By Grigoris Stergioulis
Chairman, Enterprise Greece
The tourism sector, a driving force behind the Greek recovery, is going from strength to strength. More than 30 million tourists – a record number – are expected to visit Greece’s sandy beaches and ancient sites this year. Accounting for about 20% of GDP, Greek tourism has been helping drive Greece’s recovery for the past several years and is drawing keen interest from investors.
A constraint in accommodations, coupled with recent structural changes to Greece’s resolution process, is further raising Greece’s investment prospects relative to other Mediterranean destinations like Spain, Italy or France. This is why Athens was selected as the venue for this year’s Mediterranean Resort & Hotel Real Estate Forum (MR&H) to be held 17-19 October 2018 under the auspices of Enterprise Greece.
MR&H, a high-level event, is the only international forum focused on investment in resorts, hotels and complex tourist accommodation in the Mediterranean. The Forum will bring key industry players from around the world to the Greek capital to discuss emerging investment trends in the region. This event will put the spotlight on the opportunities in the Greek market and raise the visibility of the country as an attractive investment destination.
Depressed prices and high returns in the hospitality real estate sector translate into an unrivaled opportunity for property investors as Greece moves beyond its economic crisis. Supporting investors is an ambitious national tourism strategy focused on expanding the tourism season, attracting high-end tourism, opening new markets and developing sub-sectors in the Greek tourism market. The goal, as expressed by Tourism Minister Elena Kountoura, is to establish Greece as one of the top five preferred destinations worldwide.
The establishment of an attractive investment framework for tourism projects and acceleration of the privatization process, coupled with infrastructure improvements to ports and airports, have already spurred investor interest. Over the past three years, 350 investment plans in 4- and 5-star hotels have been licensed by the Greek government. Meanwhile, existing properties have been upgraded and modernized by major investment funds and high-end operators, and more than 26,000 beds have been added to the country’s hotel facilities.
Notable among these projects, to name a few, are:
- The first Aman Resort (Amanzoe) and the first Nikki Beach Hotel opened their doors in the Argolid, while luxury villas and hotel units are in progress in the Peloponnese (Messinia, the Argolid, Ilia, Laconia).
- Lamda Development, with investors from China and the U.A.E. participating, have secured the concession to redevelop the old Athens airport at Hellenikon.
- U.S.-based Oaktree Capital announced its collaboration with Greek SANI S.A. to expand into the Greek tourism market.
- A consortium of Arab and Turkish companies won the bid for Astir Palace, the queen of the Athens Riviera, which will reopen as the first Four Seasons hotel in Greece.
- The first One and Only in Kea by Kerzner International.
- The cooperation of the Turkish group Dogus with Lamda Development for the expansion of a network of marinas in Greece.
- The recent investment in Skorpios by Russian oligarch Dmitry Rybolovlev.
Also in 2018, two new, world-class, five-star hotels opened their doors in Athens. Most recently, in July, the country's first Grand Hyatt (the second in Europe) was inaugurated after a €20 million renovation of the previous hotel property on Syngrou Avenue. In May, the new Athens Marriott opened its doors in the former Metropolitan hotel building, after a 10-month refurbishment.
Greece is changing and changing quickly. Most importantly, the country is on the threshold of a new growth trajectory as the economy increasingly attracts foreign direct investment and expands export trade.
And a vital pillar of growth for Greece is the tourism industry. As the data shows:
- In 2017, Greece had another record number of tourist arrivals. Last year, the country welcomed 30.2 million visitors – a 10% increase from a year earlier -- and collected €15 billion (an 11% increase) in tourism receipts.
- Tourism accounts for 18.6% of GDP and 23.4% of employment (2016).
- Greece ranks 5th in the Global Tourism Index, according to Mark Anholt-GfK (2017).
- Forecasts for 2018 show another record year, with nearly 32 million visitors projected.
According to a recent estimate by the World Travel & Tourism Council, Greece will need €5.5 billion worth of investment in hotel capacity over the next five years to meet projected demand. The crisis years put pressure on underperforming properties, due to tightened lending standards. As a result there is room in the Greek hospitality market for high-quality, branded supply to serve the ever-increasing number of visitors.
MR&H 2018 will be an important stepping-stone in attracting the necessary investment to continue the success story of Greek tourism. At Enterprise Greece we look forward to welcoming leaders in the
industry to Athens in October and demonstrating the exceptional investment opportunities offered by Greece today.
At the Forum we will be showcasing the competitive advantages in a range of niche products such as tourist resorts, conference tourism, medical tourism and the exploitation of the tourist ports in the country to leading executives looking for partnerships in Greece. Furthermore we will be presenting the opportunities offered by the large number of projects to be undertaken under the privatization program.
In short, we are at a juncture in Greece that presents a particularly auspicious constellation of conditions for investing in tourism real estate, whether in the form of turnkey operations, upgrading and development of defunct properties, or developing new hotels and resorts from the ground up.
The selection of Athens as the venue for MR&H 2018 both confirms this and provides the starting point for a new chapter in the story of Greek tourism.
