International investing

in Mediterranean resort
and hotel real estate
A joint survey by Tranio and The Mediterranean
Resort & Hotel Real Estate Forum (MR&H)

2018

www.tranio.com  + www.mrandh.com
International investing in Mediterranean
resort and hotel real estate

International investing in Mediterranean resort and hotel real estate

is on the rise. This is evidenced by the results of an online survey
conducted jointly by Tranio and MR&H in 2018. The majority of
respondents (86%) note that the activity of international investors
is increasing.

Figure 1. How would you rate the pace of international investing

in Mediterranean resort and hotel real estate?
Respondents, %

It is increasing 86%

It is at the same level 12%

It is decreasing 2%

A joint survey by Tranio and MR&H 3

 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 Mediterra­
nean 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 sur­
veyed consider this category unpopular.

Figure 2. How popular is resort and hotel real estate in the Mediterranean
for international investors versus other types of income property?
Respondents, %
Tranio respondents MR&H respondents
Very popular 34% 57%

At an average level 52% 39%

Less popular 14% 4%

4 International investing in Mediterranean resort and hotel real estate

 Spain, Greece and Italy top the ranking as the most attractive coun­
tries for investors, although their positions are evaluated differently by
respondents of Tranio and MR&H:

Figure 3. Which countries in the Mediterranean are most attractive

to international investors in resort and hotel real estate?
Respondents, %

Tranio respondents MR&H respondents

Spain 59% Greece 85%

Italy 36% Spain 50%

Greece 23% Portugal 20%

France 23% Italy 10%

Cyprus 10%

The survey result exceeds 100% because respondents could name more than one country.

A joint survey by Tranio and MR&H 5

 The factors which make a country popular among investors are
a stable economy and low bank charges (Spain, Italy, France), the res­
idence permit for investment programmes (Spain, Portugal, Cyprus),
and a growing market with high yield prospects (Greece).
According to some respondents, investor interest in Spain tempo­
rarily 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 envi­
ronment is complicated by protracted judicial procedures. Neverthe­
less, 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 loca­
tions mentioned.
Finally, Rome, Milan and Puglia were each named by 18% of the
respondents as preferred destinations.

6 International investing in Mediterranean resort and hotel real estate

 Answering the question of who are the top nationalities investing
in Mediterranean resort and hotel real estate, respondents said that
nationals from Russia, the United States, China and the Arab countries,
and other countries of the former Soviet Union, top the list. However,
both Tranio and MR&H respondents differ in their views as to the
ranking of the investors regarding their nationality.

Figure 4. What are the top nationalities investing

in Mediterranean resort and hotel real estate?
Respondents, %

Tranio respondents MR&H respondents

Russia 65% USA 47%

USA 41% Israel 35%

China 29% China 29%

Arab countries 29% Arab countries 29%

UK 24% Russia 29%

Germany 24% UK 18%

Switzerland 18% Turkey 18%

The survey result exceeds 100% because respondents could name more than one country.

According to the respondents, in Greece, real estate funds

from the United States, as well as British private equities, stand out
among investors.

A joint survey by Tranio and MR&H 7

 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 respon­
dents’ votes).

Figure 5. Which type of resort and hotel real estate in the Mediterranean
is most promising for international investments?
Respondents, %

Mid-scale hotels (3/4-star) 29%

Resorts 27%

Luxury hotels (5-star) 25%

Serviced apartments, Extended stay 15%

Budget hotels 4%

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.”

8 International investing in Mediterranean resort and hotel real estate

 Almost half of the respondents (46%) believe that the main reason
for buying resort and hotel real estate in the Mediterranean is a desire
to have their own housing where they can take a vacation. However,
almost the same number of the survey participants (41%) think that
investors are buying such properties to diversify their portfolios.

Figure 6. What is the main reason for international investors

to buy Mediterranean resort and hotel real estate?
Respondents, %

Holiday, second-homes 46%

Portfolio diversification 41%

EU residency 37%

High yields 35%

Tax optimisation 2%

The survey result exceeds 100% because respondents could choose up to 2 answer options.

A joint survey by Tranio and MR&H 9

 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.

Figure 7. In cases when an investment made in Mediterranean resort

and hotel real estate becomes unprofitable, what is the main cause?
Respondents, %

Ineffective management 72%

Poor location choice 39%

Overhead operating costs 28%

Political or economic instability 20%

Terrorism threats 9%

Low occupancy 4%

The survey result exceeds 100% because respondents could choose up to 2 answer options.

10 International investing in Mediterranean resort and hotel real estate

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