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Europe’s beach resorts are pulling up the shutters as they prepare for the summer season. In just a few days, they transform from sleepy backwaters into bustling havens for everyone from the American super-yacht set to clubbing Italians. On Mykonos, many people make most of their annual income in just eight weeks. We went there before the onslaught began and found locals sheltering from the wind and more concerned with slaughtering pigs than P Diddy dropping in.

The Mediterranean is waking up. The sun loungers are opening like spring buds, the infinity pools are being cleaned and the picture-menus dusted off. Battalions of seasonal workers are bedding down in dorms beside the dumpsters out of sight of hotel guests, as car hire managers and postcard vendors brace themselves for their brief earnings window. For the rest of us, now is the time to start dreaming of sun, sea, sand, sangria and, depending on the precise details of your itinerary, perhaps a visit to the local STD clinic.

To experience this transitional period, and find out what the locals get up to when we’re not looking, visit Mykonos just after the brief Easter blip. With over a million visitors a year, it is the most popular of the Cyclades group of about 30 islands in Greece. Tourist numbers were up by 16 per cent last year, mostly thanks to an unfortunate increase in cruise passengers. Tourism accounts for 90 per cent of employment and over 90 per cent of revenue on the island – the lion’s share harvested in July and August.

Over the past century, this 88 sq km island, home to 10,000 people, has gone from archaeologists’ B&Bs serving the ancient sites of neighbouring island Delos to a hippie hang-out in the 1960s – when its first nudist beach caused an international ruckus. In the 1970s it became a jet-set haven, beloved of Elizabeth Taylor and Richard Burton, and Aristotle and Jackie Onassis. During the 1980s Mykonos was blighted by package tourists, then written off as a gay ghetto.

Today Mykonos remains a predominantly adult destination – a smaller scale Ibiza, with all the Caligulan excesses that implies – but the island is once again basking in the limelight of jet-set endorsement with recent confirmed sightings of the Michael Douglases and the Jolie-Pitts, along with that inevitable axis of celebrity, Paris Hilton and P Diddy.

This barren island, with its windswept granite hills and dry-stone walls, is one of the Mediterranean’s prime party islands for gay and straight alike – think of it as the Hebrides in hot pants. Designers such as Thierry Mugler, Valentino and Jean Paul Gaultier (who has a house here) are regulars on the celebrated beaches of Paradise and Super Paradise, though presumably not in the company of another Mykonos regular, George Bush Snr (though it’s a nice image). DJs Paul Oakenfold, Pete Tong and Sasha play the island’s flagship clubs, while celebrity chef Nobu Matsuhisa hosts an outdoor summer restaurant in the unbearably chic Belvedere hotel. The Belvedere jostles with the recently opened Saint John Mykonos and the classic 1960s jet-set hotel, Mykonos Theoxenia, for the attention of the Roberto Cavalli-clad crowd. Although, of course, the properly wealthy, like Roman Abramovich and Bill Gates, escape to their private super-yachts.

Out of season, however, is quite another matter. The first indication of the type of pre-season visitors Mykonos attracts came as I boarded my 20-minute flight from Athens to be confronted by a sea of Jackie O sunglasses wearers, their opposite halves’ foreheads dotted like dolls’ heads with the telltale signs of hair transplants. Early spring, it seems, draws a more mature crowd to Mykonos.

“Yes, they are older at this time of year,” says my taxi driver, a member of a closed shop of just 32 on the island. “In January and February we get a lot of Japanese tourists – they come for the scenery. At Easter the rich come from Athens, and they keep coming for the weekends, then everyone comes in June and July – Americans, lots of South Americans on the cruise ships, French, some English. But in August it’s all Italians – more and more are coming. September is now when the gay people come.”

The next day, escaping the gale force wind, I wander down into Mykonos Town’s confoundingly mazy, flagstoned alleys, some barely wide enough for two broad-hipped cruise ship passengers to pass. Though I am one of only a handful of tourists, there is a palpable sense of anticipation in the air as shopkeepers stand rubbing their hands together in the doorways of their boutiques (imagine an 18-year-old Italian’s sartorial fantasies made fabric), and glitzy jewellery stores of the kind designed to part rich Russians from their roubles.

Eventually, I pop like a cork on to the intoxicatingly picturesque old harbour with its famous Venetian houses, their wooden balconies suspended on little more than matchsticks above a choppy sea. Mikri Venetia is also home to several delectable lounge bars with sofas and tables overlooking the water, all of them virtually empty. I can have my pick of sundowner seats but come summer this place will be sardining them in.

Politely edging past another of the island’s famous landmarks – a sizeable, yet tame, pelican called Petros – I make my way into a harbour-front restaurant to meet Athanasios Kousathanas-Megas, the deputy mayor of Mykonos who has been involved in local politics for over 20 years (he is a member of the governing New Democracy party).

Mykonos has been described as a model for tourist development of this scale. So what is its secret? “Tourism is based on people,” Kousathanas-Megas explains. “Mykonians are the friendliest people.” But surely even the Mykonians’ fabled hospitality must be severely tried by the tourist invasion?

“No,” he insists. “Our real problem is that we would prefer if they wouldn’t all come in July and August. June and September are great months to come here and we are trying to persuade them with special events, regattas and so on. Winter is the Mykonians’ time for traditions, festivals – like the killing of the pigs [a family ritual called ‘hoirosfageia’, organised by the Mykonos Women’s Society in which every edible part of the animal is prepared and then consumed with copious quantities of wine].”

