While Greece continues to fight its way out of economic uncertainty, the island of Crete is seeing some positive overnight numbers and investment from international brands. HVS recently released a study on the island's numbers, noting that following the downturn of 2010-2012, the island's hospitality sector is improving.
BY THE NUMBERS
Crete experienced an 18-percent increase in international airport arrivals and an estimated growth of 15 percent in tourism revenue, HVS found. The island's hotel market showed relative resilience to the economic-political turmoil in Greece, with relatively steady occupancy levels and average room charges during 2010-12, leading to a moderate increase in RevPAR of slightly over 1 percent.
Over the last seven years, upscale (five- and four-star) hotel room supply in Crete recorded significant increase as hotel investment activity remained intensive.
In the future, the area of Lassithi is posed to see additional hotel construction activity, with two major tourism developments that include mixed-use properties and extensive lodging and other tourism facilities.
Various international and local hotel operators have presence in Crete. The international companies of Iberostar Hotels and Resorts, Sentido Hotels and Resorts, Atlantica Hotels and Resorts, Robinson Club, and Starwood Hotels and Resorts own and/or operate under various agreements 7.5 percent of all upscale hotel rooms in the region of Crete.
Local hotel management companies appear to have a very strong presence in Crete with Grecotel, Aldemar, Helios Hotels, Aquis, Aquila, BlueGR, AKS Hotels, Cyan Group, Elounda Hotels and Resorts, Giannoulis Hotels and Resorts, Hersotels, Mitsis, and Sbokos Hotel Group being the main ones.
These hotel groups own and/or operate under various agreements 27 percent of all upscale hotel rooms on the entire island. There are also several hotels that have joined international hotel marketing consortiums including The Leading Hotels of the World, Relais & Chateaux and others.
The proposed Sitia Bay Golf Resort developed by Dolphin Capital Investors is planned to be positioned in the market as a luxury golf resort operated under a management contract with Hilton Hotels and its top-tier Waldorf Astoria brand. As we reported earlier this week, the hotel is being developed by Dolphin Capital Investors (DCI) as the group looks to kick off a series of investments worth a total of more than 1 billion euros in five destinations across the country between 2014 and 2016.
The proposed investment is expected to be developed on a 280-hectare land plot. The hotel unit will have 177 guestrooms and a residential component with 620 (150 branded and 470 non-branded) villas by the beach and on the plateau measuring 80,000 square meters of buildable space. In addition to guestrooms and villas, the resort will have an 85-berth marina and an 18-hole championship golf course. According to the owning company, the final construction permits for Phase 1 were issued on October 14, 2009; however, HVS reports that the project is still on hold.
DCI is also poised to open a third Hilton hotel in Crete. Construction is expected to begin next year.
Since 2005, Minoan Group Plc has put serious efforts in developing the Cavo Sidero Project. The project has evolved out of the old Cavo Sidero Project which included about 7,000 beds. The old project, approved in 2007, was annulled by the Conseil d’ Etat on planning grounds in December 2010. The new project is designed to be in line with the ruling of the Court and with the subsequent changes in Greek planning Laws.
This meant that the final design had to undergo a number of iterations as new laws were introduced piecemeal during 2011. The construction cost of the new project is estimated at over €250 million and, according to the company, will be undertaken through one or more joint ventures with appropriate partners. The site, in Itanos, Lassithi, is expected to be held on a long lease granted by the Ecclesiastical Foundation Panagia Akrotiriani and comprises over 6,000 acres. The company plans to make use of the Spatial Development Plans for Strategic Investments (ESCHASE in Greek) that allows the State to intervene in cases of strategic investments with regards to spatial identification, land use, identification and assignment of the seashore and beach, etc.