Hospitality Report - NAI Hellas AVENT SA · Hospitality Report 16selido 21x29_5.indd 1 04/01/2016 16:08. 2 ????? East Macedonia & Trace North Aegean South Aegean Crete Central Macedonia

HospitalityReport

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East Macedonia & Trace

North Aegean

South Aegean

Crete

Central Macedonia

West Macedonia

Ipiros

Ionian Islands

West Greece

West Greece

Peloponnese

Central Greece

Attica

Thessaly

• 12.2% of total hotel stock• 44,368 rooms• 41 5* hotels• 90 4* hotels




Prefecture Hotels (% of Stock) 5* Hotels 4* Hotels Rooms

(% of Stock) 5* Rooms 4* RoomsAverage Size in Number of Rooms

All Hotels 5* 4*East Macedonia & Thrace 383 (3.49) 10 27 10,884 (2.7) 954 1,865 28 95 69Central Macedonia 1,188 (12.23) 41 90 44,368 (11.0) 6,756 8,076 37 172 90West Macedonia 125 (1.28) 3 17 2,830 (0.7) 61 398 23 20 23Ipiros 393 (4.04) 9 75 8,054 (2.0) 711 1,334 20 74 17Ionian Islands 926 (9.54) 25 101 47,518 (11.7) 4,027 10,237 51 161 102Thessaly 570 (5.87) 28 106 14,737 (3.7) 1,316 2,878 26 47 27North Aegean 391 (4.02) 6 32 11,720 (2.9) 784 1,570 30 131 49West Greece 267 (2.75) 4 37 9,609 (2.4) 1,444 2,014 36 361 54Central Greece 531 (5.47) 10 37 15,064 (3.8) 666 2,611 28 67 71Attica 645 (6.64) 30 98 31,295 (7.8) 6,255 7,841 49 214 81Peloponnese 651 (6.70) 20 105 19,431 (4.8) 2,809 3,747 30 150 37South Aegean 2,087 (21.50) 121 353 100,220 (24.7) 17,390 34,206 48 156 98Crete 1,549 (15.95) 88 236 88,062 (21.8) 17,808 24,437 57 202 104Total 9,706 (100) 395 1,314 403,792 (100) 60,981 101,214 42 159 78Source: Hellenic Chamber of Hotels, edited by NAI Hellas

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3Industry Snapshot

The Greek tourism industry had an exceptional year in 2014 following a strong 2013 with international tourist arrivals increasing by 21% and travel receipts by 10%. In 2015, as a result of continuous political instability and imposed capital controls, it was believed that the upward trend of Greek tourism would be interrupted. The industry, however, proved resilient. According to the Deputy Minister of Tourism, 2015 is expected to be a record year with arrivals estimated at 26mil. tourists and travel receipts projected at €15.5bil.

The market for hotels remained hot in 2014 and 2015 as a result of the continuous growth in Greek tourism from 2013. New 5 and 4 star hotels have entered the market with new international operators establishing a presence and big players extending their positions. Marriott International returned to the Greek market with its Autograph Collection Hotels brand via the Domes of Elounda hotel in 2015. Four Seasons Hotels Resorts is planning to operate a new hotel in Mykonos; Carlson Rezidor Group will operate the Radisson Blu Beach Resort (ex Minos Imperial Luxury Beach Resort and Spa) in Lasithi, Crete from 2016; and Intercontinental has agreed to manage the operations of a new hotel in Santorini.

Grecotel Hotels and Resorts group aims to increase its position to 35 from 30 hotels and upgrade existing units. In 2015 two of the group’s luxury establishments in Rethymno, Crete, Caramel Grecotel Boutique Resort and White Palace Grecotel Luxury Resort reopened their doors. Earlier in 2014, Grecotel introduced the refurbished Pallas Athena Grecotel Boutique hotel in the centre of Athens which was added to the international network of small luxury hotels of the world.

