Investment Climate in Greece for Hotel & Tourism Projects
As a global tourism brand Greece, the Aegean Sea and the Greek Islands are top tourism destinations and are now prime for both small and corporate investing. Greece’s continued increase in number of tourism visits, both short and long-stay, over the last decade has been steady and consistent. Even with the financial crisis the impact was limited to a decrease of arrivals (2.6%) and nights spent (2.1%) at hotels, similar establishments and tourist campsites, during January – September 2010 according to Hellenic Statistical Authority. From the Olympic year of 2004 with 14.2 million international visitors to the more than 17 million people visited Greece in 2009, tourism in Greece is expected that in a few years this number will exceed 20 million visitors. EuroValue Consultants Int’l Ltd projects that hotel sales transactions will increase in 2011 due to increased availability from troubled owners mainly in city-center properties. However, the there is also considerable availability of quality sites on islands and coastal regions.
Greece’s Ministry of Culture and Tourism will promote a series of new draft laws in Parliament aimed at promoting special forms of tourism in the country, simplifying licensing procedures for hotels and setting up a special department offering information and services to investors. In a written report to Parliament, Culture and Tourism Deputy Minister Giorgos Nikitiadis stressed that the ministry’s priority was creating a positive investment climate and establishing investment safety through a simplified and transparent framework of licensing tourism investments, which will also protect the natural and cultural heritage of the country and will safeguard public interest. The new department, designed by the ministry, will be responsible for receiving investment plans based on a series of criteria, so that evaluation and coordination of all ministry actions would be made by one agency (one stop shop).
EuroValue Consultants anticipates that in 2011 we will see a new tourism investment era emerging. The increasing number of tourists and the evolving profile of today’s traveler demand a host of new tourism offerings
and infrastructure projects. In Greece, investors will find a wide spectrum of opportunities, a welcome environment for new investment, and some of the most beautiful sites for new developments as well as existing projects ranging from small 20 to 40 room sites to over 300 room resort facilities. According to the 2009 Travel & Tourism Competitiveness Report published by the World Economic Forum, Greece holds the 24th overall position among 133 countries, 3rd place in the prioritization of travel & tourism subindex, 9th place in the number of World Heritage cultural sites, 5th place in tourism infrastructure and 1st place in the physician density subindex.
Nikitiadis reminded the government’s two other initiatives, lower VAT rates for hotels and a new legislation on large investment plans (fast track investments) – were recently ratified in Parliament.
Tourism for Greece is a core economic sector that accounts for 18% of GDP in addition to employing (directly or indirectly) more than 900.000 people, and is the leading source of the country’s invisible receipts (36% in 2007). According to the Hotel Chamber currently, there are over 9,500 licensed hotel properties operating in Greece, however, due to Greece’s many islands and islets, (more than 6,000), the geographical range of tourism destinations available for development is extensive. In addition, the wide variety of natural landscapes, large number of historic sites, traditional villages, and a wide-ranging number of activities mean that investment opportunities are vast.
A modern mythical opportunity presents itself as most of the hotels in Greece which are categorized as 1* and 2*-starhotels, a result of the 60’s to 80’s backpackers days, and meaning that there is plenty of room for investors (former backpackers) to establish upper-end 4*/5*-star properties. And, according to the Greek Hotel Branding Report, branded hotels in Greece account for 4% of the total number of hotels and 19% of total availability of rooms, while in other European countries this figure lies between 25 and 40%. Hotel chains that operate as franchisors will discover attractive opportunities to establish a network of budget, mid-range and upper-end hotels in Greece.
Approximately 85% of arrivals originate in Western Europe: 21.2% from the United Kingdom, 17.5% from Germany, 8.8% from Italy, 5.3% from France, 5.2% from Holland, and 7.5% from the Scandinavian countries. Increasingly, however, significant numbers of visitors from Eastern Europe and China are making Greece their preferred destination, creating a wider base of origin countries and new demands for services, facilities, and attractions.