Investing in the hotel business in Greece: is it profitable to invest today?

Investing in real estate in Greece: attractive prospects

Investments in real estate in Greece are becoming increasingly popular, attracting the attention of both local and foreign investors. Currently, the country is experiencing a period of investment growth, which has become particularly noticeable as investment volumes increased by over 70% in the first seven months of 2017. This interest from investors can be attributed to the low property prices, which remain among the most advantageous in Europe, as well as signs of stability in the market with favorable forecasts for the future.

By the end of 2017, the situation with prices began to change: the decline in prices slowed down, and their fluctuations became insignificant. In contrast, the returns on investments showed a positive trend and generally exceeded the average European values by 3-5%.

Attractive factors of the investment climate

The investment climate in Greece is quite attractive due to a combination of factors. First and foremost, the country's appeal as a tourist destination should be noted.

• Despite the economic difficulties of recent years, Greece continues to be one of the most popular destinations for tourists, welcoming millions of travelers from all over the world each year.
• According to official data from the Ministry of Tourism, over 27.5 million tourists visited the country in 2017, and each of them requires a comfortable hotel or other accommodation for a full-fledged vacation, which creates a stable demand for real estate.

Legislative initiatives for investors

Secondly, Greece's legislative initiatives also contribute to attracting investors. Since 2014, a law regarding a single property tax has been in effect, which significantly reduces tax obligations for properties valued up to 200,000 euros.

In addition, the ESPA program offers owners the opportunity to receive grants for the construction or renovation of real estate, which can amount to up to 60% of the total investment volume.

Low real estate prices

Another significant factor is the relatively low real estate prices in Greece compared to other European Union countries. Although the economic crisis had a serious impact on the real estate market, it is slowly starting to recover, and the drop in prices has opened up opportunities for foreign investors who have actively begun to acquire properties at affordable prices.

• In 2017, according to information from Enterprise Greece, 2,167 private investors decided to invest in Greek real estate.
• 65% of the completed transactions were related to commercial real estate, while the remaining 35% were for residential properties and apartments in resort areas.

Large international companies in the market

Large international corporations, such as those actively operating in the Greek market, are also present.Black Rockfrom the United States,Fosun GroupandCosco Investmentfrom Asia,Eagl Hillsfrom the United Arab Emirates and many others. These major market players provide additional confidence to local buyers and the investment climate as a whole.

Investments in the hotel business

Investing in the hotel business is also a promising direction. Investments in this segment of real estate typically provide stable income and a high level of profitability.

Considering all the factors mentioned above, Greece appears to be the most attractive option for those looking to invest in real estate, opening up opportunities for both short-term and long-term investments. Thus, the current state of the real estate market in Greece stands out among other European countries, offering favorable conditions for profitable investments.

Ways to generate income from real estate in Greece

Property owners in Greece have numerous ways to generate income. One of the most common methods is long-term rental, which applies to both residential properties and commercial retail spaces.

In recent years, the process of reselling old buildings in the central areas of major cities, such as Athens and Thessaloniki, has become particularly popular, also yielding good profits. However, the greatest interest among investors is generated by offers for short-term rentals, including the leasing of apartments and villas located in tourist regions.

Hotels and serviced apartments

It is also worth noting the potential of the hotel business and serviced apartments located in resort areas and on picturesque Greek islands, where the high season lasts from six to nine months a year. Urban hotels in major cities like Athens and Thessaloniki are equally important.

Investments in the hotel sector are becoming an attractive example of profitable investments in the Greek market. The steady growth in the number of tourists, which began in 2011, contributes to stable returns in both resort and urban real estate over a long period of time.

Changes in hotel room rental prices provide owners with the opportunity to achieve significant profits just six months after acquiring the property.

Increase in tourist flow

According to data from the Ministry of Tourism, Greece welcomed a record 27.5 million tourists in 2017. It is projected that by 2021, the number of arrivals will exceed 31 million, creating excellent conditions for real estate resale.

Over the years, the owner can carry out quality renovations, build a loyal customer base, and then put the hotel up for sale at a price significantly higher than the initial investment. Such cases are not uncommon.

Disadvantages of the hotel business

Nevertheless, like any business, this sector has its drawbacks. Managing a hotel requires significant professional skills and knowledge, which can be a real challenge for the owner.

To address such issues, it is wise to seek the assistance of professional management companies. One of the major players in the hotel market in Greece is a hotel chain.Bomo ClubThis company is part of a group.Mouzenidisoffers its clients club hotels and hotel complexes of 3-4 star category, known for their high quality of services provided.

This allows hotel owners to hand over the management of their property to professionals without worrying about day-to-day operations, while still enjoying a steady income. Additionally, they will gain experience in managing hotel real estate under a well-known brand in the Greek market.

An example of investment in the hotel business

Let's consider a specific investment example: a hotel with one hundred rooms located in a popular resort area of Sithonia in Halkidiki. The property is conveniently situated near the airport and on the beachfront.

The hotel offers all the necessary amenities, including:

• restaurant
• bar
• swimming pool
• tennis court

The price tag for such a hotel is 5 million euros, and the expected profitability of the business is around 6% per year, which translates to about 300 thousand euros annually. This highlights the significant potential for investment growth in Greece's hospitality sector.

Hotel and investment opportunities

The hotel is fully ready for operation and can start generating profit immediately after the ownership transfer process is completed. There are proposals for management transfer for a period of five to ten years, and after this period, a profitable sale is possible.

In addition to this, the new owner can independently develop the hotel business using the existing brand and customer base.

Investing in real estate in Greece: Attractive opportunities

Investing in square meters in Greece presents a unique opportunity for investors looking to preserve and grow their financial resources. Witnessing the revival of this beautiful region, I cannot help but note the steady increase in interest in real estate, which is clearly supported by statistical data.

Reasons for investment

Greece attracts foreign investors with its relatively low housing and commercial real estate prices compared to other European countries. Over time, property prices begin to stabilize, while rental yields and resale returns remain high. Undoubtedly, 2017 was a turning point for investments in Greek real estate, with investments increasing by more than 70%. This indicates that Greece, despite its past economic difficulties, is opening new horizons for future investors.

Key factors of attractiveness

• The resort appeal of the country:Greece welcomes millions of tourists every year, creating a high demand for residential real estate.
• Favorable legislative climate:The country's legislation supports foreign investors and provides tax incentives.
• Stable growth in the number of tourists:The increase in the number of tourists raises rental prices for properties.

Investments in the hotel business

Of course, investing in guest houses and apart-hotels is becoming one of the most attractive directions. The increase in the number of tourists from 27.5 million in 2017 to an expected 31 million by 2021 guarantees high profitability for such investments. Success in this business sector is made possible by the right approach to property management. I always recommend turning to professional management companies that can assist not only with operational management but also with their expertise in this field.

Conclusion

Thus, I see that investments in Greek real estate are becoming increasingly profitable and promising. In just a few years, one can not only recoup the invested funds but also make a profit, thanks to the dynamic development of the tourism consortium and the growing interest in resort areas. Therefore, if you are looking for a new investment opportunity, Greece definitely deserves your attention.