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Market Intelligence Report APRIL 2013 | PRICE €150 MARKET AREA SNAPSHOT PELOPONNESE, GREECE Nikolas Pavlidis Consulting & Valuation Analyst Themis Trakas Associate Director www.hvs.com HVS ATHENS | 7 Patriarchou Ioakim Street, 2nd Floor, GR‐10675 Athens, Greece HVS MILAN | c/o Hemera Ventures, Blend Tower, Piazza 4 Novembre, 7, 20124 Milan, Italy Summary Peloponnese is the southernmost geographic section of mainland Greece. It features two main connections with the rest of Greece; a natural one at the Isthmus of Corinth and an artificial one in the shape of the Rio‐Antirio suspension bridge that was constructed in 2004. Peloponnese covers an area of 21,550 km². It is a rugged land with a mountainous interior with Mount Taygetus found at its highest point. It possesses four south‐pointing peninsulas, Messinia, the Mani Peninsula, Cape Malea (also known as Epidavros Limera), and Argolida to the east. The climate is purely Mediterranean along the coasts and is therefore ideal for cultivating olives and vineyards. Towards the centre, the climate is continental. This article discusses the Peloponnese hotel market in terms of supply and demand and analyzes past and future tourism trends. Airport Tr a ffic Peloponnese is serviced by two airports: Kalamata International in the southwest and Araxos International in the northwest. Both airports operate primarily as air force bases but also accept charter flights during the summer months from Europe and the Russian Federation. About 93% of visitors to the Peloponnese by air constitute foreign travellers, primarily from Russia, Germany, and the United Kingdom. Table 1 summarizes the passenger traffic movements at the airport for the past nine years. TABLE 1: PASSENGER ARRIVALS, PELOPONNESE AIRPORTS, 2004 – 2012 Year Domestic International Total Change 2004 790 89,057 89,847 — 2005 117 112,363 112,480 25.2 % 2006 71 104,023 104,094 -7.5 2007 3,938 111,710 115,648 11.1 2008 8,021 84,367 92,388 -20.1 2009 8,517 69,755 78,272 -15.3 2010 14,587 72,771 87,358 11.6 2011 14,390 73,085 87,475 0.1 2012 14,338 102,092 116,430 33.1 Compound Annual Growth Rate 2004 - 2012 3.3% Source: Greek Civil Aviation Authority MARKET AREA SNAPSHOT – PELOPONNESE, GREECE | PAGE 2 The following comments apply to the previous table: ¾ Total arrivals grew at a compound annual growth rate of more than 3% during the past nine years, primarily attributed to the domes tic segment. ¾ For 2013, tourism authorities expect a vigorous increase in foreign tourist arrivals by air of nearly 25% as compared to 2012, resulting from new destinations serviced by one of Greece’s airlines in Sweden, Ukraine, Israel, Germany, and the Russian Federation. Kalamata airport alone is expected to host over 200 flights during the 2013 tourism season. Demand for Hotel Accommodation Demand for transient hotel accommodation for Peloponnese is depicted in the following table, illustrating hotel arrivals and accommodated bednights for the most recently‐reported years. TABLE 2: DEMAND FOR TRANSIENT HOTEL ACCOMMODATION, 2005 – 2012 Share Year Hotel Arrivals Change Domestic Change International Change Domestic International 2005 1,384,970 — 865,679 — 519,291 — 63 % 37 % 2006 1,433,244 3.5% 930,028 7.4% 503,216 -3.1% 65 35 2007 1,642,228 14.6% 1,036,479 11.4% 605,749 20.4% 63 37 2008 1,580,380 -3.8% 1,040,852 0.4% 539,528 -10.9% 66 34 2009 1,649,108 4.3% 1,120,102 7.6% 529,006 -2.0% 68 32 2010 1,631,076 -1.1% 1,080,061 -3.6% 551,015 4.2% 66 34 2011* 1,413,965 -13.3% 918,052 -15.0% 495,914 -10.0% 65 35 2012* 1,471,999 4.1% 936,413 2.0% 535,587 8.0% 64 36 Compound Annual Growth Rate 2005 - 2012 0.9% 1.1% 0.4% Accommodated Share Year Bednights Change Domestic Change International Change Domestic International 2005 3,283,247 — 1,762,914 — 1,520,333 — 54 % 46 % 2006 3,194,467 -2.7% 1,930,202 9.5% 1,264,265 -16.8% 60 40 2007 3,987,279 24.8% 2,245,163 16.3% 1,742,116 37.8% 56 44 2008 3,751,465 -5.9% 2,303,770 2.6% 1,447,695 -16.9% 61 39 2009 3,956,147 5.5% 2,511,970 9.0% 1,444,177 -0.2% 63 37 2010 3,822,065 -3.4% 2,391,702 -4.8% 1,430,363 -1.0% 63 37 2011* 3,320,273 -13.1% 2,032,947 -15.0% 1,287,327 -10.0% 61 39 2012* 3,463,918 4.3% 2,073,606 2.0% 1,390,313 8.0% 60 40 Compound Annual Growth Rate 2005 - 2012 0.8% 2.3% -1.3% * HVS Estimate Source: National Statistical Authority of Greece Demand for hotel accommodation is primarily generated by the domestic market with about 65% of arrivals and 60% of overnight stays. The peak visitation period occurs from May to September, when the majority of foreigners and about 65% of Greek nationals visit the region. The