Boston, MA -- (ReleaseWire) -- 01/08/2014 -- While Greek inbound travel is likely to increase throughout our forecast period to 2017, outbound travel, thanks to the struggling domestic economy, is likely to decline in year-on-year terms. The country does, however, present viable long-term investment opportunities, as development costs are relatively low in comparison to other countries within the eurozone.
The growth in inbound travel is dependent on a lasting improvement in the economic situation of major tourism source markets within the eurozone, in particular the UK and Germany. BMI is forecasting flat growth for the eurozone in 2013, with growth accelerating to 1.2% in 2014. Despite the economic limitations, inbound travel to Greece is likely to increase, as it is perceived as a more affordable holiday destination in comparison with other EU countries. As such, we expect inbound arrivals to reach over 19.1mn per year by 2017, up from 15.8mn arrivals in 2013.
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The increases in inbound travel will help to offset the overall decline we expect to see in outbound travel. We expect that the poor domestic economic situation is unlikely to show a substantial improvement in the next few years, and therefore outbound travel is expected to decrease from 3.7mn in 2013 to just 3.4mn in 2017, as fewer Greeks have disposable income to spend on travel. This may result in a slight increase in domestic travel within Greek borders, though it is likely to be insubstantial.
The Greek tourism industry benefits from the well developed transport infrastructure in the country, which saw extensive development when Greece hosted the 2004 summer Olympics. Greece is therefore well placed to take advantage of the expected increases in inbound travel without needing to make substantial investments in infrastructure.
The outlook for the hotel sector in Greece remains relatively positive, despite the poor domestic economic conditions, and we expect to see a few more hotels opened in the country by 2017, an expansion supported by the forecasted growth in arrivals.
- According to local reports, the National Bank of Greece is in the process of selling its 85.35% stake in Astir Palace Vouliagmenis. Astir's prime assets are the Luxury Collection Arion Resort and Spa (123 rooms and 58 bungalows), as well as the Westin Athens (162 rooms). Both of these hotels are currently managed by Starwood Hotels & Resorts.
- Top global hotel brands continue to invest in the Greek market, with Starwood Hotels & Resorts set to open the W Athens Astir Palace Beach, a luxury property in Athens, in 2016. Other chains are also expanding into the market, with Spanish hotel chain Barcelo Hotels & Resorts entering into a management contract to operate the five-star Hydra Beach resort near Ermioni in early 2013.
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