The new study of PwC Greece “Hospitality Invetsment Strategies in Greece” provides an in depth analysis of the hospitality industry and suggests three strategies for development.
Greece is a significant global tourist destination and its direct contribution to the country’s GDP exceeds 7%. The hospitality industry has been growing fast and systematically in the last three years, but it is not particularly internationally competitive, mainly due to price.
The conditions in Middle East, Turkey and North Africa and the improving, relative to them, competitiveness of Greek hospitality, are supporting the continuing growth hypothesis. Growth in tourist arrivals could be only halted by a global or European recession or major political events in Greece.
There are three strategies and a doubtful strategy for hospitality investments:
- Add capacity at main destinations through unutilised building permits
- Upgrade hotels to the next class
- Develop lesser destinations through acquisition of many hotels at one of them
Zombie hotel acquisition is a doubtful strategy with only few exceptions
The most promising strategy in terms of value potential appears to be lesser destination development followed by capacity enhancement, with hotel upgrading at the bottom.
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