HVS Market Report – Santorini, Greece


Picture of Oia - Source HVS
  HVS Marketplace Record – Santorini, Greece

This newsletter supplies an summary of Santorini, probably the most visited locations in Greece, at the side of the newest tourism and hospitality information from across the island.

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If there may be one vacation spot inside Greece that lives as much as its reputation as probably the most alluring locations on this planet this is Santorini. Visiting the island with the dramatic landscapes and distinctive terrain, a part of the legacy of a violent volcanic eruption that came about in the second one millennium BC, is at the bucket checklist of each savvy traveler. 1000’s of holiday makers that discuss with Greece flock to the island of Santorini to recognize the caldera-perched villages, the unique native structure with its cave homes dug into the volcanic rocks, the fascinating sunsets, and the cultural antiquities buried and preserved below the volcanic ash that buried the island. On the identical time, via distinctive feature of its cosmopolitan reputation, Santorini boasts one of the most most opulent lodging choices around the nation, and a colourful gourmand scene in part attributed to its winemaking custom. Global lodge manufacturers are recently coming into the marketplace, thru franchise agreements, making the marketplace scene much more lively and complex. Santorini’s massive recognition, then again, has unfortunately come at a value because the island is recently dealing with the side effects of overtourism.

Review

Santorini is a small, round archipelago of volcanic islands situated within the south Aegean Sea, about 200 kilometers southeast of Greece’s mainland. It’s sometimes called Thera (or Thira), forming the southernmost member of the Cyclades staff of islands, with a space of roughly 73 km² and a inhabitants of 15,250 (2011 census). It has a complete land space of greater than 90 km² together with the uninhabited islands of Nea Kameni, Palaia Kameni, Aspronisi, and Christiani. All 5 islands are organized in a hoop round a large caldera—i.e. a big volcanic crater—that’s virtually submerged underneath the Aegean Sea. The caldera is the results of the Minoan eruption, which used to be the largest volcanic eruption of all of them that came about round 1613 BC. Whilst many of the caldera is full of water lately, what’s left of it above floor is a semicircle of land on Thira (Santorini) that faces west and has turn into essentially the most well known a part of the island.

Map of Santorini

Supply: Greece-map.internet

The fashionable historical past of Santorini starts in 1956 with a devastating earthquake that significantly broken the island’s infrastructure. Santorini had survived on production, agriculture, and quarries, however after a length of reconstruction within the Seventies, it concentrated its efforts at the rising tourism trade, which lately stays the biggest contribution to the island’s financial system. Even if winemaking has been a significant component, too, that procedure used to be modernized after the 1956 earthquake into the trade that exists lately.

These days Santorini is likely one of the absolute best and maximum identified vacationer locations on this planet. Because of its distinctive good looks enhanced via the volcano and the breathtaking perspectives of the Aegean Sea, and its well-known sundown, the island is well-positioned within the area of interest marketplace of weddings and honeymooners as a super vacation spot. The island could also be in search of to expand theme tourism, akin to gastronomy tourism, wine tourism, and cultural tourism, in its bid to turn into a year-round vacation spot.

Accessibility Via Air

Santorini is served via one airport, the Santorini Global Airport, situated north of the village of Kamari, roughly six kilometers southeast of the middle of town of Thira. The airport serves each as an army and as a civil airport. The airfield can accommodate medium-sized jets in addition to smaller airplane scheduled airways together with Ryanair, Olympic Air, and Aegean Airways, with seasonal scheduled and constitution flights from different airways throughout the upper seasons in spring, summer season, and fall. There are recently 75 airways providing flights to Santorini, with their quantity emerging and flights coming back from dozens of nations, achieving as many as 57 an afternoon throughout the summer season months. As a part of its mandate for taking up control and operations on the 14 airports, Fraport Greece discovered a complete plan for the modernization and building of the airports. The corporate’s plan incorporated instant initiatives and building works for upgrading the airports’ amenities, which give a contribution considerably to bettering the whole buyer trip revel in whilst responding to the predicted build up in passenger site visitors.

Chart 1: Airport Arrivals 2010-21

Supply: Hellenic Aviation Authority

The airports have tripled the choice of passengers since 2010, whilst throughout the final years, previous to the pandemic, the island authorised greater than 100,000 further airport passengers each and every 12 months appearing the dynamics of the marketplace but in addition the truth that sea get right of entry to to Santorini is much less handy than to different Greek islands because of its a ways distance from the primary Greek seaports. The devastating have an effect on of COVID-19 is observed throughout the 2020 information, recording a lower of roughly 75% in comparison to final 12 months. Effects for 2021 then again, point out an amazing restoration pattern, particularly in global arrivals. In step with the newest information, global arrivals for 2021 are handiest 5.5% under 2019 ranges highlighting each the resilience of the particular sector and the indeniable international reputation that the island enjoys.

