Middle-class Greeks sacrifice island holidays Shielded from the midday glare under a blue-and-white striped umbrella, Giorgos Priftis glances around a small beach an hour's drive from Athens which is jammed with picnicking families. "Everyone here is in the same situation as we are - they can't afford to go away for a holiday," says the 46-year-old local government worker on his annual leave. His wife Anna, busy unpacking a cold box, adds: "Last year we spent a week in a self-catering apartment on an island . . . This year I lost my job and that means we can't even eat at the beach café. The Priftis's choice of day trips to local beaches is typical of many Athenians for whom an Aegean island break has become an unaffordable luxury as the recession in Greece grinds through its sixth year. Middle-class Greeks feel increasingly squeezed by sharp rises in income and property taxes on top of salary and pension cuts of 25-35 per cent. They are also sceptical after years of austerity about international lenders" forecasts of an economic turnround next year. "I used to take a trip to central Europe every year," says Rena Manolidou, a retired dentist. But I'm afraid of more pension cuts next year, so I'm only spending on essentials . . . Maybe I'll go and stay for a few days with friends in their village house. Yet while newly impoverished Greeks stay home, foreign tourists are arriving in record numbers, filling four- and five-star hotels to capacity on popular islands such as Santorini and Crete. After two poor seasons blamed on political instability and fears that Greece would crash out of the euro, hoteliers and tour operators say arrivals will reach at least 17m this year. We knew in January this would be a very good year . . . We set reasonable prices and there was a pick-up in demand from the UK and Germany, as well as strong interest from Russia, says Gina Mamidakis, chief executive of Bluegr, an operator of five-star hotels on Crete and Rhodes. But it's turned out even better than expected because of troubles in Turkey and Egypt that brought lots of last-minute bookings. Still by far the largest sector of the Greek economy, tourism revenues account for about 6 per cent of economic output, but as much as 20 per cent when related investment and services - island infrastructure projects, transport, sightseeing and entertainment - are included. And tourism is the country's biggest employer, even though most jobs are seasonal. Yannis Stournaras, the finance minister, says tourism will outperform budget projections with revenues set to exceed €11bn. As a result the economy will shrink this year by about 4 per cent compared with earlier projections by Athens-based economists of 5-5.2 per cent. This season is even worse than last . . . We've cut the price of a half-board package by 50% for August and September but there's still very little interest Theodoros Koliopoulos, hotel manager in Pelion The outlook is promising, with strong growth projected in arrivals from Russia and eastern Europe, along with improved quality as more global resort brands join the Greek market, according to Andreas Andreadis, president of Sete, an association of leading Greek hoteliers and tour operators. Aman Resorts, an international luxury brand, opened its first Greek property last year, while Grace Hotels, a luxury boutique hotel operator with properties on Mykonos and Santorini plans to open a third on the island of Kea next year. "We see a long-term growth trend that's been interrupted by blips caused by the crisis," Mr Andreadis says, citing a study carried out for Sete by the consultants McKinsey that projects 21m arrivals annually by 2021 and direct revenue of €18bn from tourism. The crisis has proved helpful in some ways, he adds: "Prices have come down and attitudes among young workers have changed because of very high unemployment . . . a waiter at a resort hotel is no longer seen as a dead-end job but a way into a hotel career." This year's boom, however, has excluded the three-star hotels and apartment complexes in regions that cater mostly to the local market. Domestic tourism revenues have shrunk by half to €1.5m annually, leaving many small operators struggling to survive. We've cut the price of a half-board package by 50 per cent for August and September but there's still very little interest," says Theodoros Koliopoulos, a hotel manager in Pelion, a mountainous region on the mainland that pioneered high-end tourism for wealthy Greeks in the early 20th century before the advent of sun-and-sand holidays. Some small operators with attractive websites have managed to replace Greek clients with foreigners. Ioannis Sartzetakis, a former bank manager who runs a family-owned apartment hotel on the remote island of Tilos with fewer than 300 residents used to rely on Greek tourists to fill his accommodation during August. "We only had one Greek booking for this year, but then we filled the apartments for the whole month thanks to a clutch of internet reservations from Norway," he says.