Report: Investments in 5-star Hotels in Greece Double in a Decade

Photo source: W Costa Navarino

The number of investments in 5-star hotels in Greece has doubled in the last decade, according to the Greek Hospitality Market report released by the Greek branch of UK property advisors Savills.

Findings reveal that around 1,000 new 4- and 5-star hotels entered the Greek market between 2012 and 2022 adding some 73,000 rooms to the luxury segment.

“This trend is apparent in most regions of the country where there is a continuous increase in the number of luxurious hotels,” the report by Savills Hellas notes.

More specifically, in the decade under review, 400 new 5-star hotels opened their doors marking a 117 percent rise with 4-star units up by 45 percent to 560.

However, the total supply of hotel rooms in Greece increased by only 44,800, since approximately 37,000 rooms in the 1- and 2-star categories discontinued their operation. According to the report, the number of 1-star units in Greece dropped by 19 percent and 2-star units by 20 percent in the same decade.

Source: Greek Hospitality Market report, Savills Hellas Research

Performance: Greek hospitality ‘bounces back’ in 2022

In terms of hotel performance and turnover for the Greek hospitality sector in 2022, the report notes a good “bounce-back”.

In total, hotel turnover recorded a 2.4 percent increase from 2019 to 2022, due to the good performance of hotels with seasonal operation. “The significant decrease in turnover for hotels in continuous operation (-21 percent) can be attributed to the low rates they offer in the high-season due to the demand being reoriented to mostly resort destinations,” says Savills Hellas.

Source: Greek Hospitality Market report, Savills Hellas Research

Overall, turnover of upper category hotels presented significant growth compared to lower categories (+13 percent compared to -22 percent).

The report notes a similar pattern in the number of the respective hotels in operation: in 2022, 5-star units accounted for 43.5 percent of total hotel revenues or 3.75 billion euros, and 4-star hotels for 33.6 percent or 2.9 billion euros.

Source: Greek Hospitality Market report, Savills Hellas Research

Significant tourism investments in the last decade

The Greek Hospitality Market report informs that the rapid growth of the Greek tourism sector, the inclining international and local demand and the rising position of the country in the international tourist destinations lists have collectively led to significant investments related to the wider hospitality sector both from foreign and domestic capital.

According to the report, throughout the last decade, total hospitality investments have multiplied exponentially, going from 200-250 million euros per annum in 2013-2014, to their peak of 1.9 billion euros in 2019. Investments in Greece’s hotel industry in 2022 reached 1.74 billion euros up from to 1.5 billion euros in 2021.

Electra Metropolis, Athens. Photo Source: Electra Metropolis | © Christos Drazos

In terms of investments for refurbishment, renovation and maintenance purposes, in 2022 these accounted for 7 percent of turnover or 620 million euros, down from 15 percent or approximately 830 million euros in 2021. The report notes that 18 percent of total hotel investments in 2022 concerned sustainability actions.

At the same time, investments for upgrades and improvements were higher among 4-star units (30 percent) and 5-star hotels (35 percent).