Hotel Industry 2019 HOTEL INDUSTRY REPORT Facts, Trends and Prospects in Greece 2019 1 Hotel Industry 2019 Overview The hotel industry is tourism’s most units renovated their facilities the market, foreseeing the excellent vital component and its significant while new developments emerged prospects being created. growth lately has positively throughout the country thus adding As the Greek economy continues affected all key tourist figures and quality and quantity to the overall its recovery and the country is performance indices. hotel capacity. entering a period of political The need to keep the Greek tourist Tourism’s recent impressive stability, conditions are ideal for product competitive and address performance has attracted the the industry’s further strengthening the ever increasing international interest of domestic and foreign and development which will allow demand, has led to the sector’s investors, consequently, large hotel the Greek hotel sector to reach its gradual upgrading over the last chains and hotel management true potential. few years. Many existing hotel companies have strongly entered Legal Framework According to Article 1 of • Tourist Accommodation in • Organized Tourist Camps Law 4276/2014, Tourist buildings of architectural (Camping) accommodations are the tourist heritage • Youth Hostels business that hosts tourists and Hotels belong to the “Main • Complex Tourist provides them with accommodation Hotel Accommodation” tourist Accommodation and other accommodation- establishment subcategory and • Co-Ownership Hotels related services such as dining, are defined as accommodation (Condo Hotels) entertainment, recreation, sports. establishments which can provide According to Article 32, Law The main hotel accommodation overnight accommodation in rooms 4582/2018, for the classification can be built either independently or apartments of one or two or of all Main Hotel Accommodation or in combination with a special more bathrooms, common areas, in star category, the Greek tourist infrastructure and can be guests’ stay, and a breakfast room Chamber of Hotels is designated as distinguished as follows: for at least one meal. The same the competent body. • Main Hotel Accommodation subcategory includes the following • Non-Main Hotel Accommodation types of establishment: Hotel Capacity According to the latest official data for the year 2018, the total number of hotel units reaches 9,873, with 425,973 rooms and 835,773 beds. In the last six years, the increase in units, rooms and beds has not been comparable to the booming increase in tourist numbers in the country (international arrivals, tourist expenses). In particular, for the period between 2013 and 2018, hotel capacity increased by +2.0%, while the corresponding increase for rooms and beds stood at +6.1% and +8.0%, respectively. 2 Hotel Industry 2019 Hotel Capacity Greece 2013 - 2018 2013 2014 2015 2016 2017 2018 % 2013 – 2018 Units 9,677 9,745 9,757 9,730 9,783 9,873 +2.0% Rooms 401,322 404,779 406,200 407,146 414,127 425,973 +6.1% Beds 773,445 780,721 784,315 788,553 806,045 835,773 +8.1% Source: Greek Hotel Chamber While taking a closer look at the +45.2% (2013: 57,878 – 2018: and the renovation of existing structure and evolution of the hotel 82,496) while the corresponding ones, with 41.3% of the total costs capacity by category, we notice number of 1-star hotels decreased being for bedrooms in four and five that, between 2013 – 2018, the by -9.3% (2013: 28,334 – 2018: star units. According to the latest number of four and five-star hotels 25,688). Finally, the total “beds” official data, the total number of increased significantly, as opposed capacity for 5-star hotel units hotel chains operating in Greece to one, two and three-star category increased by +42.5% (2013: stands at 209, ranking 4th overall hotels where a decrease was 117,555 – 2018: 170,673) while in Europe, behind only from Spain recorded. Correspondingly, the the corresponding number of 1-star (253), Italy (240) and Germany same changes were recorded in hotels decreased by -8.3% (2013: (222), and recording a +5.6% the capacity of both “rooms” and 54,226 – 2018: 49,736). increase compared to 2019 (198 “beds”. For the period between The qualitative upgrading of brands). The total number of units 2013 – 2018, the number of 5-star the hotel capacity in Greece is belonging to hotel chains reached hotel units increased by +42.9% due largely to the penetration of 730 in 2018 (7.4% of the country’s (2013: 361 – 2018: 550) while large hotel chains as well as to total hotel capacity), marking an the corresponding number of 1-star the strengthening of the domestic increase of +5.0% compared to hotels decreased by -9.3% (2013: ones. It is characteristic that 2017 (695 units). The total rooms 1,478 – 2018: 1,340). over the last 2 years a total of capacity is 12% of the country’s The total “rooms” capacity for €3.8bil. has been invested for the total (101,021 chain rooms). 