Get to know the hot field in Greece - investment in the hotel industry

The tourism industry continues to grow, and together with the Israeli fondness for real estate, the investment genre in hotels has grown in Greece. What are the advantages and disadvantages of investing?

Matan Partman and Ran Harel, guest column

07/28/2022

Thursday, July 28, 2022, 1:32 p.m

• Share on Facebook

• Share on WhatsApp

• Share on Twitter

• Share by email

• Share in general

• Comments

  Comments

The tourism industry experienced a significant upheaval following the corona epidemic.

The growing industry, which is responsible for about 4.4% of the GDP in the OECD countries and about 6.9% of the total number of people employed in these countries, has experienced an unprecedented crisis in its scope, with a dramatic decrease in occupancy rates, beyond losses in most hotels and even temporary or permanent closure of hotels.

But about a year later, the world learned to live alongside the epidemic, including by vaccinating the population, and the global tourism world soon returned to prosperity - so much so that many markets predict that 2022 will be more profitable than 2019, before the Corona crisis.

The real estate investors who know how to look at things for the long term - discovered from the crisis the opportunity of investing in the hotel industry in many destinations in the world, one of the most prominent of which is Greece.

The numbers even exceed 2019 (Photo: Yehcat)

The arrival of investors in Greece is not surprising - along with its spectacular beaches, great food and impressive historical culture, it is one of the cheapest capital cities in Europe, which allows an investor to purchase buildings at significantly lower prices than before - when in 2018 the trend of falling prices reversed and now real estate prices in Greece are rising at an annual rate of 6%-8%, while in Athens the increases are even higher. The country is undergoing a significant revolution, while the debt crisis with Germany is over, inclusion is in constant growth, and the local government is helping to bring in foreign investors by reducing taxes and providing various grants.

In the world of tourism in Greece, it seems that since the days of the crisis the trend is positive.

In 2019 before the corona virus, revenues from tourism were about 18 billion euros.

In 2020, during the Corona crisis, revenues dropped to five billion euros.

In 2021 there was a recovery and the revenues stood at ten billion euros, while in 2022 the estimates are that the revenues will reach about 18 billion euros - just like in 2019. Against the background of a shortage of hotel rooms and rising inflation, the forecasts for 2023 are expected to be even higher, which creates optimism among Real estate investors.

From Airbnb to office buildings that become hotels

More and more Israelis are investing in tourism and hotels in Greece.

Some investors choose to purchase an apartment for investment and rent it out, long-term or through a platform such as Airbnb.

On the other hand, the more complex investments are made by professional entities, and they are expressed in the improvement and change of designation of existing buildings. Many entities purchase office or residential buildings - and turn them into hotels. The international management companies, such as Hilton or Radisson, join many of the projects, allowing the residents to benefit twice - Both from the current flow, and from an increase in the value of the building after its improvement.

good to know (in advance)

Due to growing demand for effective pain treatment: B-Cure laser in a special offer

Served on behalf of B Cure Laser

Tourism is on the rise, and it's time to invest (Photo: Public Relations)

Projects of this type enjoy significant benefits from the state.

The authorities in Greece recognize the country's strengths, and seek to increase investments in the tourism industry - including through foreign investors and foreign money that will enter the country, and help increase the number of jobs for citizens, and encourage growth.

Among other things, there are benefits to encourage capital investments through a law defining 13 new entrepreneurships to aid investments, ranging from hi-tech to the tourism industry.

Location is the name of the game

Ran Harel and Matan Partman (Photo: Yehats)

The main investment areas are both in the big cities, including Athens, and on tourist islands.

The well-known Mykonos and Santorini, along with Paros, which is considered the next pearl, are good examples of destinations with high demand for tourism and investment, and when we see as of 2022 that the length of stay of a tourist has increased from two to four-five days, the growth is felt in every measure.

And what is expected in the future?

According to the forecasts, despite the Corona crisis and the war in Europe, the Greek economy is expected to grow by about 4% this year.

Greece, which has seen the world grow significantly since the subprime crisis in 2008, began its growth trend only recently, when real estate prices remained far behind compared to parallel cities. The tourism industry is expected to continue to be a central and growing pillar of the Greek economy, and despite The challenges of inflation in the global economy, real estate investments for hotels in Greece are expected to benefit from growth over time.

• It is important to carry out this type of move in a controlled manner and to use experts who know the local market from all sides and can give the potential investor the toolbox required throughout the process.

• Real estate

• Sand

Tags

• Greece