In this episode of the IDEEA Podcast, the conversation revolves around Greece's recent economic developments and its potential as an investment destination. The participants are enthusiastic about the country's improved investment ratings, with both Fitch and S&P affirming Greece's BB plus rating with a positive outlook. This indicates significant progress in the nation's economic conditions and instills confidence among investors, suggesting that Greece is on the path to achieving an investment-grade rating in the near future.

However, there's a recognition of the challenge posed by high inflation rates in Greece. Greece has implemented various financial tools and incentives, such as the recovery and stability fund with a flat interest rate proportion, to counterbalance the effects of inflation on investments. This shows the government's commitment to ensuring a stable and favorable investment climate for both local and international investors.

Marinos acknowledges the need to promote Greece as an all-year-round destination to mitigate seasonality risks. The government's efforts to develop thematic tourism experiences, such as spa retreats and wellness getaways, aim to attract tourists beyond the traditional summer months, thereby diversifying the country's tourism revenue streams.

Lastly, the conversation briefly discusses the recent change in government in June. The new government is commended for its focus on modernization, digitalization of public services, and pursuit of fiscal targets. This vision, along with the stable economic trajectory, positions Greece as an attractive destination for long-term investors seeking growth opportunities and stability.

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Transcript

Marinos Franolic (00:00:28) - Hello once again and welcome to IDEEA podcast. Today I have a special guest. It's Mr. Marinos Giannopoulos from Enterprise Greece. This is just an introduction of what enterprise Greece does because they're also coming to the IDEEA Hospitality Investment Forum in Prague in September 18th to 20th, where we're going to be discussing further on how the investors and investments are happening in Greece and how the the enterprise Greece is supporting them. Marinos, it's a pleasure to have you here. Welcome.

Marinos Giannopoulos (00:01:04) - Thank you for having me. Thank you for the invitation. And I'm excited to come to Prague. It's probably excited for that, especially for being in a panel. And we're are happy to meet the investors and try to contribute, you know, our little bit of information to to that big thing that's called Greek hospitality.

Marinos Franolic (00:01:26) - But Marinos, it's really important to understand that you're not only supporting investments in hospitality, we're actually promoting and supporting investments in Greece in all industries and and also their investment plans. How much of the overall investment is focused on tourism, tourism and hospitality? How much has that changed through the last, let's say, 4 to 5 years?

Marinos Giannopoulos (00:01:52) - Yes. As we know, Enterprise Greece is the official investment and trade promotion agency of the Greek state. We operate under the auspices of the Ministry of Foreign Affairs. We are the gateway, if you like, for the opportunities that Greece has to offer. Our mission is to provide investors for a one stop shop for information consulting and any kind of assistance that they might acquire for any investment project. Of course, we also promote Greek products. We try to increase export sites, you know, any services in international markets. Basically we provide information for the Greek investment environment to the investors so they can appreciate all the amazing things that Greece has welfare both in services, products and, of course, in hospitality.

Marinos Giannopoulos (00:02:47) - Of course, that's the reason that hospitality tourism is one of the major focuses of Greece. Just to give you an idea, in 2018, it was 20% of the overall investments. Now in 2023, we're talking about 30%. That's increased by a lot. And it is in many reports. One I would like to mention is one from Deloitte that names Greece as one of the top ten investment destination hospitality in Europe. And one of the reasons that there are many amazing projects that are currently underway and the one I think lots of people are excited about is the 8 billion landmark redevelopment of the old Athens airport in Athens. It's a huge redevelopment with a real estate, with commercial residential, tower hotels, lots of things to go there. They're talking about the university. It's the largest urban redevelopment project in Europe right now, and I think completely from Athens into its destination, hopefully will become a world class destination.

Marinos Franolic (00:03:59) - Actually, we did a site tour after IDEEA in Athens last year and it's an amazing it's almost like a city within a city.

Marinos Franolic (00:04:09) - It looks beautiful, really. So how much you said in 2019, 20% of the investment was in tourism. Last year it was 30%. How much tourism contributes to overall Greece's GDP?

Marinos Giannopoulos (00:04:28) - And according to the latest data, in 22, the arrivals reached about to 27.8 million tourists, and the income from that was 17.6 billion. These figures are a bit lower than the 2019 top performance, but we're talking about we're getting really close. The average spend of that was about €620. This is a really good number. Now, the direct contribution to that was 24 billion. So we're talking about 30% of the Greek is tourism. So it's, as you can imagine, is a huge focus for us and takes in a good way a lot of our time. That's one of the reasons that we try and we actively try to be anywhere we can.

Marinos Giannopoulos (00:05:38) - But like IDEEA and all the other forms that were invited to try and speak for Greece to paint the picture, why Greece is in the decimation.