Via Sea

Santorini has 4 seaports that serve no longer handiest cruise ships and ferries but in addition yachts and fishing boats.

  • Athinios Port is the place the ferries land in Santorini;
  • Skala Port is constructed under Thira. Skala is the previous port of the island the place the cruise ships put anchor lately;
  • Amoudi Bay is located under the village of Oia. Because of its small intensity and measurement, it doesn’t accommodate large vessels. From Amoudi there are small boats that sail to the island of Thirassia. Additionally, some boat excursions get started and finish there;
  • Vlychada Port is subsequent to the seashore of Vlychada. That is the place small fishing boats and yachts put anchor. Many boat excursions get started and finish right here too.

Santorini government are making plans a big overhaul of its maritime infrastructure. A brand new marina budgeted at 40 million has been not too long ago accredited for building within the space of Monolithos. It’ll have 350 berths as much as an unspecified superyacht measurement. It’ll be run via the Municipal Port Fund of Thira and it’s expected that 120 new jobs can be created as soon as it’s finished.

Chart 2: Cruise Send Passenger Arrivals 2010-21

Supply: Hellenic Statistical Authority

In 2019 Santorini welcomed virtually 1,000,000 cruise send passengers who prevent via the island both for a couple of hours or at some point, a determine larger via 30.9% as in comparison to 2018. This process, then again, is intently related to the phenomenon of overtourism that Santorini is coping with throughout the final years.

Tourism

The tourism product in Santorini is pushed via person vacationers (accommodated in sumptuous lodge gadgets), and via staff recreational tourism visiting basically low season, whilst an important sub-market is the so-called “honeymooners” who trip to Santorini for his or her marriage ceremony rite and dinner party. This area of interest marketplace phase has abruptly evolved at the island from 1998 when there have been handiest 150 weddings to 2018 with an estimated 900 weddings. Basically, Europe represents the dominant supply area for visitation to Santorini via air. Nonetheless, incoming vacationers from China and the usA. also are a large number of and constitute a top share of the island’s general global visitation, however maximum frequently arrive via boat or aircraft from Athens or as a part of a cruise within the Mediterranean Sea. Even if Santorini accepts the primary quantity of holiday makers throughout summers it is regarded as to be the one Greek island that has controlled to considerably lengthen its seasonality and have a smoother seasonality trend. In step with tourism pros, the island would be the first island to reach the objective of all-year tourism. It’s value citing that some 100 resorts remained open during the wintry weather of 2019, representing one-eighth of the island’s general lodging capability, as a way to serve guests within the wintry weather months.

The island’s marketplace is split into two prominent portions:

  • The cliffs to the west of the island, are ruled via small ultra-luxury resorts and villa complexes providing unobstructed perspectives against the well-known volcanic Caldera, and reaching the best possible moderate price on a countrywide stage (particularly those situated within the settlements of Oia and Thira);
  • The beachfront resorts evolved at the east aspect are most commonly new tendencies, with the next choice of rooms, and are most popular via teams of holiday makers, and households (which for protection causes don’t seem to be allowed within the resorts constructed at the cliffs). Those resorts happy the larger buyers’ urge for food for presence at the island of Santorini, as because of land scarcity and development restrictions they’d restricted choices for building within the western a part of the island. Because of this, those new tendencies opened the way in which for global manufacturers, which have been additionally keen to go into the marketplace, thru franchise agreements.

Dealing with Overtourism

There’s rising worry that Santorini can’t take care of its burgeoning recognition for for much longer. The island is simply 76 km² -and site visitors jams and overcrowding have turn into a subject matter, as has emerging water and effort intake. What’s hanging in regards to the case of Santorini is that the advance pressures at the island didn’t decelerate even throughout the last decade of monetary recession. To the contrary, via 2019 Santorini skilled a frantic enlargement – stopped via the pandemic and the lockdowns – which made the Municipality of Thira probably the most richest within the nation. No less than 11% of the island has been concreted over lately, one thing that handiest compares with Attica whilst the inhabitants has shot as much as 25,000 [from 15,500 in 2011].