average length of stay has been about two days for domestic visitors and nearly three days for international visitors. MARKET AREA SNAPSHOT – PELOPONNESE, GREECE | PAGE 3 Supply The 2012 supply of the hotels, rooms, and beds in Peloponnese is illustrated in the following table. The primary room stock relates to hotels of lower star classification, while five‐star hotels constitute only 2.5% of the total. The Peloponnesian hotel market represents only 8.5% ot the total Greek room supply, about 6.5% of the total rooms available in Greece, and about 7% of the total Greek bed supply. TABLE 3: HOTEL, ROOM, AND BED SUPPLY IN PELOPONNESE – 2012 Prefecture 5* 4* 3* Other Total Share 5* Market Share 4* Market Share Argolida 6 22 27 91 146 18% 30% 19% Arkadia 1 21 33 46 101 12% 5% 18% Ahaia 0 20 34 57 111 13% 0% 17% llia 4 12 19 49 84 10% 20% 10% Korinthia 3 13 33 60 109 13% 15% 11% Laconia 2 21 61 49 133 16% 10% 18% Messinia 4 9 42 86 141 17% 20% 8% Total Units 20 118 249 438 825 100% 100% 100% Total Rooms 4,017 5,249 7,704 9,771 26,741 15% 20% Total Beds 8,547 10,290 14,889 18,665 52,391 16% 20% Source: National Statistical Authority of Greece Tourism Infrastructure Developments The most important recent and future tourism infrastructure developments that are anticipated to potent ially contribute towards further growth of the tourism industry in the Peloponnese are: 1. The 2010 opening of two Starwood‐branded luxury resort hotels in Messinia. 2. The 2012 opening of an all‐suite luxury Aman Resort in Argolida. 3. The completion of the highway connecting Athens with the western part of Peloponnese (passing through Elefsina‐Korinthos‐Patra‐Pyrgos‐Tsakona) which includes the construction of 284 km of a six‐lane highway and the improvement of another 82 kilometres of existing road network. 4. The completion of the highway connecting Athens with Kalamata (passing through Korinthos and Tripoli) at a total of 204 kilometres including 24 multi‐level interchanges. 5. The projected improvements at Kalamata International Airport estimated at €25 million. 6. The possible conversion of the military airports in Andravida and Tripoli to commercial ones for the purpose of accepting low‐cost civilian flights as well as cargo flights. 7. The upgrading of the marina in Monemvasia towards the southeast Peloponnese. 8. The budgeted improvements upon existing cultural sites throughout the region estimated at €71 million. 9. The provision of business subsidies throughout Peloponense estimated at €22 million. 10. The development of new branded hotels expected to enter the market in the next 2‐4 years. MARKET AREA SNAPSHOT – PELOPONNESE, GREECE | PAGE 4 Conclusion The unique natural beauty, ease of access, improving road network infrastructure, and new / upcoming hospitality developments provide every reason to expect that Peloponnese is set to have a promising future. The cluster of existing and upcoming hotels is anticipated to eventually create a quality tourism destination in its own merit and a unique opportunity for visitors to experience original Greek hospitality in an untouched environment full of culture and scenic landscape. Recently‐announced state efforts, geared around the extension of the tourism season from the currently‐ effective five months to seven months in the short‐term and potentially 12 months, capitalize on the region’s agricultural resources (nearly 13% of Greece’s agricultural industry is located in Peloponnese) and its connection with tourism to create a unique destination brand. MARKET AREA SNAPSHOT – PELOPONNESE, GREECE | PAGE 5 About HVS About the Authors HVS is the world’s leading consulting and services Nikolas Pavlidis joined HVS in 2012 as a organization focused on the hotel, restaurant, shared Consulting and ownership, gaming, and leisure industries. Established in Valuation Analyst. He 1980, the company performs more than 2,000 holds a Bachelor of Arts in International assignments per year for virtually every major industry Hospitality & Tourism participant. HVS principals are regarded as the leading Management from professionals in their respective regions of the globe. Swiss Alpine Center in Athens, Greece. Through a worldwide network of 35 offices staffed by 400 seasoned industry professionals, HVS provides an He can be contacted at [email protected] or +30 (210) 361‐2085. unparalleled range of complementary services for the hospitality industry. For further information regarding our Themis Trakas is an expertise and specifics about our services, please visit Associate Director with the HVS Athens Office.
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