The hotel sector in Greece features 9,500 properties, of which between 1,500 – 2,000 hotels are reportedly for sale. These range from small, 30-40 room properties, to some of the largest hotels in the country.
A number of reasons exist for the large number of properties on the market:
The general Greek tourism market is uncompetitive, with too many Greek hotels offering a basic, an undifferentiated accommodation product and generally poor or basic service quality. There is overcapacity in nearly every accommodation category.
Seasonality is high: most hotels now close between November and March. This is an indication not only of a failure of regional and national tourism promotion, but also of poor marketing by individual hotels or hotel alliances interested in creating an off-season product.
Direct and indirect taxes and input costs are rising: the recent increase in Greek property taxes as well as electricity costs, and the decision to raise corporate income tax to 22%, have all played a negative role in hotel profitability.
The incoming segment remains dominated by internet channels and tour operators: most hotels no longer do consumer marketing, which is a strategic error. At the same time, domestic tourism has fallen due to the economic crisis.
Navigator was recently commissioned to implement a hotel investment study in Greece by an international client. Our work includes:
Market scanning and price analysis for Greek hotel properties for sale
Detailed analysis of Greek tourism seasonality, hotel occupancy, room pricing and transport access
Detailed profitability and sales analysis for room and non-room hotel income
Financial modelling of a potential hotel investment
Detailed analysis of direct and indirect taxes and hotel costs
Impact of the Greek privatisation programme and ongoing investments in the tourism sector
Hotel licensing and investment procedures.
This is the most recent of several hotel investment studies in Greece, Cyprus and other countries implemented by Navigator Consulting Group. For further information, please contact us.