Greece’s tourism sector optimistic about 2018 summer season

14 May 2018

Greece’s tourism sector will continue to grow in 2018, with hoteliers optimistic about this year’s season. The positive outlook has been forecasted in a recent survey by GBR Consulting which looks at the years expectations for both occupancy and average room rates. Amid the good news, a wave of new hotels are being built throughout the country.

International tourist arrivals are up in Greece and are predicted to continue rising throughout 2018 to reach record heights in 2020. After the best season ever which saw 350,000 tourist arrivals in July last year, this summer those figures are set to climb further. Some experts believe that by 2020 the number of tourist arrivals could be as high as 460,000 according to econometric models.

This is in line with a rise in tourism rates all over Europe which are also at a record high. City hot-spots and resorts all over the continent are flourishing with Europe remaining the globe’s premier travel hot-spot. Leading the pack are Amsterdam, Lisbon, Porto and Prague which are enjoying the strongest growth, according to a recent report by PwC.

To deal with an influx of tourists, there are a host of new hotels being constructed around the country. The sector is attracting a sustained level of investment both in Athens and Thessaloniki as well as in regional areas. Due to such sustained investments in anticipation of increasing tourism numbers, a number of major investment projects are close to being completed in time for summer. 

For the two major cities in Greece, the next few years will bring openings of a range of new 5-star luxury hotels as well as numerous boutiques and serviced apartments. In Athens for example, The Yazbeck Group have renovated a property on the intersection of Académia and Omirour Streets to turn it into the 5 star Academia of Athens. In Thesalonikki, The Olympion City Hotel, a 5-star, 8-storey property with 27 rooms will open in late 2019.

Greece’s tourism sector optimistic about 2018 season

Even amid a wave of increasing competition, city hoteliers believe that their room rates would increase over the season. Of the respondents, 53% expect that their average room rate would rise by 2% to 5%. A further 28% of respondents are even more optimistic and believe that their room rates would rise by upwards of 5% this season. Hoteliers are not only optimistic about their own hotels, but also about the market in general, with roughly 60% of respondents expecting 2018 to bring increases of over 2%. 

George Spyropoulos, a renowned hotelier from Athens commented on the industry; “Athens tourism is currently booming. This is evident in the occupancy rates of all hotels in Athens - in the increase of arrivals at the Athens Airport and in the fact that all the more new nationalities visit the Greek capital. Also, Athens’ seasonality has expanded especially in the summer months.” 

Greek Resorts

Resort hoteliers are eyeing an excellent 2018 as well, expecting significant improvements in both occupancy levels and room rates. Overall, about half of the resort sector is expecting growth rates of between 2–5% for for their hotels. The majority of respondents stated that 2018 will be a strong year for the market in general, with 25% of hoteliers expecting upwards of 5% occupancy increases. 

The majority of new hotel 5-star rooms built between 2010 and 2018 are located in the Dodecanese archipelago, which is situated south of Turkey and include the islands Cos and Rhodes. The Cyclades islands are expecting the biggest growth in luxury apartments and units but this sector is still comparatively small in size compared to hotel rooms. 

The survey results have been taken from the GBR Consulting Barometer. The Barometer is a regular survey which obtains insights about the Greek hotel industry's optimism about the season to come. GBR Consulting is a hospitality and tourism management consulting firm which has been active since the early 1990s. The group also publishes reports and studies to support the Greek tourism industry on market trends.

Turning economic tide requires reassessment of strategic priorities

16 April 2019

Risks of a downturn in Europe continue on the horizon as various risks to (global) growth come together. A new survey of operations managers in Europe shows that around half expect a downturn somewhere in 2019, although few expect a recession. Leaders in financial services are the most pessimistic, while automotive respondents are the most likely to expect a downturn.

The financial crisis, born from a chain of activities on the back of risky lending by banks combined with poor risk governance as well as an inflated real estate market in the US, nearly collapsed the global economy. The decade that followed saw recovery, with recent years seeing sustained economic growth in Europe, booming equities and positive sentiment among companies and investors.

However, stability may be giving way to uncertainty in Europe. Global headwinds from a trade spat between the US and China, fallout from Brexit, as well as the rise of populism – particularly in Italy, Austria and the Netherlands – means that the tide is turning. Changes to monitory policy are also on the cards, with interest rates expected to rise in Europe and in the US. Meanwhile, the Chinese economy is projected to slow, while growth of other fast growing emerging market economies is stagnating.

Economic expectations - Overview

A new report by Roland Berger, titled ‘Operations Efficiency Radar’, highlights the changing sentiment among European business leaders. According to the study, the number of respondents expecting a downturn this year stands at 48%, up from 17% last year. Few, 2%, however expect a recession, comparable to the view last year.

The sentiment comes on the back of worsening key economic indicators, the researchers note. The number of restructuring cases has increased, global stocks fell 10% over 2018, and there are an increasing number of profit warnings across industries. Market volatility is also up, while business confidence and expectations have trended down over 2018. Profit warnings by companies have gone up, in particular in Europe’s largest economy Germany, and further interest rate hikes are looming around the corner.

Different industries have considerably different expectations. The most pessimistic industry is financial services – 11% of its professionals expect a recession this year and 33% a downturn. The automotive industry meanwhile has the highest number of leaders expecting a downturn, at 92%, followed by industrial products, at 56%. The most optimistic industry is chemicals/pharma, with 36% expecting a boom, followed by consumer goods and retail at 33%.

Economic expectations by industry

The changing market conditions are prompting leaders to change some of their strategic planning and priorities going forward. The automotive industry operations leaders are set to focus on production (79%), working capital management (79%), and product portfolios (77%). Aerospace and defence firms are set to focus largely on production (73%) and controlling & finance (66%), followed by procurement (64%) and product portfolios (61%). Industrial products companies are set to focus their operation priorities on product portfolio (75%), production (69%), and procurement (63%).

For four other industries studied – chemicals & pharma, consumer goods & retail, industrial services and financial services – product portfolio, which includes rationalising, optimising and innovating products, is the top strategic priority.

Commenting on the findings, the authors state, “The first consequences of the fragile environment are already visible in a number of indicators. Company leaders should use the results to challenge priorities throughout 2019, review their early warning systems, fine-tune and/or re-assess budgets and investments and consider crisis preparation scenario’s.”

Related: 13 business and technology trends for 2019.