East Macedonia & Trace

North Aegean

South Aegean

Crete

Central Macedonia

West Macedonia

Ipiros

Ionian Islands

West Greece

West Greece

Peloponnese

Central Greece

Attica

Thessaly





A trend is emerging in Athens with a number of new hotels expected to open in 2016. Electra Hotels and Resorts leased the ex Ministry of Education building on Mitropoleos street in Athens’ city centre and has begun the development of a 5 star hotel totalling 220 rooms. Further down on Mitropoleos street, the listed building that used to house the renown Hytiroglou store is set to be converted into a boutique hotel by one of the major local hotel groups. Mage Hotels and Resorts, leaseholder of the Fashion House Hotel in Omonia Square is to refurbish it into a 4 star hotel. Furthermore, a tender for the letting of the Athens Lycabettus that closed in June is underway. In the northern suburbs, Domotel Hotels and Resorts opened its new 5 star Domotel Kastri hotel, comprised of 86 rooms, in Nea Erythraia in October 2015.

The 5 and 4 star hotel market in Greece has and is continuing to attract increased interest from national and international investors. Investors are also waiting for how the banks will ultimately begin to treat hotel NPLs. Greek institutional banks hold a significant portfolio of prime hotels and according to the Bank of Greece the value of those NPLs at the moment stands at €2.5bil while an additional €3.0bil. are in 90 days delay. NAI Hellas estimates that the market value of 5 star hotels in Greece exceeds €10.0bil. while the market value of 4 star hotels is approximately €6.5bil.

The market values of hotel rooms in Greece are estimated to range between €35,000 to €65,000 for secondary 4 star hotels while prime 4 star hotel rooms range between €65,000 and €95,000. Market values of rooms of 5 star hotels are estimated to range from €100,000 to €160,000, depending on the location of the hotel. For the 5 star luxury category, market values of rooms are estimated to be far higher than that of the 5 star category, and range between €200,000 and €400,000.

The steady positive performance of Greek tourism increased turnover and EBITDA for the industry and has consequently allowed for new investments and the upgrading of existing stock.

Source: NAI Hellas

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4 Part 1: Recent Trends in Greek Tourism

In 2014 world tourism grew for the fifth consecutive year since the crisis with 4.3% more tourist arrivals globally than in 2013. The World Tourism Organisation expects a 3.0% to 4.0% year on year increase in 2015. European tourist arrivals, which are the world’s highest given that Europe is the most visited region globally, grew by 2.7% reaching over 581mil., with Southern and Mediterranean Europe leading the growth with a 6.9% increase from 2013. International tourism receipts increased by 3.7% in 2014 to €937.0bil. globally. Europe holds 40.9% of the world’s tourist market share of which EU-28 accounts for 33.9%.

Greek tourism had an exceptional year in 2014 following on from a very good 2013 season. International tourist arrivals increased by 20.7%, travel receipts grew by 10.2% and non-residents overnight stay improved by 14.7%. Greek airports welcomed almost 2.0mil. more visitors in 2014 than in 2013 and road arrivals increased by 49.0%.

In the first half of 2015 international arrivals increased by 18.8% compared to H1 2014 mainly as a result of a 51.3% increase in arrivals from EU member countries. In particular, arrivals from Germany increased by 23.5%, by 12.5% from France and by 18.0% from the United Kingdom. Arrivals from Russia decreased for this period by 60.6%.

In 2014, travel receipts grew by 10.2% compared to 2013, taking into account receipts from cruises that increased by 10.0%. In H1 2015 travel receipts increased by 9.5% to €2.65bil. compared to that of H1 2014 mainly as a result of an increase in receipts of EU member states’ citizens. Receipts from business trips increased in 2014 by 22.4%, yet are still very low compared to pre-crisis levels. The largest share of receipts, 84.3%, comes from holiday trips. Source: Bank of Greece, edited by NAI Hellas

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5Part 1: Recent Trends in Greek Tourism

Non-residents overnight stay in Greece increased in 2014 by 14.7% compared to 2013, totalling 186.9mil. stays. In H1 2015 overnight stays increased by 6.7% compared to H1 2014 mainly due to an increase in the number of stays from citizens of EU member states. Overnight stays of citizens from outside the EU fell by 14.0%.

