Ahead of the International Hospitality Investment Forum, presented by Questex, parent company of Hotel Management magazine, Enterprise Greece CEO Georgios Filiopoulos shared his thoughts on what investors need to know about Greece's hotel sector.
Enterprise Greece is the official agency of the Greek state, under the auspices of the Ministry of Foreign Affairs, to promote investment in Greece, exports from Greece and to make Greece more attractive as an international business partner.
Can you tell us about the Greek hospitality sector as it currently stands?
Greek tourism is booming and with it investor interest in the Greek hospitality sector.
Greece welcomed more than 30 million visitors in 2018 and collected €15.9 billion in revenues from tourism. That marked a new record year for Greek tourism—its fifth in a row–and 2019 appears to have set a new record. The sector accounts for more than a quarter of Greek GDP and one in three jobs, and Greece is on its way to becoming one of the Top 10 tourist destinations in the world.
As a result, over the [past] three to four years Greece has seen a sharp increase in both local and foreign investment in the hospitality sector–particularly in four- and five-star hotels–and including from major multinationals like TUI or Wyndham Hotels [& Resorts]. According to a recent study by Greece’s tourism industry think-tank, INSETE, total investments in the hotel sector last year alone increased 46 percent to €2.26 billion. Further, foreign direct investment in tourism and property last year totaled €1.5 billion representing almost half of total FDI inflows into the country in 2018.
Greece is now one of the hottest investment destinations for the hotel and resorts sector in Europe.
How is Greece perceived by international investors in general?
Greece is garnering the attention of foreign investors because the country has successfully entered a new era. The economy is recovering, exports and tourism are booming, privatizations are gathering pace and Greece offers many advantages and opportunities: attractive asset prices, excellent human resources, a geo-strategic location, as well as a breathtaking landscape and Mediterranean climate.
The extensive reforms over the [past] decade and the successful return to the bond markets have inspired new confidence in international investors. Trends in the financial markets reflect that perception of Greece. Greek government bond yields are at record lows and the Athens stock exchange has been one of the best performers in Europe over the past 12 months. Foreign direct investment is at a record high and international ratings agencies have been steadily raising their credit ratings for the country.
But the Greek government is committed to making Greece an even more attractive investment destination by cutting taxes, slashing red tape and pushing ahead with major investment projects.
For example, Greece’s parliament recently adopted a sweeping, omnibus investment law aimed at everything from streamlining regulations to promoting the use of online government services. The new law introduces hundreds of changes to reduce bureaucratic hurdles to investment.
In addition, new legislation will cut both corporate and personal tax rates, as well as reduce taxes on dividends and corporate bonds to help spur investment.
Which are the most promising areas for hospitality investment in Greece?
One of Greece’s competitive advantages is the astonishing variety of destinations and attractions the country offers. Traditionally, the Greek tourism product has been focused on sun-and-sea destinations given the country’s many islands and Mediterranean climate.
But there also are spectacular mountain destinations, cultural heritage sites, a vibrant contemporary arts scene, thermal springs and major religious sites. Greece also offers a a unique cuisine and viniculture that are at the heart of the Mediterranean diet. These other facets of Greece lend themselves to adventure and sports tourism, gastronomy and wine tourism, corporate retreats, spa and wellness tourism, religious tourism and so on.
A recent PwC study outlines three growth strategies for Greece’s hospitality sector in the years ahead. The three strategies include: the development of secondary destinations, further investment in primary destinations and upgrading the existing hotel stock into higher categories. Of these three strategies, PwC identifies the development of secondary destinations as the most promising in terms of value added.
What is the role of Enterprise Greece when it comes to foreign investment in Greece?
Enterprise Greece is the official investment and trade promotion agency of the Greek state, under the supervision of the Ministry of Foreign Affairs. Its mission is to facilitate foreign investment in Greece and to promote the export of Greek products and services abroad.
The agency is a one-stop shop for investors...we also advise and support the government in making Greece a more-attractive investment destination. For example, Enterprise Greece helps shepherd major strategic investments through Greece's fast-track process. In total, 19 major strategic projects have been included in the fast-track process, including nine relating to the tourism sector and with a combined budget of €1.8 billion.