BUSINESS

The big Greek hotel rush is on

The big Greek hotel rush is on

Property market officials and hospitality consultants anticipate a resurgence in investment activity in hotel properties over the second half of 2021.

The low financial costs, the large volume of available liquidity and the profusion of investment funds seeking high returns and investment opportunities paint a particularly favorable picture for those expecting a significant increase in investments.

According to an analysis by Xenium Advisors, which specializes in hospitality consultancy, the low volume of hotel unit transactions during 2020 further favors a rise in transactions this year.

Some significant moves have already been noted in the first half of 2021. For example, Hotel Investment Partners (HIP), a member of the Blackstone investment group and one of the biggest hotel unit owners in southern Europe, recently struck a deal for the takeover of the Elounda Blu hotel from Ledra Hotels & Villas. 

Elounda Blue is a four-star unit with a capacity of 183 rooms in eastern Crete, with Spain’s HIP already publicizing its intention to invest a further 6 million euros in the upgrading of the hotel’s facilities and in turning it into a five-star resort.

This the second move by HIP in the local market, after acquiring five units from the Louis Group in November 2019. Along with the Elounda Blu buy and the upgrading expenditure for the units already bought, it is seen to have invested €250 million in Greece already.

Another significant move recently has been the emergence of US realty group Hines as the winner of the tender for the “Out of the Blue Capsis Elite Resort” in Crete for €125 million.

The Xenium analysts argue that the tourism sector will not return to 2019 levels before 2023. However, as uncertainties gradually recede, investors have started making their way back to the hotel sector ahead of the full recovery. 

The greatest demand is spotted in major seaside units located at popular tourism destinations that offer a margin for future capital gains through upgrading investments and a more professional and modern approach to management. The target is usually four-star family enterprises that can easily graduate to five-star units.

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