Non-residents’ expenditure per journey decreased from €604.0 in 2013 to €552.0 in 2014 and by 10.0% in H1 2015 compared to H1 2014. In 2014 the average expenditure per journey in Europe as a whole stood at €660.0 while that of the Southeast was €700.0, hence leaving Greece far behind its region’s average. Expenditure per overnight stay in 2014 fell to €71.6 from €74.0 in 2013 but increased in H1 2015 by 12.8% from the same period last year. Average duration of stay decreased to 7.7 days in 2014 from 8.1 days in 2013 and by 10.2% in H1 2015 compared to H1 2014.

Source: Bank of Greece, edited by NAI Hellas

Year Expenditure per Journey

Expenditure per Overnight Stay

Average Duration per Stay (in days)

2008 730.00 € 76.30 € 9.62009 697.30 € 73.50 € 9.52010 640.40 € 68.60 € 9.32011 639.50 € 69.60 € 9.22012 616.20 € 73.30 € 8.42013 604.20 € 74.60 € 8.12014 551.80 € 71.60 € 7.7

H1 2015 528.30 € 74.00 € 6.8Source: Bank of Greece, edited by NAI HellasNote: H1 2015 expenditure amounts are not necessarily comparable to those of full years.

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6 Part 2: Seasonality of Greek Tourism

Greek tourism is affected by high seasonality levels. The Greek tourism seasonal deviation (the average of the absolute deviations of monthly data points form their mean) is 6.8, the second highest rate among EU-28 member states after Croatia, which is 8.9, and much higher than the EU-28 average of 3.4. Eurostat research reports that in 2014 82.6% of nights spent annually in accommodation establishments in Greece were during the months May to September, while for the same period for Spain nights spent resulted in 59.6%, 68.2% for Italy and 60.7% for Portugal. As such, the seasonality of Greek tourism is far higher than the rest of the EU Mediterranean countries. The 5 month summer period (May to September) in 2014 realised 80.6% of the year’s total international arrivals, 81.6% of total overnight stays and 83.4% of total travel receipts, highlighting the dominance of the Greek sun & beach product against other touristic products.

Seasonality is also reflected, of course, in the operation of the country’s hotels. About 50% of 5, 4 and 3 star hotels in Greece operate on a seasonal basis and can be characterised as ‘resort’ hotels while the other half operate all year round and are categorised as ‘city’ hotels. Lower star category hotels that operate seasonally are approximately 10% more than those of higher categories.

Source: Bank of Greece, edited by NAI Hellas Source: Eurostat, edited by NAI Hellas

Source: Hellenic Statistical Authority, edited by NAI Hellas

Source: Hellenic Chamber of Hotels, edited by NAI Hellas



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7Part 3: Competitiveness of Greek Tourism

According to the Travel and Tourism Competitiveness Report 2015 that is published every two years by the World Economic Forum that measures a destination’s tourism attractiveness, Greece ranked 31st (out of 141 countries) - marginally better than 32nd in 2013 - and 18th in Southern and Western Europe (out of 37 countries) from 22nd in 2013. Greece lags behind its main competitors who managed to improve their position considerably between 2013 and 2015, as they focused on emerging markets and on business travellers. Spain ranked 1st from 4th in 2013 and Italy moved to 8th place from 26th in 2013. Greece rates low in price competiveness and business environment but ranks high in the health and hygiene area (9th) and tourist service infrastructure (12th).

Based on tourism receipts, Greece had a global market share of 1.8% in 2014 and 3.8% in Europe. Between 2013 and 2014 Greece’s main competitor countries presented positive results in terms of arrivals and receipts but did not manage to outperform that of Greece. In 2014, Portugal increased receipts by 12%, whereas Greece reported an 11% increase, without taking into account income generated from cruises.