Around 60 per cent of visitors come during these peak months and pressure on the island’s 30,000 rooms sees rates rise by over 50 per cent in August with the best villas costing upwards of €1,000 a day and decent hotel rooms €300 a night; the bars and restaurants raise their prices accordingly. In terms of buying, the small property market is still dominated by mainland Greeks. Sotheby’s recently offered an estate with two villas and heliport for €6.5m, while apartments start at around €130,000 out of town.

I ask the deputy mayor if many locals leave the island during the summer and rent out their homes: “No, of course not. That’s when they make all their money!”

At least the island’s booming cruise industry is helping to spread the tourist bounty, as the season now stretches from March to late November. A new harbour, which is deep enough for even the largest cruise ships carrying over 3,000 passengers, just north of the main town, saw 600 boats docking in 2006.

“The gay men have realised out of season is better,” he adds. “They have a big event [“Mr Gay Greece”] here in September.” The pink dollar/euro/pound has been important to the island, but several locals tell me the number of gay visitors is dropping. Is this intentional? “It has not been an official decision, and the island feels it has to support all types of tourism. Whoever you are, you should feel free here. We are a very open-minded society,” says Kousathanas-Megas. In fact, I get the feeling that if the Mykonians were to dissuade anyone from coming it would be the English: “Look what the English do in Corfu!” one hotel owner shudders. Instead, the island is targeting new markets and trying to set up direct flights to Russia and China.

Less actively courted are the island’s Albanian immigrants who some believe make up half of its population. Michaelis Asimomitis, the island’s head of PR, explains that it is difficult to put an exact figure on immigration to Mykonos: “We have immigrants from everywhere, all over the Balkans, and from Asia. They tend to live here permanently – they do a lot of the building work,” he says. The region’s 1,000 or so seasonal workers come largely from the Greek mainland because they have language skills. Asimomitis says Mykonos did have problems with Balkan immigration after the collapse of the Soviet Union, but adds that things are much better now.

The next day, on a drive out to the Contiki resort by Kalafatis beach, I meet Dobry, a Polish migrant builder in paint-stained overalls. The Contiki won’t open for a month, he tells me. I ask him when he is returning to Poland. “I live here,” he says. “Lots of Polish people here. I like it – better than Poland.”

The deputy mayor is keen to stress Mykonos’s long-standing environmental credentials. A ban on hotels with over 150 rooms discouraged big chains, he says, while a recent land use law restricts construction in the quieter north of the island. The beaches are reasonably clean – three have blue flags – and though they have suffered from water shortages and problems with hydroelectric power supply, a desalination plant and two reservoirs have alleviated this to some extent, and another €2m desalination plant had just been approved.

Having taken my pick of the rows of still-pristine hire cars, I venture off to see for myself. In the south, around the gay/nude/party beaches, Paradise and Super Paradise, and elsewhere, the new building work continues, the peace shattered by jackhammers chipping away at the granite rocks. And the development seems equally energetic in the north. Standing on the supposedly quieter, protected Panormos beach, I count half a dozen concrete frames of imminent new villas. I will not go as far as to say that Mykonos is being raped by the developers – the buildings are at least in the traditional, low-rise Cycladic style – but it might be called a mild molestation.

I spot my first sunbathers – a handful of brave Australians and Americans exposed before the breeze – at Paradise beach. I ask Stathis Tsoukalas, the owner of the Paradise Lounge, how business has been: “Up until last year things were going down, I think maybe the island got too famous. But last year it was coming up again. It is cheaper here than Ibiza. We open on 1 April and get a lot of Americans taking spring breaks. Over summer, more Americans, South Africans, Australians, the whole chill-out scene. August we are packed with Italians. They love it when it’s crowded and noisy. Valentino Rossi was here. And then the season is over by 30 October.”

Tragically there is none of Nobu’s signature black cod available tonight as the Belvedere is closed, its lobby hugger-mugger with paint cans and buckets. At least the Astra bar in the heart of the old town is open, albeit empty save for the staff who greet me with a free vodka shot. The Astra has been white-hot for two decades. Steven Spielberg, Liam Neeson and Ronaldo were all spotted here last season downing €15 cocktails.

“The first winter that I lived here I thought it was like a haunted place,” says Despoina Bitzaraki, one of the female bar staff. “We have a special mentality here to deal with the seasons and I had to learn that. But I like the peace and the music is more Greek in the winter. In winter we meet again, we relax and there are lots of weddings. The sun shines – it is a special atmosphere. There is always something happening, even in winter. We have lots of festivals. I like it in winter. It is a chance for us to travel too.”

Starry behaviour, such as Paris Hilton’s insistence that they play her CDs, is apparently rare: “Perhaps it is because whoever you are, you have to walk to get into this part of town,” says Omiros Evangelinos, the bar’s owner and one of Mykonos’s nightlife tsars, later that night.

“In the next week or so this place will be packed at every weekend with people from the mainland, Istanbul, Tel Aviv, wherever. They charter planes because for six or seven people it can be cheaper than flying via Athens. By the summer we will have five DJs playing every night and it will be packed.” Evangelinos, who winters in Punta del Este, adds filmmaker Baz Luhrmann and Mel Gibson to the growing list of celebrity Mykonos fans.

The next morning I am due to leave. I sit on a bench by the petrol-blue waters of the harbour with Edel and Janice, two middle-aged English backpackers. I ask why they have come to Mykonos out of season. “We prefer it when it’s not so hot,” Edel says. “Some things are closed, and the ferry to Delos isn’t running because of the wind, but that’s OK. We really can’t stand the crowds.”

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