Tourism Investment Potential

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Benedict McDaniel
5 years ago
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1 Prodexpo October 2016 October 2016 Tourism Investment Potential 1

International Tourist Arrivals & Receipts Greek Tourism continues its positive trend in spite of negative internal and external factors and has become the most promising sector for new investments in

2 International Tourist Arrivals & Receipts Greek Tourism continues its positive trend in spite of negative internal and external factors and has become the most promising sector for new investments in Greece Projections Arrivals (mil) 31,5 For the fourth year in a row tourism will achieve a new record high both in arrivals and in receipts from foreign visitors. It will continue its positive trend which started in 2010 with an estimate for 25 million visitors and 14 billion in receipts in 2016, that is without including the arrivals and revenues from cruises. Arrivals have increased by 67% since 2010, while at the same time, the receipts have increased by 46%. Estimates for the upcoming years are equally positive. At the 16th Prodexpo conference in 2015, Algean Property estimated that arrivals could reach over 30 million and receipts 20 billion in 2020, on condition that necessary investments were made in the sector. This estimation was confirmed a year later by SETE in the 15th SETE conference on of October e % Receipts (bil ) 2016e % Arrivals (mil) Receipts (bil ) 2

3 High End Tourism Greece Corfu 33% 26% Chalkidiki Messinia Mykonos Legend Athens Rhodes International Arrivals 5 Star Hotel Beds Herakleio Elounda Santorini Greece should aim at high-end tourism in order to achieve these targets. Even if the receipts and the daily expenses per visitor do not confirm it (Greece s share is still relatively low in the total number of arrivals), there is a growing trend in high-end tourism. The following figures confirm our assumptions: 1. Increase in international airport arrivals in prime Greek destinations. The total international airport arrivals have increased over 30% in the last 5 years while the corresponding increase in indicative high end destinations is: 148% for Mykonos, 96% for Santorini, 50% for Corfu and 161% for Messenia. 2. Increase of five-star hotels in the top Greek destinations. The increase for 5star hotel beds was 26% in the last five year, while for the total hotel bed capacity it was only 3%. The increase for some of the high-end destinations was: 91% for Mykonos, 186% for Santorini, 49% for Elounda and 28% for Argolida. 3

4 High End Tourism Holiday Home - EOT Licences 3. High-end holiday homes available for rental, offering attractive returns to their owners. According to the latest available data, approximately 10,800 holiday homes have been registered in the Registry of the Ministry of Tourism, 71% of which were registered in the last three years. Holiday homes partially fill in the lack in high-end hotel units. Regardless of the upgrading that has taken place in the last years, the 5-star hotel rate is equivalent to only 16.5% of the total capacity. 4

5 Investors Eye The existing track record and the great prospects of Greek Tourism have drawn the attention of investors who realize that they can ensure very attractive returns by the acquisition and eventual rental of a holiday home or by the acquisition and development of a large hospitality investment. However, there are factors that still make potential investors reluctant, i.e. new political turmoil, the unstable tax framework, the lack of financing, the bureaucracy and the lack of transparency that increase the investment risk. 5

6 SWOT Analysis Strength Weakness The following graph presents a SWOT analysis for Greek tourism investment potential. The prospect is very promising if the necessary investments take place: development of infrastructure, airports, ports and roads, but also in upgrading the tourist product. Investments which upgrade the existing product, will enhance the classic Sun & Beach model with more exclusive facilities and will develop alternative types of tourism with competitive advantages, i.e. religious, cultural, medical and gastronomic tourism. EU member - Euro Existing Track record Location Culture Lifestyle Hospitality Safety Climate Coastline Landscape Infrastructure Human Capital - Experience Lack of International Brands Lack of Quality Supply Seasonality Bureaucracy Lack of Transparency Lack of Financing - NPLs Concertation of Supply Greek tourism is at the critical point where investments in this sector are very profitable but at the same time necessary for it to go to the next level. The Greek government should allow these investments to materialize. The upgrading of the 14 peripheral airports, the Astir Palace, the Hellinikon project, as well as the blocked hospitality projects in various holiday destinations, such as in Corfu, Crete and Rhodes, are necessary for the development of Greek Tourism, but are also necessary for Greece to regain its lost credibility, eliminate investor concerns and attract new investments. Opportunity Tourism Growing Trend Competitive values Turmoil in Competitive Countries Infrastructure developments Lack of quality supply Lack of international brands Untapped Potentials - New sectors for investment Threat Future political and economic instability Mass tourism Unstable Tax Regime Investment Framework Refugee crisis Terrorist Activity Brexit Infrastructure Delay of announced Developments 6

7 Our Latest Reports Contact Athens 78,Kifisias Avenue, Marousi 15125, Athens, Greece T : London 19,Portland Place W1B1PX, London, UK T : +44 (0) welcome@algeanproperty.com

Yields Report 2018: High End Holiday Homes in the Mediterranean

Yields Report 2018: High End Holiday Homes in the Mediterranean Yields Report 018: Yields Report 018: It has become clear that the holiday home market is the most evolving branch of the real estate market in the Mediterranean. Having identified the market s dynamics,