Terrorism is a significant threat to the tourism and travel industry, a major sector of Greek economy, contributing to 18% of the overall GDP and employing nearly one million people. The purpose of this paper is to identify the impacts of the terrorism on economic Greek sustainable tourism development especially that of the Greek island of Crete, the largest island in the Mediterranean. Political, safety and security issues have adversely affected tourism in competing Mediterranean countries such as Turkey and France. The impact of this on the Greek tourism economic development is investigated. This paper provides an analysis of how terrorism in competing Mediterranean countries affects development of sustainable tourism development and can facilitate economic growth in Greece while overcoming the economic crisis. The methodology employed is based on case study analysis focusing on Crete, the country’s most recognized touristic island famous both for exceptional beaches and cultural significance. Statics collected within the last 3 years contributing to the study are based on interviews of people working in tourism and hospitality industries. Analysis supports the conclusion that terrorism adversely affecting France and Turkey will have a positive effect on economic sustainability of tourism in Crete.

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