Europe -  Athens, Greece

Athens is the commercial and financial centre of Greece, situated in Attica on the southern tip of the Greek mainland. Given its rich history, monuments and buildings, the city naturally attracts the leisure segment, but it also attracts a substantial corporate market, owing to its many governmental institutions. Athens has a somewhat broad seasonality whereby the strongest periods are spring and autumn, due to business- and conference-related demand. The summer months are less busy as people travel to the island destinations, and winter is a very low-demand period.

Greece’s political and economic situation is in recovery. Although ‘Grexit’ has been a possibility since the beginning of the crisis, talks about exiting the Eurozone have faded and the completion of the second EU programme review in June 2017 buoyed confidence, supporting activity. According to the OECD, GDP growth is projected to rise to 2.3% in 2018, and then moderate to 2.0% in 2019. Private consumption and investment will lead the recovery, responding to reduced policy uncertainty and gradually improving financial conditions. However, reforms are required to reduce Greece’s high public debt and banks’ large stock of non-performing loans, which are sources of financial vulnerabilities.

In line with the stabilisation of the economic situation, the Greek tourism industry seems to be on the way to a strong recovery. Athens has celebrated a come back in the past four years. Between 2014 and 2017, RevPAR grew at a compound annual growth rate of 6.0%, driven by both occupancy and rate increases, reaching pre-crisis levels. Visitation to the city has shown a very positive trend with airport passenger arrivals data showing a strong 17.0% growth in 2017 compared to 2016, fuelled by international arrivals (+21.0%), especially from the US and Asian markets. Athens comes third (4.0%), after Paris in first place with 18.0% and London in second with 5.0% in terms of the preferences of Chinese travellers planning their holidays for the next 12 months, an indication of the popularity of Greece in those new markets.

Athens was the fourth best European destination of 2017, according to the results of the eighth European Best Destinations (EBD) online competition. It was also included in the top 10 meeting and incentive destinations around the world in the 2017 Global Destination Index recently released by Global DMC Partners, the largest global network of independent destination management companies (DMCs).

The market is experiencing ongoing changes in supply, as some of the hotels that closed during the crisis in 2010/11 are now reopening and others are investing to modernise their product. The Astir Palace Vouliagmeni was purchased for €444 million (€875,000 per key) in October 2016. Situated on the Athens Riviera, the 303-room property will become the Four Seasons Astir Palace Hotel Athens and is expected to open mid-2018. The Metropolitan Hotel will undergo a US$15 million renovation, after which it will operate under the core Marriott brand with 366 rooms; it is expected to open in the second quarter of 2018. Nevertheless, barriers to entry remain extremely high in Athens and construction could potentially become very expensive given the large presence of old and protected structures.

While the transaction market dried up almost completely after the financial crisis, in addition to the transaction mentioned above, three other important sales have taken place in the market. In 2016, the Hilton Athens sold for a reported €142 million; in 2017, the 102-room King George Hotel was acquired for €43 million (or €422,000 per room) by Lampsa Hotels; and the Athens Ledra Hotel was purchased for €33 million (€105,000 per room) in June 2017 in a joint venture between Henderson Park and Hines. These deals show that opportunistic investors are increasingly interested in the market.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Athens RevPAR Change (€Euro)

Athens RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
sperret@hvs.com
  • +44 20 7878 7722 (w)
Simon Hulten
shulten@hvs.com
  • +44 020 7878-7775 (w)