Mykonos: Building on a Crisis.

Jeff—Saturday

For some time now I’ve had a theory about why Mykonos is so overbuilt, yet continues to expand, amid a financial crisis that’s crippled growth virtually everywhere else in Greece. The answer seemed simple to me: It’s the financial crisis itself, stupid.  Here’s how I came to that conclusion.

The global financial crisis began in 2008, and Greece was one of its first casualties.  It’s been officially in bailout mode from 2010 until ending this summer. I shall not repeat the horrific debt, poverty, and unemployment figures Greece has borne, for I prefer to think positively.  

However, one must keep that Great Depression mentality in mind to fully appreciate the amount of capital that’s been plowed into Mykonos in those bailout years. I mean CAPITAL.  Mega-villa construction outstripping traditional-size homes, sun-bathing beaches becoming expanded beach club sites, beach club sites adding luxury malls, and traditional tradesmen shops disappearing, replaced by hawkers of jewelry, sunglasses, and fashion of the moment, or bars and more clubs.

But most of all, more and more homes sprouted up. Virtually all for the same reason: to earn rents. All across Greece the word went out, if you want to make money, come to Mykonos, and many did hoping to find fiscal salvation there.  The more who came, the faster prices rose for accommodations and rents.  Many Greeks and others with homes on the island realized they could make more money renting out their places during the three-month tourist season than they would likely make annually at their year-round jobs. The rational decision was to build, and build they have. 

This bizarre cycle continues. The more suspect the Greek economy, the more building and investment comes to Mykonos.  Even Lindsay Lohan has gotten in on the act…if in name only.

Where it all leads is anyone’s guess, but with regulated hotels now forced to compete with unregulated renters, tax authorities left to sort out who’s paid what to whom, and wage-earning workers forced off the island because they can’t find reasonably priced places to live, it’s not hard to see all ending in tears.

As I said, all of that was conjecture on my part. A theory I’d tossed about.

Then, today, I read a review by William Gallagher, appearing in Greece’s newspaper of record Ekathimeri, of a one-man play, “Rent Control” (featuring Evan Zes). His play came to Athens from Off Broadway. The article is titled “To Be or AirBnB?”  Its opening paragraph stopped me cold.  Here it is.

 Airbnb is a popular way for cash-strapped Greeks to supplement their income. Many Athenians have rented their homes to tourists and other visitors for short stays through the website. In fact, it has become so lucrative to do so that it has become much harder to find apartments in the center of the capital for traditional long-term leasing.

In other words, what I saw afflicting Mykonos is not confined there, but has spread to Athens, and I assume other pricey places like Santorini. Some might cite that as a sign of economic recovery, but is it that, or merely a way for entrepreneurial-minded Greeks to survive until true recovery arrives?

Who knows?  I certainly don’t.  Though perhaps the government will get an indication of how their electorate feels on the subject when parliamentary elections take place sometime before October 20, 2019.

—Jeff