Greece’s olive-clad hillsides and turquoise sea gleam as enticingly as ever under the hot August sun.

But the country’s image as a relaxed Mediterranean destination has been taking a beating.

Thousands of tourists were stuck beside the hotel pool last week because of a truckers’ strike that shut down petrol stations across the country.

The strikes also triggered a wave of last-minute cancellations by Greeks in advance of the August break – the busiest period of the tourist season.

“The strike’s been suspended – but the cancellations still stand. It’s turning out to be a very difficult season,” said Yannis Economou, a hotelier on the island of Crete.

Repeated strikes, including action by merchant marine engineers that spread to tourist ferries in June, anti-austerity riots and a negative press in Germany – the main feeder market for Greek tourism, along with the UK – have dealt a blow to the ­country’s biggest industry at a time when its contribution to the economy is more important than ever.

Greece normally attracts about 14m tourists annually, with one-third coming from Germany and the UK. But this year visitor numbers are projected to fall by about 3.5 per cent and revenues by 10 per cent, according to tour operators and hoteliers.

As Greece’s fiscal crisis deepened, Germany’s tabloid press pilloried Greeks as lazy ouzo-drinkers seeking financial aid from hard-working north European partners in order to stave off bankruptcy.

A fall in UK bookings is blamed on domestic economic problems. More Russian and Asian visitors are expected, but not in numbers that would compensate for the slowdown in north European arrivals.

Prices at four-star hotels have been cut by 15-25 per cent for the summer season. But increases in value-added tax as part of the government’s fiscal consolidation package have pushed up the price of meals, drinks, taxis and car rentals.

“We ignored the adverse publicity and came as usual this year. We got a good accommodation rate and enjoyed the empty beaches. But the cost of extras makes Greece much less attractive,” said Stephen May, from Philadelphia.

Maureen O’Brien from Dublin said: “It’s fine if you’re a bracelet tourist and stick to the hotel facilities. But if you want to go sightseeing, the costs mount up pretty fast.”

Even before the crisis, Greece’s tourist industry was losing competitiveness with Croatia, Turkey and Egypt all offering cheaper “sun-and-sea” packages for the mass tourism market.

Nowhere is this decline more visible than on Corfu, the first Greek island to develop package tourism in the 1970s – thanks to a comparatively short flying time from northern Europe and a longstanding reputation as a summer retreat for well-heeled Italians and Greeks.

But visitor numbers have shrunk by about 13 per cent during the past four years, according to the local travel agents’ association.

Corfu’s image suffered because of the notoriety of Kavos, a resort in the south, as a cheap binge-drinking venue for British 18-to-30-year-olds. But falling price competitiveness is the main problem, says George Doukas, a Corfu travel agent.

“There’s been a steady decline in spending per tourist – the average stay is now several days shorter than in the early 2000s,” Mr Doukas said.

This year Corfu’s biggest resort complex, with 2,500 beds, failed to open at the start of the season after several loss-making years and it is up for sale.

But high-end Greek destinations with a strong client base have also suffered. Paxos, a much smaller island south of Corfu that mainly attracts high-end UK visitors, used to be resilient in a downturn. It hosted about 150,000-200,000 tourists each year, including day trippers in July and August from Corfu and the mainland, and had a high rate of return visitors, averaging about 30 per cent. With only two small hotels on the island, most visitors stay in well-appointed villas hidden among olive groves.

“This year bookings are down by 7-8 per cent ... We assume it’s because of problems with the UK’s economy,” said Panagiotis Aronis, a villa rental specialist.

Paul Matthews, from Manchester, said: “We used to rent a villa for a month – but we’ll only manage two weeks this year.

“It’s not just because of the UK economy – prices on Paxos in the last three years have also gone up a lot.”

But cruise tourism, which is growing rapidly in the east Mediterranean, could provide the solution to reviving Greece’s tourist industry.

Like other Greek islanders, Corfu operators believe cruise ships, which carry 1,200 passengers, hold a huge potential -- provided the government fulfils its pledge to lift current restrictions on foreign-flag ships starting and ending cruises at Greek ports.

Dimitris Charitos, president of the island’s association of travel agents, says almost 600,000 cruise passengers will spend a day on the island this summer, a 20 per cent increase over last year.

“Shopping, eating, sightseeing, it all adds up,” Mr Charitos says. “The average cruise passenger spends at least $50 during a six hour visit.”

”But studies show that if cruise passengers are able to fly in and out of Corfu, a sizeable percentage would also spend a few days in a hotel here. That would help put our tourist industry back where it used to be,” he says.

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