Non-public and public government are intensively running at the established order of strategic answers that may end up in a extra sustainable long term for the island. Movements targeted across the steadiness between the guests’ numbers and the island’s wearing capability are on most sensible of the time table. Different movements of number one worry are associated with the development of infrastructure, the applying of sustainable environmental practices via everybody concerned within the tourism trade, and the strengthening of native communities.

In August 2020, the Greek Ministry of Atmosphere & Power not too long ago suspended the issuance of recent development allows for vacationer lodging amenities on plots of land outdoor making plans zones at the islands of Mykonos and Santorini. The verdict, which in particular issues the development of recent structures of vacationer lodging, particular vacationer infrastructure amenities, and different tourism companies, used to be signed aiming to decelerate development process whilst the city making plans for the 2 Cycladic islands is in procedure. In step with Atmosphere and Power Minister, the suspension of creating allows will final till the Particular City Plans for each islands are accredited. The plans are anticipated to set transparent laws at the development capability of the 2 islands. Excluded from the suspension are plans that experience already been pre-approved via the dept of city making plans or programs for revisions to allows that experience already been submitted.

Elementary Visitation Elements

Visitation at resorts in Santorini has been basically of global nature; international visitation accounted for greater than 85% just about annually whilst their contribution has reached greater than 90% of the entire accommodated bednights. It must be additionally famous that till 2017 handiest 40-to-50% of the resorts supplied information to the Hellenic Statistical Authority whilst from 2018 all resorts at the island have been obliged to keep in touch their visitations effects to the Ministry of Tourism.

Chart 3: Elementary Visitation Elements – Santorini (Together with the small island of Anafi), 000s 2010-20

Supply: Hellenic Statistical Authority

Basically, the global phase has demonstrated larger resilience during the last years, achieving a height in 2011, and lowering thereafter, owing to a mixture of the worldwide financial uncertainty in conjunction with the unfavourable exposure Greece won over the 2010-12 length, and vigorously getting better in 2013-14. 12 months after 12 months global visitation stories new record-breaking ranges. Home tourism recorded important shrinkage from 2010 to 2012, basically because of the lower in native industry process and the ensuing aid in disposable source of revenue. From 2012 onwards, home visitation in lodge homes within the area displays relative stagnation. The choice of vacationers saved rising thereafter on account of the growth of the tourism season and the addition of recent lodge homes.

The common period of keep for global vacationers remained rather unaffected during those years ranging between 3 and 4 days whilst seasonal mattress occupancy went thru extra intense fluctuations.

The devastating have an effect on of COVID-19 is observed throughout the 2020 information, recording a lower of roughly 79% and 59% in global and home bednights respectively whilst many lodge gadgets at the island stayed closed.

As for 2021, the vacationer site visitors in Santorini used to be in particular top in keeping with press releases, with the island’s hoteliers stating themselves happy with this season, in spite of the difficulties they skilled because of the pandemic. In step with the president of the Santorini Resort Affiliation, throughout the second one part of July and August, there have been many last-minute bookings that rocketed the occupancy charges to greater than 90% and in the end reached 2019 ranges. As for September occupancy charges stay abruptly top, at 85% and 75% throughout the 1st and 2d part, respectively.

Resort Provide

Nearly all of resorts in Santorini are categorized as one- and two-star, whilst five-star gadgets account for handiest 17% of the entire lodge provide in 2020. Nonetheless, five- and four-star lodge gadgets in combination constitute about 55% of the entire choice of to be had rooms and beds. In 2020, the common five-star lodge in Santorini featured 36 rooms, a determine that remained unchanged since 2012.

Chart 4: Resort Provide 2013-20

Supply: Hellenic Chamber of Motels

The small choice of rooms featured via luxurious resorts is because of more than a few barriers akin to development coefficient, and architectural restrictions, particularly in Oia, the place essentially the most luxurious homes are situated. It’s obtrusive that buyers at the island appreciated the development of luxurious homes, for the reason that choice of five-star gadgets reached 53 from 16 over the last 8 years, whilst five-star rooms and beds larger via greater than 3 times. To conquer the issue of land scarcity and area limitation, and given the sustained enlargement of holiday makers, five-star lodge buyers have began growing luxurious initiatives in much less congested spaces of the island the place they’ll be capable of generate extra roomnights at decrease charges regardless that.

