The Olympic Games effect: 2003–2007
Before the financial crisis of 2008, Athens had a growing number of tourists. In 2003, the Athens International Airport saw 7.89 million international arrivals. By 2008, this figure had grown 34% to 10.58 million.
The 2004 Olympic Games was instrumental in increasing the attractiveness of Athens as a tourist destination – the city’s public transport system was significantly improved and its historical city was gentrified. The number of international tourist arrivals grew 8.4% in 2004, and record growth of 10.1% was registered in 2007.
According to the Hellenic Statistical Authority, Athens hotels saw 1.27 million stays among foreign tourists in 2003, but this number fell to 1.2 million the following year, when the Olympics was held. However, as the flow of tourists gradually increased, the number of hotel stays grew. Between 2003 and 2007, the number of hotel stays increased by 41%.
According to HVS Global Hospitality Services, the number of hotels in Athens fell from 458 to 454 between 2003 and 2007, while the number of five-star hotels grew from 19 to 28. This contributed to a 3% growth in the total number of beds, from 49,700 to 51,300.
According to a Deloitte study, the revenue per available room (RevPAR) in Athens grew from €73 to €96, or more than 30%, between 2003 and 2007. The average daily rate (ADR) increased from €126 to €142 during this period, and the occupancy rate grew from 57.7% to 67.3%.
A city in crisis: 2007–2013
The global financial crisis of 2008, coupled with Greece’s internal problems, prompted a nationwide social collapse. The protests that began in December 2008 adversely affected the standing of Athens as a tourist destination and aggravated the country’s economic problems. This resulted in more restrained activity among global and local buyers looking to invest residential and commercial property in Athens.
The number of tourist arrivals fell 22%, from 10.58 million to 8.24 million, between 2007 and 2013. However, according to a poll carried out by GBR Consulting among people who visited Athens between 2009 and 2013, more than 90% of the respondents said they wanted to visit again and would recommend the city to their friends.
It is noteworthy that such a dramatic fall in tourist arrivals did not affect the number of hotel stays more significantly – the number of hotel stays fell by only 14%, from 1.8 million to 1.55 million, during the same period.
The number of hotels fell from 454 to 422 during this period. According to HVS, although there was almost no change in number of hotels rated three-stars and above, but the number of one-star and two-star hotels fell from 283 to 232 (18%). As a result, their share of the market shrank from 62% to 56%.
The fall in tourist arrivals, alongside the country’s economic challenges, adversely affected hotel revenues. According to data provided by HVS, that the average yield per hotel room declined by 35.9 % between 2008 and 2013. According to rough estimates by HVS, the hotel occupancy rate dropped to 60% in 2013, while the average daily rate plunged to €80. President of the Athens-Attica Hotel Association, Alexandros Vasilikos, has estimated the total turnover of Athens hotels fell by 35% as a result of the crisis.
Market recovery: 2013–2016
In autumn 2013, the situation began to improve: protests subsided, and news about the Greek crisis in international media was gradually waning. Unemployment, which peaked at 27.8% in 2013, was also gradually declining. According to Elstat, in August 2017 the unemployment rate dropped to 20.6%. IMF has forecast the Greek economy to grow 1.8% in 2017.
The number of international tourist arrivals grew during this period. According to airport statistics, there was a 56% growth in tourist arrivals between 2013 and 2016, from 8.24 million to 12.87 million. In 2017, a new record high is expected, as there were already 12.48 million international arrivals by October.
The number of foreign tourists staying in hotels grew by 30%, from 1.55 million to 2.02 million, between 2013 and 2016. The total number of hotels, on the contrary, fell from 417 in 2013 to 404 in 2016. However, this drop has increased the quality of the supply – while in 2013, four-star and five-star hotels accounted for 18% and 6% of the market respectively, their share grew to 20% and 7% by 2016.
All this comes against the backdrop of new competition in the hospitality industry – home sharing, which has become an economical alternative to hotel stays. Today, Airbnb, the largest online platform for short-term housing rental, has more than 6.500 listings in Athens. The city was the fastest growing in terms of the number of listings on the portal in 2016 (+112%). According to AirDNA, a service that analyses data posted on Airbnb, there were 18,600 nights booked in Athens in September 2015, 42,800 in 2016, and 81,300 in 2017. The average daily rate on Airbnb ranges from €44 to €53. The occupancy rate, although a subject to seasonal fluctuations, is growing. Occupancy in September 2015 was 67%, 70% in 2016, and in 79% in 2017.