The five star hotel map in Athens is fast changing, thanks to the country's ongoing tourism boom. A number of new hotels are expected to open for business in 2019 as investors plough money into the sector in a bid to tap growth in tourism. But doubts have started to emerge, among some experts, over an oversupply of accomodation in the Greek capital.
One of the luxury hotels scheduled to open next year is the King's Palace hotel on Panepistimiou street, that has been leased to Lampsa Hotels. Lampsa, which also owns the King George and Grande Bretagne hotels at Syntagma square, is making a major move by taking on the King's Palace, an investment of some 20 million euros. According to company officials, the King's Palace will be open in May, but will be fully operational in 2020.
Athens is one of the areas of Greece most benefitting from the strong rise in tourism numbers. Previously a city that most tourists skipped on their way to a Greek island, Athens has emerged from the country's economic crisis as a popular destination, showing growth in foreign visitors of 600 percent since 2013.
As a result, investors have been snapping up cheap hotels that had been boarded up due to the economic downturn. Apart from the larger luxury operations, many smaller boutique hotels are also popping up around Athens. This trend is expected to result in investments of more than 700 million euros of new hotels (four and five star) in Athens over the next three years, according to a report from Pepper Hellas.
But there are signs that the boom in Greece's tourism industry could be slowing. Lampsa officials said that visitor growth rates in Rhodes, one of the country key island destinations, has been dropping off since August. Next door in Turkey, one of Greece's main competitors in hospitality, tourism numbers are seen doubling in coming years.
Another factor raising concerns about an over supply of accomodation in Athens is the fast growing short term property rental market in Greece. Many of the homes put on platforms, such as Airbnb, have been spruced up and rival the level of accomodation offered by hotels at the higher end of the market.
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