Risks in the Tourism Sector from the Increase in Energy Prices

Energy, with very low demand and replacement elasticity, is a key component of production as well as a good for consumption. Inflation as a whole is instantly impacted by rising energy prices. After lockdowns were lifted in 2020–2021 and the global economy started to recover, oil prices began to rise. This trend continued with escalating geopolitical tensions and the eventual crisis in Ukraine brought on by Russia's invasion in February 2022. The current paper examines how the tourism industry has been impacted by rising energy commodity prices from the perspectives of travelers and hotel managers. Hereby a qualitative and a quantitative process is being used for a thorough examination of the consequences of inflated prices. More specifically, the three methods which were used are: descriptive analysis, correlation matrices and regression analysis. For the latter, all models appear to explain well the variation of the variables and provide reliable results. This study concludes that, although the overall inflation caused by higher energy prices was impactful for the individuals as well as for the businesses, however the touristic season of 2023 is expected to be one of the most fruitful ones yet, especially for the Greek economy, since strong numbers are reported (in revenues, expenditure and percentage of expected guests), while tourists are seemingly not willing to sacrifice their holidays altogether, but make other modifications in their lifestyle and choices. Finally, it is important to stress that governments should start integrating sustainable energy as a key component.