The direct and total contribution of Travel and Tourism to Greek GDP in 2014, as measured by the World Travel and Tourism Council, shows the importance of the sector to the economy, as outlined in the table below. Direct and total contribution of Greek tourism to GDP is forecasted to grow by 3.6% and 3.7%, respectively, each year until 2025. This means that the Greek tourism market is expected to experience strong future growth, yet less than that projected for direct competitors such as Turkey, Cyprus and Malta.

Source: UNWTO, edited by NAI Hellas

Country World RankingTTCI Index

European Ranking TTCI Index

2015 2013 2015 2013Spain 1 4 1 4France 2 7 2 6

Germany 3 2 3 2Switzerland 6 1 5 1

Italy 8 26 6 18Portugal 15 20 9 13Greece 31 32 18 22Croatia 33 35 19 23Cyprus 36 29 20 19

Country Enabling Environment Pillars, values (7=best)Business

EnvironmentSafety and

SecurityHealth and

HygieneHR and

Labour marketICT

Readiness*Spain 4.09 5.97 6.11 4.87 5.26France 4.52 5.44 6.52 4.96 5.55

Germany 5.32 6.06 6.85 5.18 5.51Switzerland 5.76 6.32 0.65 5.64 6.03

Italy 3.59 5.68 6.27 5.09 5.7Portugal 4.54 6.33 6.06 5.18 4.97Greece 4.04 5.49 6.57 4.75 4.71Croatia 3.65 6 6.33 4.41 5.03Cyprus 4.72 6 5.8 5.16 4.63

Source: The Travel & Tourism Competiveness Report 2015, World Economic Forum, edited by NAI Hellas * ICT Readiness measures the existence of modern hard infrastructure (mobile network coverage and quality of electronic supply) and the capacity of businesses and

individuals to use and provide online services.

Country Travel & Tourism Direct Contribution to GDP Travel & Tourism Total Contribution to GDP2014

% share2015

% growth2015-2025

% growth pa2014

% share2015

% growth2015-2025

% growth paSpain 5.6 3.3 2.3 15.2 4 2.1France 3.6 3 2.6 8.9 3 2.3Malta 14.7 4 3.8 28.1 2.7 3.4Italy 4.1 1.8 2.1 10.1 1.7 1.7

Portugal 6 3.1 2.5 15.7 2.2 1.9Greece 7 3.6 3.6 17.3 3.2 3.7Turkey 4.7 2.8 4.6 12 3 4.1Cyprus 7 5.6 4.1 21.3 5.5 4.2

Source: World Travel & Tourism Council, edited by NAI HellasNote: The % share amount relating to contribution to GDP may vary to other such estimates stated in the report due to each organisation’s methodology approach.

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8 Part 4: Importance of Greek Tourism

In 2014 the Greek tourism industry’s direct contribution to the country’s GDP totaled €16.6bil. or 9.3% of total GDP, as per Greek Tourism Confederation estimates. This amount includes income that is sourced from national tourism, air and sea transportation, estimated at €1.3bil., €1.2bil. and €151.0mil. respectively, as well as €466mil. from cruise tourism spending.

A significant multiplier effect is evident as a result of the tourism industry’s total impact on the overall economy. For every €1 spent from tourist activity, additional (indirect) economic activity is created. The Foundation for Economic and Industrial Research calculated this multiplier for tourism to be 2.2, hence every €1 spent creates an additional €1.2, thus adding €2.2 in total to GDP. The contribution of Greek tourism to the economy is thus significant both on a direct and total contribution basis.

Research conducted by the Centre of Planning and Economic Research resulted in a higher multiplier effect than that described above, with the multiple calculated to be 2.65. The tourism multiplier is broken down into subsectors of the economy.

Taking into account all additional economic benefits the tourism industry creates as result of the multiplier effect, it is estimated that the sector contributes in total between €37bil. and €44bil. or 20%-25% of GDP.

With tourism activity concentrated over several areas of the country, prime tourism locations such as Crete, the islands of the Southern Aegean and the Ionian Sea, see the industry contribute up to 50% to their GDP.