5-star hotel units increased by development of new hotel units 3 Hotel Industry 2019 Greek Hotel Capacity 2018 Eastern Attica Macedonia & Thrace 5* 4* Total 5* 4* Total Units 12 30 386 Units 33 118 649 Rooms 1,207 1,908 11,234 Rooms 6,414 9,480 32,250 Beds 2,441 3,966 22,385 Beds 12,295 18,276 61,029 Northen Agean Western Greece 5* 4* Total 5* 4* Total Units 8 34 392 Units 4 44 273 Rooms 939 1,686 11,924 Rooms 1,461 2,430 9,720 Beds 1,909 3,166 22,752 Beds 3,127 4,751 18,973 Western Macedonia Epirus 5* 4* Total 5* 4* Total Units 3 15 122 Units 14 101 431 Rooms 61 343 2,794 Rooms 1,052 2,049 8,850 Beds 137 735 5,927 Beds 2,201 4,348 17,931 Thessaly Ionian Sea 5* 4* Total 5* 4* Total Units 29 117 552 Units 50 150 965 Rooms 1,442 3,576 14,656 Rooms 7,126 13,298 50,066 Beds 2,943 7,171 28,824 Beds 14,642 26,151 98,223 Central Macedonia Crete 5* 4* Total 5* 4* Total Units 52 118 1,186 Units 118 296 1,598 Rooms 8,967 9,673 46,257 Rooms 21,525 29,867 94,288 Beds 18,718 19,222 92,290 Beds 44,248 58,959 182,296 Southern Aegean Peloponnese Sea 5* 4* Total 5* 4* Total Units 194 385 2,120 Units 25 125 672 Rooms 29,301 34,351 108,991 Rooms 2,771 4,451 19,447 Beds 60,598 68,900 216,954 Beds 5,903 8,790 38,461 Mainland Greece Greece - Total 5* 4* Total 5* 4* Total Units 8 48 527 Units 550 1,581 9,873 Rooms 680 3,033 15,496 Rooms 82,946 116,145 425,973 Beds 1,511 5,967 29,728 Beds 170,673 230,402 835,773 Source: Greek Hotel Chamber 4 Hotel Industry 2019 Hotel Performance The performance of the Greek hotel industry has been impressive, Greek Hotels 2013- 2018 Average Occupancy Rate especially in recent years. The country’s steady growth in tourist figures (international 57.0% 60.0% 54.5% arrivals, tourist spending) has 52.8% boosted the hotel industry’s basic 49.1% 50.1% 50.0% 45.2% 47.3% KPI’s (Occupancy Rate, ADR, RevPaR), creating expectations 40.0% for the sector’s further growth. More specifically, for 2018, the 30.0% occupancy rate of beds in hotel 20.0% type accommodation has recorded a +3.2% growth* (provisional 10.0% data) compared to last year, while 0.0% it should be noted that, for the 2013 2014 2015 2016 2017 2018(9month) 2018f period 2013-2018, the figure is exponentially higher (+20.6%), Source: Greek Statistical Authority eloquently reflecting the progress being made the last 6 years. Average Daily Rate (ADR) recorded in popular destinations in Greece came as a confirmation of the positive year for the industry. An analysis on “Sun and Sea” destinations shows that the Cyclades is the most expensive destination, recording an ADR of €204 followed by Chalkidiki (€134), the Ionian Islands (€120), Crete (€110) and the Dodecanese Islands (€98). Average Daily Rate(€) - «Sun & Sea» Destinations - 2018 Dodecanese Islands Ionian Islands Crete Cyclades Chalkidiki 98 121 111 204 134 Source: Trivago – SETE Intelligence edited by Algean Property Research team “Main Destinations” analysis shows that Mykonos is the leader, recording an ADR of €216, followed by Santorini (€211), Athens (€110) and Thessaloniki (€91). Average Daily Rate(€) - Main Destinations - 2018 Athens Thessaloniki Mykonos Santorini 110 95 221 213 Source: Trivago – SETE Intelligence edited by Algean Property Research team *Source: Provisional data from the Hellenic Statistical Authority (ELSTAT) and EUROSTAT edited by Algean Property Research Team 5 Hotel Industry 2019 Taking a closer look into the industry and tourism in general. established summer destinations monthly average daily rate/ Main cities in Greece (Athens, like Mykonos, Chalkidiki, Crete category/region, we notice the Thessaloniki) depending on the and the Ionian Sea, areas that strong seasonality recorded, a “City Break” tourism model, follow rely heavily on the “Sun and Sea” phenomenon that defines the hotel the same arrival pattern as well- tourism model. ADR(€) - Athens ADR(€) - Thessaloniki 300 250 300 200 250 150 200 150 100 100 50 50 0 0 Thessaloniki 5-star Thessaloniki 3-star Athens 5-star Athens 4-star Athens 3-star Athens 2&1-star Thessaloniki 4-star Thessaloniki 2&1-star ADR(€) - Mykonos ADR(€) - Santorini 700 900 800 600 700 500 600 500 400 400 300 300 200 200 100 100 0 0 Athens 5-star Athens 4-star Athens 3-star Athens 2&1-star Athens 5-star Athens 4-star Athens 3-star Athens 2&1-star Source: trivago HPI - SETE Intelligence Revenues per available room year, 6.1% in Thessaloniki and a +31.6% increase, confirming (RevPar) for 2018 come as yet 10.1% in island resorts and similar the industry’s upward trend as another confirmation of the sector’s establishments that work mainly on well as the profit margins such an positive course.