Rising costs, lack of skilled labor, high staff costs and rising interest rates are the major risks threatening the growth of the Tourism and Hospitality industry. This is confirmed by Deloitte’s “European Hotel Industry Survey 2022” which records the trends of the Tourism and Hospitality industry that are evident in Europe for 2023. More than 100 representatives of the hotel industry participated in the survey, including hotel business owners, operators, developers and investors.
As a consequence of the challenges faced by the main tourism players, they are now turning towards a more defensive and conservative policy, focusing on improving performance and managing their cash flows.
Additionally, 85% of respondents cite “managing inflationary pressures” as the number one priority on their agenda, while recruiting the right staff and reskilling/upskilling the industry is a serious concern for 63% of respondents.
At the same time, the economic recession, the inability to adjust prices upwards despite strong inflationary pressures, the effects of climate change as well as the lack of compliance with the sustainable development agenda and strategy put at risk the prosperity of the sector in the next period ( 1-3 years).
Hotel investments – Top 10 cities
As far as hotel investments are concerned, a Top 10 European cities that are attractive destinations for hotel investments are being formed. Athens ranks 9th among the ten most attractive cities for hotel investment while Amsterdam remains in 1st place as the most attractive European city for hotel investment in 2023, with Lisbon moving to second place and London falling to third place .
Regarding the investment categories, it seems that hotels are a more attractive investment opportunity compared to serviced apartments. As sources of financing for these investments, 27% of respondents estimate that private equity will remain the main source of equity capital for hotel acquisitions in Europe in 2023.
On the other hand, alternative lenders are the most common source of debt financing in the European hotel market for 2023, while all other sources have lost momentum compared to a year ago, with the exception of traditional debt financing and sovereign wealth funds.
In addition, around two-thirds of respondents (62%) expect investment interest in the European hotel industry to come mainly from Europe, less so from the UK, while increased investment interest is currently emerging from North America, Middle East and North Africa compared to 2021.
Finally, in terms of the European outlook and investment cycle, it is estimated that the United Kingdom (37%), Germany (29%) and Ireland (28%) are on the decline as hotel investment destinations, while Greece (31%) Spain (33%) and Portugal (33%) on the rise.
Vassilis Kafatos, Partner, Clients & Industries Leader and Tourism & Hospitality Sector Leader at Deloitte said the following about the research, but also about Greek tourism: “There is strong foreign investment interest in the Greek tourism sector, both from large funds as well as from established hotel chains. More specifically, the greatest interest is shown in the creation and/or reconstruction of luxury resorts and high-end boutique city hotels both in established tourist destinations and in emerging ones that show significant growth prospects.
Latest News
Greek Property Renovation Surge amid Economic Constraints
This has led to a notable escalation in renovation costs, with average prices per square meter exceeding previous norms and reaching even 1,000 euros in premium locations
RRF: Additional €5.1bln Funds for Subsidies to Greece in 2025
By April 22, funds totaling 5.75 billion euros had been transferred for approved projects of the Recovery Fund to entities within and outside the general government and final recipients
OECD: Greek Economy Resilient with 2% Growth Forecast for 2024
However, the OECD highlights challenges including the need to enhance productivity and fiscal adjustment due to high debt levels.
Challenges and Delays in Greece’s Hydrocarbon Exploration
Sources disclose that the petroleum companies holding the concessions are seeking partners to jointly invest and share the costs of exploration and drilling.
Greek Beach Visitors Can Report Violations on New ‘MyCoast’ App
Greek authorities hope the newly-launched, free ‘MyCoast’ app will help clamp down on public beach violations
BoG Figures Confirm Banner Year for Greek Tourism in 2023
20.6 billion euros in related revenues topped the previous year’s figure by 16.5%
Piraeus Bank to Propose First Dividend in 16 Years
Piraeus Bank has forecast profits of roughly 900 million euros this year, rising to one billion euros next year
Eurostat: Inflation in Greece Eases to 3.2% in April; 2.4% in Eurozone
The rate of increase for food prices was up by 4.9% in April 2024, compared to 4.8% in the previous month
ELSTAT Feb. Retail Turnover Drops by 3.8%, Sales Volume Plummets by 9.8%
Additionally, the seasonally adjusted General Volume Index for Feb. 2024 experienced a 3.8% decrease compared to the previous month of the same year
Greek Buyers Lead Return to Vacation Home Market
In the last six months, Greeks have made a surge into the vacation home market, notably without relying on loans