Pricing: Steady at the Τop
There has been a lack of transaction activity over the last year and therefore a lack of clear pricing benchmarks. However, most hotel investors have not changed their investment strategy and the weight of capital chasing good quality assets is limiting price discounts - an investor looking to buy a hotel asset now to reposition it, is not looking at this season, and probably not next season either. Year one of the operational business plan will be 2023 i.e. assuming “normal” market conditions. Looking forward, smaller, and more secondary quality hotels, which comprise a majority of the collaterals in NPL portfolios, are however likely to face downward pricing pressure, particularly as more assets come to auction.
Changing Landscape: Professional Investors and International Brands
Overall, a large transfer and consolidation in ownership of hotel assets is anticipated in the coming years, a process which started about 3 years ago. Many assets will pass from e.g. family businesses or businesses whose core activity is not hotels, to professional investors and managers with access to capital. In turn, this will drive a further repositioning and upgrading of many assets on the one hand, and also the influx of international brands on the other (current brand penetration rates in Greece are relatively low, but rising rapidly). The diversity of the hotel landscape is also changing rapidly, with new formats being rolled-out to cater for changing guest needs, including themes such as adults-only, wellness, and eco-friendly. We are also witnessing an increase in the development pipeline of integrated resorts, combining branded residences. The hospitality product in Greece will undoubtedly step up to a new level in the coming years.