Contribution to employment in 2014, as per the Greek Insurance Fund for Employees, from the tourism industry increased by 23% compared to 2013. Total remuneration of employees in the tourism industry reached €3.8bil., €500mil. higher than the year prior. In July 2014 alone over 500,000 employees were registered in the industry, or 1 out of 3 workers in the registered labour force. As shown in the below graph, the turnover index for accommodation and food services for 2014 increased by 13.7%, showing a clear acceleration in the growth rate compared to the previous year (+ 4.8%). In the second quarter of 2015 the turnover index increased by 13.0% compared to the same quarter of 2014, evidencing the strength of the current year’s performance.

Source: Hellenic Statistical Authority, edited by NAI Hellas

Expenditure Category 2013 (€ in mil.) 2014 (€ in mil.)International tourism €11,707 €13,142 Cruise Expenditure €445 €466 Cruise Companies Expenditure €216 €191 Air-transportation €1,077 €1,177 Sea-transportation €148 €151 National tourism €1,195 €1,315 Investments €200 €200 Direct Contribution to GDP €14,989 €16,642 GDP €182,438 €179,081 Contribution as a % of GDP 8.20% 9.30%Source: SETE Intelligence, edited by NAI Hellas

SECTOR Accommodation Food Service Activities

Sea Transportation

Road Transportation

Air Transportation Retail Entertainment Travel

AgencyRent a Car Conferences WEIGHTED

AVERAGE% of Total Income 45.3 18.0 9.0 7.1 5.4 4.9 3.8 3.7 1.8 1.0

Multiplier 2.5 2.5 2.41 3.25 2.98 3.69 1.9 3.68 1.39 4.13 2.65Source: Centre of Planning and Economic Research, edited by NAI Hellas

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10 Part 5: Greek Hotel Product

The Greek hotel stock in H1 2015 amounted to a total of 9,706 hotels comprised of 403,792 rooms and 779,118 beds. Hotel capacity in Greece increased from 2000 by 23.5%.

The average size of Greek hotels in terms of rooms reached 41.6 rooms in 2014, an increase of 5.9% from 39.3 rooms in 2000. As such, although the percentage increase in hotel establishments for the period 2000-2014 was 23.5%, growth in number of rooms was 30.4%.

As presented in the following graph, approximately 60% of 5 star hotels in Greece have over 101 rooms while only 0.1% of 1 star hotels are of similar size. The largest percentage of 4 star hotels belong to the ‘Family’ and ‘Small’ hotel categories and merely 25% of them belong to the ‘Large’ hotel category. Between 2013 and 2014, the category breakdown for each type of hotel showed no significant changes except for a 7% increase in 5 star hotels of the ‘Family’ category. This means there has been an increase in supply of ‘Boutique Luxury’ units.




Considering the growth of hotel units in Greece according to their star category during the period 2000 - H1 2015, it is clear that the hotel stock of the country has been significantly upgraded. Five star hotels quadrupled, being the category with the highest growth. Four star hotels grew by 66% in the same period and account for 13% of the total stock (from 9.8% in 2000). Three star hotels increased by 62%, yet their share remained constant over the years. Contrastingly, the share of total stock of each of the two lowest categories fell since 2000. Two star hotels increased marginally by 3% between 2000 - H1 2015 while one star hotels decreased by 13%. In H1 2015, the top 3 star categories constituted approximately 60% of hotel stock.

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11Part 6: Greek Hotel Performance

Occupancy RateHotels overall in Greece suffered a difficult year in 2012 with falling occupancy rates. The growth of tourism in 2013 and 2014 helped occupancy rates increase, with 5 star resort hotels showing more resilience while occupancy rates of 4 star hotels were more volatile. In 2015 city hotels recorded high occupancy rates heightening investor interest.

