Tourism is a vital source of income for Greece, accounting for about a fifth of gross domestic product, but the country's debt problems, and a reluctance among many Germans to act as the euro zone's paymaster for its bailout, have sparked anti-German protests in Athens.

That in turn has deterred Germans, the world's largest spenders on foreign holidays, from choosing the Mediterranean nation for this summer's vacations.

"The Greeks are wringing their hands in despair waiting for holidaymakers," TUI Germany Chief Executive Volker Boettcher told journalists gathered in Berlin ahead of the ITB travel fair.

Boettcher said the debate over the financial crisis and security in the country was overdone and that he saw no reason for Germans to avoid the country.

TUI Germany, part of Europe's largest tour operator TUI Travel (TT.L), said bookings to Greece had fallen by a third from the same time last year.

"What I'm hearing from customers is that they don't feel welcome," Boettcher said.

That echoed comments on Monday from rival Thomas Cook Germany, part of London-listed Thomas Cook Plc (TCG.L).

"The events in Athens are impacting the country's image," Thomas Cook Germany CEO Peter Fankhauser said.

Tour operators and travel industry experts have been seeking to highlight that the islands popular with tourists are far from the tensions in the capital Athens.

Both Boettcher and Fankhauser said Greece could yet get a boost from last-minute bookings.

"We haven't given up hope for Greece," Boettcher said.

(Reporting by Victoria Bryan; Editing by Will Waterman)

• A Permanent Economic Emergency