What’s hanging is that handiest throughout the final 3 years 18 new five-star resorts had been added to that island’s provide exhibiting the larger luxurious funding urge for food. Irrespective of this enlargement, branded lodge provide at the island used to be, till not too long ago, virtually non-existent basically because of the restricted choice of rooms featured via luxurious lodge homes but in addition because of the truth that the homeowners of the homes, situated in Oia and Fira, have witnessed exceptional earnings enlargement even with out being related to a logo. within the agreement of Oia, and within the space of Megalochori, have been the first-ever branded homes at the island.

Lately, buyers or lodge homeowners, discovered that homes constructed outdoor the widely recognized settlements of Oia and Thira may well be related to an across the world identified hospitality logo, both via a franchise or a control settlement, so that you can command upper charges and lengthen the running season as in comparison to different unbranded resorts within the instant space. That is the case of the , with 62 rooms, which began operations in 2019 within the space of Monolithos, the five-star

, the first-ever TUI branded lodge at the island opened in 2019 within the space of Perissa that includes 99 rooms, and the with 102 rooms which opened in July 2021 within the space of Kamari. Approaching branded homes come with the brand new which is able to release in summer season 2022, with 37 rooms within the space of Exomitis, and the brand new , set to open in summer season 2022 with 59 rooms and suites within the space of Vourvoulos. The newest announcement of an upcoming branded assets is that of which is about to open in June 2022 with 30 rooms, within the space of Imerovigli, boasting Caldera perspectives.

In any case, there are a number of resorts that experience turn into contributors of lodge advertising consortiums akin to Relais & Chateaux, Small Luxurious Motels of the Global, Main Motels of the Global, Nice Motels of the Global, Historical Motels of Europe, and Design Motels.

Resort Efficiency

The next chart supplies a sign of the evolution of the efficiency of twenty-two lodge homes, comprising one of the most maximum prestigious resorts in Santorini, situated alongside the japanese coast of the island and overlooking the Caldera. The homes evolved on this a part of the island, are ready to command the best possible charges, amongst all homes at the island, in distinctive feature in their distinctive location and the perspectives they function. Spaces such because the famend villages of Oia and Thira collect many of those homes. It must even be famous that each one occupancy percentages check with 12 months of operation for consistency causes.

Chart 5: Efficiency of Decided on Motels 2018-20

Supply: HVS Analysis

Santorini is likely one of the leaders in Greece, when it comes to accomplished efficiency. This could also be mirrored within the dynamics of occupancy and the common price of the particular aggressive set. Resort operators in Santorini center of attention extra on moderate price fairly than quantity, as one of the most maximum prosperous vacationers discuss with the island. The occupancy price then again is likely one of the best possible recorded, on a countrywide stage, when in comparison to different Greek seasonal locations. That is attributed each to the truth that Santorini is playing a world recognition as probably the most sought-after recreational locations, but in addition to the truth that the ministry of tourism and the island’s administrative government are intensely running on increasing its running season and positioning Santorini as a year-round vacation spot.

In 2019 occupancy fairly fell on account of new resorts/rooms coming into the marketplace. The unlucky tournament of the pandemic’s outbreak is depicted in 2020 effects when lodge operators witnessed the occupancy in their resorts plummeting to exceptional ranges as touring got here to a halt; they controlled then again to stay the common price on rather top ranges because of the profile of the island’s guests. In step with conversations with lodge pros, in 2021 occupancy and moderate price virtually recovered to ranges previous to the pandemic, highlighting the resilience of the vacation spot.

Nana Boussia is an Affiliate Director with the Athens Place of business. She joined HVS in early 2016 and because that point, she has been thinking about more than a few feasibility and valuation initiatives in Greece, Italy, Spain and different international locations. Nana holds some extent in Civil Engineering from the Aristotle College of Thessaloniki and a postgraduate degree in hospitality research from Glion Hospitality Faculty. Touch her at nboussia@hvs.com.

Pavlos Papadimitriou is a Director with the Athens Place of business of HVS that specialize in lodge valuation and monetary consultancy, and a member of the Royal Establishment of Chartered Surveyors. He joined HVS Athens in overdue 2007 after finishing the MBA programme of Les Roches Faculty of Resort Control in Switzerland and a BSc in Advertising and Communique from the Athens College of Economics and Trade. Since then, he has carried out a large number of valuations, feasibility research, and marketplace analysis analyses within the Balkans, Cyprus, Georgia, Greece, Italy, Poland, Spain, and Turkey. Touch him at ppapadimitriou@hvs.com.



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