Greece's hotel sector is expected to draw billions of euros of new investments in coming years from Greek and foreign investors as the rate of branded hotels remain low amidst continued strength in tourism.
Estimates show that investments in Greek hotels and the broader tourism sector over the next five years will reach 9 to 10 billion euros, of which 7 billion euros will be funded by local banks through loans.
These investments come after new hotel units were recently built in Athens, Thessaloniki and other popular parts of the country, paving the way for large global players to enter the market. Interest from foreign hotel groups looking to boost their presence in the Greek market is growing as they work on development plans for tens of new units.
According to GBR Consulting, there is room for more branded hotels to enter Greece as the number of unbranded hotels in the country is high. At the end of 2018, less than 8 percent of the country's hotels, numbering some 10,000, were branded.
This rate increases to 27 percent, based on the number of rooms available in Greece, data shows. Hotel chains account for 59 percent of five-star hotels in Greece, 41 percent of four-star hotels and 4 percent of three-star hotels. On a rooms basis, 70 percent of five-star rooms and 41 percent of four-star rooms belong to hotel chains.
Hotel investments completed so far have upped supply levels, particularly in the four-star category, between 2016-2019. Research commissioned by Athens hoteliers shows that the number of four and five-star rooms available in Athens increased by 24 percent and 3 percent respectively, resulting in a 2.4 percent drop in occupancy rates in September.
The list of new hotel resorts being planned for different parts of the country is impressively long and continually growing.
At the start of November, a building permit was issued for Kilada Hills which is being developed by Dolphin Capital in Ermionida, Argolidas, in a 420 million euro project. In Crete, Elounda Hills is moving ahead in a 410 million euro investment that will include villas, hotels, a marina, sports facilities, and a health center.
At the same time, NCH Capital is planning a five-star resort spreading over five hectares at Kassiopi, Corfu, while M. A. Angeliades and Aegean Sun Investments are moving ahead with a 2,600 room resort in Afandou, Rhodes, budgeted at 300 million euros after many years of delays. More large scale investments are coming from Temes that will further develop the Costa Navarino resort in a 600 million euro plan that will include two new golf courses, new hotels, and villas.
A new player for the market is Brown Hotels that is eyeing at least ten hotels in Athens and Thessaloniki after having already purchased and leased buildings in central parts of the two cities. In Athens, Brown Hotels will open its first hotel in Omonia, at the former Acropol Hotel, that has been leased to the Michaelidis family, and offers 165 rooms. Its second investment is also located at Omonia and is expected to open its doors at the start of next year. Additionally, the nearby former headquarters of the Communist Party of Greece has also been sublet to be turned into a hotel.
Meanwhile, billions of euros are being poured into the Athens riviera by Lamda Development with the Hellinikon urban development complex, the biggest investment to take place in Greece for decades.