File photo. [Shutterstock]

Greece’s islands risk losing their global tourism appeal as infrastructure strains under record visitor numbers, the National Bank of Greece warned in a new report.

The bank estimates €35 billion in investments are needed over the next decade to modernize transport, energy, water and waste systems – about €15 billion more than current spending levels.

The study highlights frequent power and water outages, failing sewage systems, inadequate parking, poor roads, and outdated ports during peak tourist months.

“Greece, while remaining atop global tourism rankings, must maintain its attractiveness through modern, resilient infrastructure,” the report said.

Islands now welcome nearly half of Greece’s foreign tourists, doubling arrivals to 16 million since 2009. During peak months, density reaches 33 visitors per square kilometer daily – far higher than in mainland Greece or the wider Mediterranean. Yet per capita infrastructure investment remains stagnant.

The report calls for annual spending of €3.5 billion – up from €2 billion – to cover seasonal population surges and higher transport and supply costs. Without such upgrades, the islands’ “carrying capacity” could be compromised.

If investments proceed, island GDP could rise from €24 billion to €30 billion by 2035, while tourism revenues could grow 45%, adding €5 billion annually. However, the study notes serious governance gaps, urging creation of a central authority to oversee planning, tenders and delivery.

Island municipalities currently collect about €400 million yearly from accommodation and cruise fees, but much flows back to the central government. The report calls for full reinvestment of these funds locally, along with mobilizing private capital, EU grants and European Investment Bank loans.

Without effective governance, it warns, resources will remain trapped in plans instead of becoming functioning infrastructure.