A new survey taken by real estate agents, investors, developers and industry experts in the Mediterranean region reveals important information about the international investing in Mediterranean resort and hotel real estate market.
Tranio and The Mediterranean Resort & Hotel Real Estate Forum (MR&H) made the joint survey in 2018. More than half of the respondents surveyed by MR&H (57%) believe that resort and hotel real estate is the most popular, or one of the most popular, categories of investment properties in the Mediterranean region. At the same time, only 34% of Tranio’s respondents share this opinion, and about half of the respondents indicate that interest in resort and hotel real estate is at an average level versus other types of income property. In both cases, only a small proportion of those surveyed consider this category unpopular.
The factors which make a country popular among investors are a stable economy and low bank charges (Spain, Italy, France), the residence permit for investment programmes (Spain, Portugal, Cyprus), and a growing market with high yield prospects (Greece).
According to some respondents, investor interest in Spain temporarily stopped increasing after real estate prices hit rock bottom and bank charges began to rise.
And if we take Greece’s case, one of the respondents noted that “investors in Greece are buying up distressed assets for redevelopment or conversion, but shy away from any greenfields. The investment environment is complicated by protracted judicial procedures. Nevertheless, if the whole bureaucratic climate improves, so will investment.”
As to the locations popular among investors in Greece, 55% of the respondents named the Cyclades Islands, namely Tyrа (Santorini), Mykonos and Paros. Many also consider Athens (36%) and Crete (27%) promising, while some respondents mention Rhodes and Halkidiki.
In Spain, 39% of the respondents believe that the Costa del Sol and other locations on the Andalusian coastline (Malaga, Marbella, Benalmadena, Torremolinos, Fuengirola) are particularly attractive. Barcelona is preferred by 22% of those surveyed, and the Balearic Islands (primarily Ibiza) and Costa Brava are among the other locations mentioned.
Finally, Rome, Milan and Puglia were each named by 18% of the respondents as preferred destinations.
The most popular types of resort and hotel real estate are 3/4-star hotels and resorts. Hotels top the list of Tranio respondents (33% of the votes), while resorts lead the MR&H rating (38% of the respondents’ votes).
One of the respondents said that “the concept of vacations has completely changed over the last few years. Tourists are searching for new destinations in the Mediterranean peninsula, looking for a more authentic and “local” experience. So, traditional “big” hotels are facing a challenge whereas the new type of hotels like serviced apartments, which offer a more authentic experience most of the time, are gaining ground. It is worth mentioning that a number of traditional hotels have changed into serviced apartments.”
Sometimes an investment can become unprofitable, and 72% of the respondents believe that the main reason behind the failure is the ineffective management of the investment asset. Other answers lag way behind.
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