Average Daily Rate (ADR)Average daily rates of resort hotels were much higher than that of city hotels, given that they operate on a seasonal basis and offer all inclusive packages. 5 star city hotels experienced less of a discount on ADRs between 2010-2015 than 4 star hotels since they went through a significant correction prior to 2010. 4 star city hotels presented low ADRs during 2013 aiming to maintain high occupancy rates.

RevPARThe difference in RevPAR results for 5 star resort and city hotels reflects the high occupancy apparent during the resort season compared to that of the whole year for the city hotels. The same relationship is not evident for the 4 star hotel category given that the resort and city occupancy rates show less of a discrepancy.

Investment Greek hotels fared remarkably well in 2014 and 2015 with resort hotels presenting stable growth in key performance indicators. However, the country’s leading performer for 2015 were the Athenian city hotels. Particularly, during the summer and autumn months of 2015 city hotels in Athens recorded remarkably high occupancy and ADRs. Athens is becoming a travel destination city and as such investment activity in the hotel sector in Athens is on the rise.

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Source: NAI Hellas

NAME LOCATION CATEGORY ROOMS OPERATOR STATUS

Grecotel Pallas Athena Athinas Str, Omonia, Athens 5 Star Boutique 63 Grecotel Hotels & Resorts Operating since 2014

AthensWas Hotel Dionysiou Aeropagitou Str, Athens Boutique Hotel 21 Anemi Hotels Operating since 2015

Ambrosia Hotel Sokratous Str, Omonia, Athens 4 Star Hotel 23 Swiss Hotel Project Operating since 2015

Emporikon Athens Hotel Eolou Str, Athens Boutique Hotel 14 The Athens new Story Operating since 2015

Domotel Kastri El. Venizelou Av, Nea Erythrea, Athens 5 Star Hotel 86 Domotel Hotels & Resorts Operating since 2015

N/A Patriarchou Ioakim Str, Kolonaki, Athens Boutique Hotel 36 Coco-Mat Hotels & Resorts Expected in 2016

N/A Mitropoleos Str, Syntagma, Athens 5 Star Hotel 220 Electra Hotels & Resorts Expected in 2016

Fashion House Hotel Piraeus Str, Omonia, Athens 4 Star Hotel 117 Mage Hotels & Resorts Expected in 2016

Current Investment Criteria for the Hotel & Leisure Market in Greece

Source: NAI Hellas*After Tax Internal Rate of Return

EBITDA multiplier ATIRR* Equity Multiplier5* / 4* Hotels 8.0x – 12.0x 15.0% - 19.0% 1.7x – 2.4x

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12 Part 7: Villa Rental Market in Greece

Villa & Holiday House Rental EnvironmentThe rapid growth of Airbnb, Homeaway and other online platforms that have infiltrated the travel accommodation market in Greece since 2010, have created a new player in the hospitality market. The growth of world travelers in combination with high hotel rates and demand to travel at low cost made these platforms very popular. Platforms such as Airbnb, with a market cap estimated at $24bil., are worth more than some of the world’s biggest hotel chains. The growth of this market in Greece is the result of a combination of global and domestic factors. The primary factor contributing to the growth of villa rentals is the increased global trend of travelling the world, with low accommodation costs, low flight costs and within an environment that allows the traveler to experience the life of a local. Globalization’s new trend is glocalization. Travellers are looking to experience the life of a Londoner, a Parisian, a Madridian and an Athenian through spending their holidays at a villa, a house or a flat in the heart of the city. Furthermore, the cost of staying at a 5 star hotel is higher than that of renting a villa or a house. Villa and house rental rates are considered to be a value for money choice for travelers in relation to star hotel room rates. In Greece, high property taxation and maintenance costs have pushed owners of holiday villas and homes to join the villa rental market as it is a very good way to produce income from the property. The outcome is that Airbnb and other house and villa rental platforms have gained a large market share in hospitality.

After the tourism boom of 2013, Greek villa and holiday house owners are looking more and more to include their villa in the short term seasonal summer rental market. The passing of Law 4179/2013 boosted the market’s repute by giving it an institutional framework that secures its sustainability. Based on the new legislation, Greek villa rental owners are obliged to register their villa with the Ministry of Tourism. As of 31/12/2014, approximately 6,500 villas were registered with the Ministry of Tourism.

