Why are hotels in Athens becoming more profitable?

For the third quarter of 2015, European hotels investment volumes increased 42 percent year-on-year, according to CBRE’s Q3 2015 European Hotel Investment MarketView. As Real Estate Europe reports, the sector now accounts for 9 percent (€16.1 billion) of capital invested into real estate, compared to 3 percent (€5.2 billion) in 2007. Over the last year, European hotel investment has included a growing amount of institutional capital. 

Significantly, Athens' hotels have grown in profitability by 6 percent year-on-year for from September 2014 to September 2015 due to decreasing payroll costs and stable inbound international travel. Lack of product and debt present two major barriers to this development, the story notes, but successful recapitalization of the Greek banking sector may re-open the lending market and could bring up some non-performing loans with a hotel component.

“Private equity funds have been recycling their capital and targeting opportunities in Southern Europe as they hunt for yield," Dominic Murray, head of cross-border transactions EMEA for CBRE Hotels, said. "With increasing competition to acquire assets in Spain and Italy driving up values, Greece could be the next target for opportunistic investors should they have confidence in economic and political stability going forward.”

Virtual Event

Hotel Optimization Part 3 | January 27, 2021

With 2020 behind us and widespread vaccine distribution on the horizon, the second half of the new year is looking up, but for Q1 (and most likely well into Q2) we’re very much still in the thick of what has undeniably been the lowest point of the pandemic. What can you be doing now to power through and set yourself up for a prosperous 2021 and beyond? Join us at Part 3 of Hotel Optimization – A Virtual Event on January 27 from 10am – 1:05pm ET for expert panels focused on getting you back to profitability.