Marinos Franolic (00:05:47) - So 30% is directly contribution to the GDP. That's massive. On your official website, I found that you have a list of tourism subsectors like sun and beach, nautical, nautical tourism, city break and some others. What are the types of investments that investors are mostly looking for in tourism in Greece?

Marinos Giannopoulos (00:06:11) - You're quite right. There are several subsectors in tourism, but we are particularly interested and we will actively promote, of course, that the main ones in the sand and beach sector, it's the traditional one that tourists and investors like and the ones that they mainly go through. But over the last four years have been another price squeeze. We have tried to focus in different other areas, trying to touch, forming the product, if you like, a bit more. One of them is a nautical tourism and it's something that is attract attracting a large amount of cruise liners and kind of extending that to the market or the yachting at the same holidays.

Marinos Giannopoulos (00:06:57) - Now we have a city break tourism Athens with the Greek. And I don't know if you've seen that. It's becoming quite popular in Athens. It's a really busy city. And I'm sure you've been in Athens and you experienced that. Of course, we have the cultural and religious tourism that we're talking about, several historical religious monuments that already have been here. And another effort that trying to push, especially with the corporation, with the local government of Athens, is the meeting and incentives and the tourism that brings. So the position of Greece as a major meeting, a conference center with all the regional station and all the companies and one that is starting to take form is the sports tourism, because we're seeing some golf courses that are being developed or have been developments.

Marinos Giannopoulos (00:08:12) - We're looking at a high net of individuals that want to come over and experience that. And one last one is the integrated resource and the holiday housing. But there are new developments that. It's taking place, which gives an existing destination so we can upgrade the product. And also we're trying to change the destination so that the development of integrated resorts and resident permits within the non EU citizens will be able to invest in real estate in Greece. So we have a lot of different subsectors that we're actively looking and trying to promote.

Marinos Franolic (00:08:50) - Huge portfolio of subsectors. Yeah, but there's also one quite important thing regarding Greece. So the investment rating has increased recently. Fitch published B+ with Positive Outlook in January. Reconfirmed it in June. Now, S&P also announced B+ with positive outlook in April. So that obviously shows that Greece is really safe money for investors, a safe place for the investors money. But at the same time, inflation is really high. Since your background is finance, how do you expect inflation to affect the current situation? Do you think that the investors will keep their interest for Greece?

Marinos Giannopoulos (00:09:34) - You're quite right, Greece's investment rating has increased and we're expecting hopefully as soon as October to get towards the investment grade.

Marinos Giannopoulos (00:09:43) - I think that's an indication of how Greece has improved in economic conditions and it shows the investor confidence. The previous government had elections which reaffirmed the commitment from the people to the government that we're doing a good job. So I think that further improves the stability and the positive outlook of the next four years, which is something all the investors look, no one comes here with a timeline of 1 or 2 years. Whoever wants to invest somewhere, come with five, ten here at least down the line. Of course, inflation is a huge problem all over the world. The energy crisis and the war with Ukraine and Russia is something that hasn't helped and it's factors that we cannot possibly influence. But what we can influence is the environment and the incentives to provide investors to be able to afford greater investments in Greece, along with using any potential financial tool that's available from within Greece and with any EU funds. We've got the Recovery and Stability Fund that uses a flat interest rate for a portion of the investment, which kind of counterbalances any increase in inflation and prices that any building materials have to face down the line.

Marinos Giannopoulos (00:11:22) - It's not easy, but I think we, with the environment we're offering, I think is a good counter measure for for the inflation.

Marinos Franolic (00:11:32) - Now going back a little bit to tourism. What do you think that it's greatest, greatest advantage in tourism? Is it just the coast and the islands? Yeah, of course.

Marinos Giannopoulos (00:11:47) - No, of course. Greece. Greece. I believe this is a global brand. I mean, it's a destination that's been here from thousands of years. And of course, we've always been taking advantage of that. And the cultural heritage and the history, the natural beauty of Greece has to offer. But for me, it begins with something that. From the history because lots of students around the world are taught about Greece in the history books in elementary schools. And that's why it creates kind of not a myth. It's like the pyramids.

Marinos Giannopoulos (00:12:33) - You want maybe to go there. So we've got the path and all the numerous, numerous archaeological sites that exist here. So I think it's a combination of the history and what Greece has to offer in terms of the coastline. Talking about more than 60,000km of coastline, more than 6000 islands, Heritage sites. And of course, we're talking about the mid climate. It's for someone living in the northern part of Europe. Here in Greece can be guaranteed of the nice weather, especially in the summer season. Mediterranean cuisine, the diet that coincides with having a nice summer warm holiday when we're having a nice Greek salad with everything else that comes with it. Of course, that has a disadvantage that you have a seasonality when you're talking about the weather and that's why we're actively trying to promote and all year round destination for Greece because we do have ski resorts, we do have mountains, you have amazing gorges and other sites someone can visit within the mainland of Greece. But the question is to build that around, to build the product around the need because of course, you cannot go from five, to six months of summer holidays having a whole year-round destination.