Greek Villa Rental Market RatesThe Greek villa rental market is concentrated in some of the most popular Greek tourist destinations such as Mykonos, Santorini, Rhodes, Corfu, Paros, Crete and the islands of the Saronic Gulf. Rates for villas range from €28.83/person/day/room in Rhodes and reach up to €190.83/person/day/room in Santorini. All rates are net and exclude additional charges (15% - 30%) that travellers pay for management, villa brokerage services, travel brokerage etc. On the other hand, Greek hotel room rates (based on standard room rates and excluding high end accommodation) begin at €48.19 for a 5 star hotel in Rhodes and reach €233.75 for a 5 star hotel in Mykonos.

In order to conduct a comparative analysis of the Greek villa rental market several European villa rental markets were researched including St. Tropez (FR), Sicily (IT), Capri (IT), Bodrum (TR) and Ibiza (ES). The findings, together with their respective hotel market, are detailed below:

On average, Greek villas offer more competitive rates than that of similar destinations in Europe. Rhodes villa rental rates are the most inexpensive while rates in Mykonos, the country’s most expensive destination, are still lower than those of Capri and Ibiza. Similar to the villa rental market, Greek hotels in prime touristic destinations also continue to offer more competitive prices than hotels in top European destinations during the holiday season.

Source: Airbnb, Homeaway, Flipkey, Booking.com/villas, Luxury retreats, edited by LMG Villas.Note: Hotel rates are based on standard room rates and excludes high end accommodation.

VILLA RENTAL RATES HOTEL ROOM RATES

Location MIN Daily Rate/person/room

MAX Daily Rate/person/room

MIN Daily Rate/person/room

MAX Daily Rate/person/room

Greece Selected DestinationsSaronic Islands (Aegina, Spetses) €60.57 €71.66 €60.41 €103.27Mykonos €135.37 €219.80 €98.55 €233.75Santorini €106.29 €145.72 €124.32 €219.04Paros €74.61 €113.70 €69.13 €147.25Rhodes €32.33 €57.29 €48.19 €114.02Corfu €42.00 €107.93 €51.13 €154.94Crete €50.20 €76.44 €66.74 €156.91Greece - Average €71.62 €113.22 €74.07 €161.31

Europe Selected DestinationsSt. Tropez (FR) €106.70 €151.46 €173.12 €244.89Sicily (IT) €54.20 €67.60 €150.66 €313.13Capri (IT) €172.80 €238.50 €248.60 €534.20Bodrum (TR) €54.20 €66.33 €56.00 €122.10Ibiza (ES) €208.57 €270.22 €112.00 €200.32Europe - Average €119.29 €158.82 €148.08 €282.93

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13Part 7: Villa Rental Market in Greece

When comparing the relationships villa rates have to hotel rates in Greece and in Europe, an disimilarity is found to exist. Average rates for Greek rental villas are more similar to the country’s hotel rates compared to that in Europe, with the exception of Ibiza. European villas, hence, on average offer significantly lower rates compared to 5 star hotels. In addition, villa rates in Greece are more similar to hotel rates during off-peak season than they are during peak season, implying that hotels offer competitive pricing during low seasons in order to achieve higher occupancy rates and expand their tourist season. This causes villas to be priced out of the market, to an extent, during the off-peak months, whereas in European destinations villa rentals maintain their lower cost accommodation standing throughout the holiday season. This is a reasonable outcome given that hotels are managed by professional operators or experienced family teams who closely monitor the market, while villa owners are individuals with relatively limited knowledge of the market and its dynamics. Villa rental management companies are still relatively few compared to the size of the market and pricing strategies are continuously being adjusted to bridge the gap between market rates and owners’ expectations.

