Hoteliers on the march

A number of Greece’s major hotel companies are attempting a dynamic expansion into Southeastern Europe, investing in the city hotel market. The Daskalantonakis (Grecotel) and Lampsa hotel groups, whose hotels are also right next to each other in Syntagma Square in Athens, as the former controls King George Hotel and the latter owns the Hotel Grande Bretagne, have taken their field of competition to Belgrade. With 41 hotels under its control in Greece (in Athens, Myconos, Kos, Corfu, Larissa, the Peloponnese, Thessaloniki, Halkida, Alexandroupolis and Crete) and one abroad, Grecotel is expanding again outside the country’s borders. Using the same investment scheme (with Eurobank and Germanos) that controls the Sheraton Sofia Hotel Balkan and Casino in the Bulgarian capital, the Daskalantonakis group has acquired the Hotel Metropol in Belgrade via a tender, tabling a winning bid of 27.4 million euros. The group plans a radical renovation of the hotel complex with a total capacity of 218 rooms and its upgrade from a four-star to a five-star unit. Sources suggest that the budget for the modernization of the complex will reach 20 million euros. Grecotel has reportedly knocked on Budapest’s door, too, as sources say it has also acquired a controlling stake in a hotel in the Hungarian capital; other plans by the group include its further expansion into the Southeastern European market, along with the creation of a Hotel Management School in Belgrade. The Lampsa group will also be active in Belgrade with the purchase of 51 percent of the local firm Beogradsko Mesovito Preduzece AD, the owner of the Hyatt Regency Belgrade. The price of the company’s controlling stake reportedly comes to 35 million euros. The Hyatt Regency Belgrade has a capacity of 308 rooms and suites, along with two restaurants, three bars, conference rooms and a sports center. This is the only luxury-class hotel in the Serbian capital, operating at high occupancy rates and profit. Hyatt International will remain the hotel’s administrator for the next 23 years. Nikos Dandolos, the CEO of the Lampsa group, which is listed on the Athens bourse, told Kathimerini that the Southeast European market holds especial interest for Greek hotel groups, given that many other Greek companies operate there and it is a target for further expansion by Greek banks. Within this context, city hotels are at present an attraction for investment, because besides international tourists, they will draw clients from the Greek market as well. Furthermore, the EU-entry prospects of many Balkan countries are an additional advantage for their future touristic and business development. The apparent political stability in the broader region after a long unsettled period creates the conditions and positive prospects already noted by international tourism organizations. With the role it wishes to play in the region, Greece has huge scope for penetration in the tourism domain, allowing for mutual benefits. After all, it is no coincidence that other countries, such as Germany, Austria and Italy, are also investing in the tourism sector of Southeast Europe. Immense prospects According to the World Travel and Tourism Council (WTTC), the region’s countries have immense prospects for further tourism development over the next decade. A WTTC report on Montenegro, in particular, which is set for independence this week, predicts that its annual tourism growth rate will be 10.5 percent, making it one of the most rapidly developing tourism economies among the 174 countries that WTTC monitors. In 2004, the tourism sector contributed 14.8 percent of the state’s gross domestic product (GDP) and accounted for 15 percent of employment. In the next decade, a GDP growth rate of 9 percent is forecast, along with 4.5 percent growth in employment. If Montenegro maintains this growth rate in tourism, the latter is expected to contribute more than 21 percent to the state’s GDP, while in Serbia tourism now accounts for just 3 percent of GDP. In 2003 Montenegro had 600,000 tourists, though only 23 percent of those concerned arrivals from overseas, with the rest coming from neighboring countries. In Romania, tourism contributes 4.8 percent of GDP and 5.8 percent of employment, the WTTC suggests. In the next decade, the annual tourism growth rate will range around 8 percent. Croatia sees its tourism and traveling account for no less than 22.4 percent of its GDP, and expected to rise to 31.6 percent by 2013. The sector contributes 27.4 percent to employment, forecast to account for 34 percent in seven years’ time. WTTC considers Croatia one of the countries with the biggest dependence on tourism internationally. It ranks fifth among the 174 countries monitored, using tourism prospects for the next decade as a criterion. Finally, tourism in Bulgaria makes up 16 percent of GDP and 13.6 percent of employment. The next decade is expected to see an average annual growth rate in tourism of 4.3 percent.