Alpha Bank’s latest economic bulletin, while American, Canadian, and Australian tourists contributed billions in revenue in 2024 and remain vital to Greece’s travel economy, ongoing regional instability could disrupt air travel, cruise itineraries, and investor confidence. The report warns that perceived insecurity in the Eastern Mediterranean may deter high-spending visitors and delay foreign direct investment, threatening the momentum of one of Europe’s most tourism-dependent economies.

Heightened Iran-Israel Tensions Cast Shadow Over Greece’s Booming Tourism and Investment Landscape, Says Alpha Bank

Greece’s flourishing tourism and foreign investment sectors could face headwinds amid mounting regional instability triggered by the fragile ceasefire between Iran and Israel, according to Alpha Bank’s most recent economic bulletin. Amid rising geopolitical strains in the Middle East and Eastern Mediterranean, leading economists from one of Greece’s top financial institutions are sounding the alarm over possible ripple effects that could hinder tourism growth, disrupt vital income channels, and slow the pace of foreign direct investment.

Tourism stands as a cornerstone of Greece’s national economy, generating close to twenty percent of the country’s GDP and sustaining countless enterprises and employment opportunities throughout the nation. However, Alpha Bank cautions that escalating regional unrest—particularly if the ceasefire between Iran and Israel collapses into full-scale conflict—could undermine the remarkable progress Greece has achieved in tourism recovery since the pandemic.

Israel-Greece Travel Corridor at Risk

One of the most immediate concerns identified by Alpha Bank is the potential impact on travel flows between Israel and Greece. For summer 2025, an estimated 1.3 million airline seats were scheduled on flights from Israel to Greek destinations—a figure that marks a forty-three-point-five percent increase over the previous year. These seats represent nearly five percent of all international capacity into Greece during the peak season.

The surge in flight bookings is matched by strong travel intent from Israeli citizens. Active bookings from Israel have reportedly increased by almost fifty-seven percent, signaling the country’s growing role as a key source market for Greek tourism. Yet these gains now hang in the balance as security fears and international travel warnings weigh on travelers’ decision-making.

Although Israeli tourists constitute just one-point-seven percent of all international arrivals to Greece, they are considered high-value travelers. In 2024 alone, revenue from Israeli tourists soared to four hundred nineteen million euros, a dramatic rise from two hundred sixty-nine million euros recorded in 2023. These earnings not only highlight the economic significance of Israeli visitors but also reinforce Greece’s positive services trade balance with Israel, which reached four hundred thirty million euros in 2023—driven predominantly by travel and tourism.

Long-Haul Markets Could Be Spooked

Beyond the direct Israel-Greece tourism connection, Alpha Bank’s report delves into broader global consequences. A protracted conflict in the Middle East, particularly if it spills into the Eastern Mediterranean, could brand the region as a geopolitical flashpoint, discouraging long-haul travelers from key markets such as the United States, Canada, Australia, and parts of Asia.

The cruise industry may be particularly vulnerable to these perceptions. Cruise tourism in Greece reached a record high in 2024, with four-point-seven million passenger arrivals—up forty-two percent year-on-year—and generated more than one billion euros in revenue. With many international cruise lines operating itineraries through the Aegean and Eastern Mediterranean, even the suggestion of instability could lead to itinerary changes or cancellations, eroding what has become a significant revenue stream for Greek ports and islands.

North American and Oceanic markets also contributed robustly to Greece’s tourism windfall. In 2024, tourists from the United States, Canada, and Australia accounted for nearly two million arrivals and generated two-point-two billion euros in tourism receipts—approximately ten percent of the nation’s total revenue from travel.

Short-Term Resilience, Long-Term Caution

Amid growing geopolitical uncertainty, Alpha Bank highlights that Greece’s tourism sector demonstrated notable resilience during the opening quarter of 2025. Tourist arrivals grew by five-point-eight percent, while earnings from tourism increased by ten-point-six percent compared to the same period in 2024. These early figures reflect sustained demand and traveler confidence, particularly in core European markets less affected by Middle East tensions.

Nevertheless, the bank underscores that continued geopolitical friction could damage long-term investment confidence and delay several large-scale projects. Foreign direct investment—already a crucial driver of Greece’s economic modernization—might be curtailed if global investors perceive heightened regional risks.

FDI inflows reached an all-time high of six-point-eight billion euros in 2024, up forty-one-point-three percent from the year prior. This capital surge has been directed largely into real estate development, manufacturing, and financial services—sectors seen as essential for boosting productivity and employment. Of particular note, Israeli investment comprised one hundred twenty-two million euros of that total in 2024, primarily targeting Greek real estate and accounting for one-point-eight percent of all FDI.

A Delicate Balancing Act Ahead

Alpha Bank’s bulletin concludes with a cautious but pragmatic outlook. Greece’s open economy, highly reliant on global tourism and international capital flows, is uniquely vulnerable to geopolitical shocks. While current data suggests strength and resilience, the longer-term picture will depend heavily on how Greece navigates the volatility in its wider neighborhood.

As Athens positions itself as a safe and stable gateway to the Eastern Mediterranean, maintaining peace and fostering diplomatic resilience will be crucial. Alpha Bank emphasizes that proactive strategies—such as diversifying tourist source markets, strengthening investor protections, and enhancing crisis preparedness—will help shield the Greek economy from external shocks.

Greece’s record-breaking tourism revenues—driven by visitors from the United States, Canada, and Australia—now face mounting risks as the fragile Iran-Israel ceasefire raises concerns over regional stability, travel disruptions, and foreign investment slowdowns.

For now, Greece stands at a critical juncture, with its tourism and investment sectors both flourishing and fragile—buoyed by past success but exposed to the unpredictability of regional geopolitics.