The villa rental market in Greece is relatively new and still quite immature. Rates for villas and holiday homes in Greece are still formed largely based on the owner’s perception of what his/her property is worth mainly because the market used to be relatively small. Hotel rates, of course, on the other hand are formed based on market dynamics of demand and supply.

Source: Airbnb, Homeaway, Flipkey, Booking.com/villas, Luxury retreats, edited by LMG Villas Note: Hotel rates are based on standard room rates and exclude high end accommodation.

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14 ????????????14

The 2014 OECD’s Competition Assessment Review of Greece recognises that the sun & beach product prevails in Greece and consequently creates a high seasonality effect. The OECD comments that ‘the country has unrealised potential in alternative forms of tourism that could be more evenly spread across the seasons and concentrated on other types of activities’. The review identified a number of restrictions in Greek legislation that hinder competition and effectively act as barriers to entry in Greece. Based on the outcome of this review, Laws 4254/2014, 4276/2014, 4272/2014 as well as the 216/2015 Decision of the Minister of Tourism came into effect in 2014 in order to abolish provisions harmful to competition and barriers to investment, while simplifying licencing and operational procedures of tourist enterprises.

The industry has already begun lengthening its season following the example of its Southern Mediterranean competitors.

The Greek tourism industry’s high growth potential is on course to be realised with numerous opportunities waiting to be unlocked through:• establishing additional touristic products (nautical

tourism, city break, medical tourism, cultural and religious tourism and conference tourism)• increasing its market share in emerging and long-

haul markets, and• maintaining stable legislative, planning and tax

frameworks

Investment Opportunities

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15Contacts

Thomas ZiogasMSc, MBA, MRICS, REVSenior [email protected]

Eleni MakriMSc, MRICSResearch [email protected]

Peter GoudesMphil, MRICSHead of Hospitality [email protected]

George SmalisMSc, MBA, MRICSPartner, Valuation & Consulting [email protected]

NAI Hellas is a leading firm of commercial property advisors in Greece, specialising in consulting, valuation & property management services. We are a member of NAI Global, the world’s largest network of independent commercial real estate providers.

To find out more please visit our website at www.nai-hellas.gr

Disclaimer All data contained in this report has been compiled by NAI Hellas/AVENT S.A. and is published for general information purposes only. While every effort has been made to ensure the accuracy of the data and other material contained in this report, NAI Hellas/AVENT S.A. does not accept any liability (whether in contract, tort or otherwise) to any person for any loss or damage suffered as a result of any errors or omissions. The information, opinions and forecasts set out in the report should not be relied upon to replace professional advice on specific matters, and no responsibility for loss occasioned to any person acting, or refraining from acting, as a result of any material in this publication can be accepted by NAI Hellas/AVENT S.A. © NAI Hellas/AVENT S.A. December 2015

Our Services• Certified Valuations of fixed assets• Property Agency (sales, purchase & leasing of all types of

commercial property)• Investment sales & advisory • Corporate Real Estate Services • Expert witness• Feasibility Studies• Development Appraisals• Property Management • Project Management & Fit out• Building Surveying• Landlord & Tenant Representation• Planning and land use advice• Market research• Public Private Partnerships PPP/Private Finance Initiative PFI)• Due Diligence• Asset Management & Restructuring• Financial Advisory Services• Hospitality Services

Our Hospitality Services• Certified Valuations• Sales• Investment• Benchmarking• Operations’ Permit Advisory• Business Plan• Market Study & Feasibility Analysis• Development Appraisal• Highest & Best Use• Due Diligence• Operator Search• Villa Rental Management

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NAI Hellas/AVENT S.A.4 Nikitara str. & Psaron str.152 32 HalandriAthens, Greecetel +30 210 6811760fax +30 210 6811722

www.nai-hellas.gr

Commercial Property Consultants, Valuers & Managers

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Documents

Hospitality Report - NAI Hellas AVENT SA · Hospitality Report 16selido 21x29_5.indd 1 04/01/2016 16:08. 2 ????? East Macedonia & Trace North Aegean South Aegean Crete Central Macedonia