Marinos Giannopoulos (00:13:53) - So we'll slowly try and add each side like from spring to autumn, another extra couple of weeks so we can have that kind of effect all year round. We're having thematic tourism like Spa, Spa or, you know, the natural like leaving in a kind of. Nice balance of life that you get with going for a weekend away, for a trek, for visiting a mountain, for going to a spa, for a relaxed kind of holiday, apart from just some holidays that Greece is known for.

Marinos Franolic (00:14:28) - But even today its over 40 degrees in Athens. So I'm sure that those pre-summer and post-summer months will have more tourists coming just because it gets really hot. I know this is usually happening in Greece, but if I understood. Well, it's just not it's not lasting so long, or at least it didn't before.

Marinos Giannopoulos (00:14:53) - I think personally, given the fact that the seasons are changing and we have to be mindful of how we treat the environment and try to reduce our footprint to any effect that we can.

Marinos Giannopoulos (00:15:07) - Uh, it kind of has changed the weather a bit, but I think it's moving towards later in the season, for example, May till June, which used to be kind of starting to be hot and then have the peak in July and August. I think now the peak is end of August and then continuing September, October. I think when I was speaking to some of the hoteliers last year, in the end of October, beginning of November, they had a occupancy of like something 85%, which is it's crazy in the sense that it's the summer. It's not the summer I can think of in October. But not everyone, as you said, like the 40 degrees, 25, 26, 27 during the day. I think it's more than enough for someone to have a swim and enjoy the nice weather. But I think that the trick is to try to expand out even further with different products and different offerings to all the tourists.

Marinos Franolic (00:16:01) - Now, I've asked what do you think about the advantages and what do you think about the disadvantages for Greek tourism.

Marinos Giannopoulos (00:16:13) - A really good question. I think that the disadvantage is that you need to increase and expand potentially. What I mean is, of course, as I mentioned, tourism is one of the number one focuses of Greece, but because of the money that you bring in. But at the same time, you don't you need not to be dependent just on tourism because as Covid happened. So you need to build around it. You need to build other products that go along with tourism and try to invest in other markets and sectors that are not tourism-dependent. But at the same time, I think one of the trick that we need to implement even more is having all these big investments that are coming to Greece right now, the big hotels or the big resorts and trying to build local communities that actually are apart from the jobs, are created for hospitality. You need all the products, the byproducts that they buy from around the world, like the food, the produce, the local tourism, go to other parts of that area.

Marinos Giannopoulos (00:17:24) - You need to kind of pick them together and create little hubs that can sustain themselves. And the other main thing is that because I talked about the city breaks, I think you need to try and keep the character of what you have, what you offer down the line, because you cannot just keep building hotels. The people will come, but in the end you're going to be just left with hotels. You need to keep have the character and keep what you're offering intact while keeping the environment impact as long as you can.

Marinos Franolic (00:17:58) - Because recently there was a there were elections in Greece and there's new government since June. Shall we expect any significant changes in relations to investments? What are the expectations?

Marinos Giannopoulos (00:18:14) - I think, as I mentioned before, it's it's a bet that this government has won it. It showed that the policies that the changes that they put forward actually work. The investors truly believe that the people that are the ones that actually vote believe that their place continues to be to modernize the Greek sector in the private sector.

Marinos Giannopoulos (00:18:36) - It's all about upgrading the country's justice system. And the big bet that they want is the distillation of the public services and the Greek government. Five years ago, it was unheard of in Greece to be able to do anything on your phone, on the website, the government website. Now, the more than 1500 services, everything has become digital. I mean, we have to go to any office anymore and it makes life for individuals and companies so much easier. The goal is what the Minister of the Digital Government says. We want to provide everything we can apart from marriage certificates and death certificates. So I think that that's a brilliant idea. First, the prime minister, Kyriakos Mitsotakis, has laid out the country's fiscal targets for the next four years. Has promised early repayment of any loans bilateral loans that we as Greece have to pay. Talking about repayment of that, which means that we can offer more products and bonds and other products for investors that can even make more money for the government itself.

Marinos Giannopoulos (00:19:55) - They have described having a vision. And I think that the five pillars that the government has put forward are. I completely agree with them. We're talking about a productive Greece, a social Greece, a digital green Greece, a just Greece, and a strong Greece. I think that encapsulates all the plan for the next four years that we tried to use our success story and move forward to the next term.

Marinos Franolic (00:20:26) - I think you gave a lot of food for thought to anyone who is interested in investing in Greece. It's already investing there. Also, for anyone who wants to join in Prague and maybe discuss with you the opportunities. Thank you so much for joining me today. It was a pleasure and I'm really looking forward to seeing you in a couple of months in Prague. Thank you.