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Why invest in golf and residential tourism in Greece? Athens conference marks turning point in Greece's determination to evolve into year-round tourist destination October 9th, 2003 -- In a country with four distinct seasons ranging from sunny and hot, to cold, wet and windy, namely the United States, there are over 20,000 golf courses. This amounts to nearly half of all the golf courses throughout the entire world! In Greece, a country known for its spectacular weather as well as seasonal changes, there are only 6 golf courses. Two thousand golf courses are coming on stream annually around the world. Only ten are in planning or actually under construction in Greece. In Spain, the golf tourism industry generates around USD 3 billion dollars annually -- and Portugal is fast nipping at its heels. In Greece, golf tourism isn't even on the radar screen! All this is about to change with the organisation of an exciting conference and exhibition in Athens this November: The 2003 GOLF Investment and Real Estate Conference & Exhibition, November 28th & 29th, 2003 at the Athenaeum InterContinental Athens. Organised in cooperation with The U.S. Commercial Service at the U.S. Embassy in Athens, the Conference will feature a U.S. Exhibition Pavilion. The event will focus on all aspects of GOLF and tourism real estate, resort and multi-use development, including all related products, equipment, services and technologies required for tourism infrastructure expansion. It is intended for designers, planners, manufacturers, equipment and service suppliers as well as management companies and resort operators from the world's leading companies in the hospitality and leisure industry. Nearly a dozen top industry leaders from U.S. firms have already signed up as speakers and participants. Moreover, many investors, political and business representatives and leisure and hospitality decision-makers from throughout the European Union and the virtually untapped surrounding markets of Central and Eastern Europe and the Mediterranean rim are expected to attend. Clearly, golf tourism can act as a catalyst to help Greece extend its current 6-month tourist season all year-round. Events such as the upcoming GOLF investment conference will focus attention on a wide variety of tourism infrastructure development and upgrade business opportunities. Such business development projects can make Greece competitive for its share of European and world-wide year-round tourism. The facts... According to the World Travel and Tourism Council and the Greek National Tourism Organisation (GNTO), Greece was ranked 15th in the world by classification as a tourism destination in 2001 receiving 14 million international tourists who contributed approximately USD 9.2 billion to the Greek economy. Overnight stays in 2001 rose by 3.0 percent as compared to 2000. This ‘active’ industry represents approximately seven percent of the country’s GDP and employs 10 percent of the workforce. ...and the outlook The outlook for golf and tourism related infrastructure projects in Greece is expected to remain strong. The Athens 2004 Olympic Games, in conjunction with the Greek government’s ambitious programme to revitalise the country’s tourism infrastructure, will continue to support the Greek tourism industry and provide numerous opportunities for European, U.S. and international firms in Greece through 2007 and beyond. Greek business officials realise that attracting year-round tourism, especially high-end tourism, will be an important part of their economic growth during the post Olympic period. Europe's 'baby boomers' reach the age of retirement "Europe is faced with a major demographic change over the next 10 years," writes Mr. James Ward, Chartered surveyor and real estate consultant, Lambert Smith Hampton (Hellas), Greece, in his article "Build holiday homes -- Large-scale developments will attract wealthy foreigners, boost economy" (Kathimerini English Edition -- click here to read the full article). "The largest segment of the population — known as the 'baby boomers' — is reaching the age of retirement. This change is expected to create a series of economic opportunities in the real estate sector. According to official statistics, the baby-boomer generation accounts for about 50 million of the total population. This figure includes a considerable number of affluent homeowners with large private pension provisions and long life expectancies. This generation has also experienced good capital appreciation on their residential property. For them, the purchase of a property in a warmer climate is both an improvement in lifestyle and a sound financial investment. The most common method of purchase is through an equity transfer from residential property owned in the home country. This enables millions of people to buy second homes in the Mediterranean markets. "A sizable proportion of these people live in the colder northern European countries, including Germany, Holland, Denmark, Sweden, Britain, Belgium and Norway. As the first generation to enjoy annual holidays in the Mediterranean, many of those who can afford it are looking to live semi-permanently in warmer climes. "Although limited official statistics exist, international estate agents in Spain estimate that 30,000-40,000 properties were sold to people from the UK during 2002. With average unit prices around 175,000 euros, this amounts to 5-7 billion euros of direct foreign investment. With the inclusion of other international buyers, total investment is far higher." In the same article, Ward went on to to note that, "During 2002, fewer than 3,000 foreign nationals bought second-home properties in Greece. So what’s the problem? Is Greece less beautiful than Spain? Is it a less desirable place to live? Admittedly, Spain and Portugal have more (and cheaper) flights to the northern European markets but this is largely the result of historically greater demand. Charter and budget airlines have indicated that they would fly to more Greek destinations if there was greater demand apart from the summer season. So what's the problem? In his article in the "Kathimerini English Edition," Ward writes, "The problem is that the existing supply of residential property in Greece fails to stimulate demand. Existing zoning policies limit residential development outside urban areas and although illegal development is commonplace, international purchasers are rightly cautious about illegally built properties. Zoning laws make it difficult to create larger-scale developments that can provide the facilities required by international buyers. Small-scale development also cannot justify the expenses of international marketing and promotion. Consequently, little effort is made to promote Greek residential properties to the international markets. As a result, there is a limited awareness of the market and, therefore, less demand. This is not helped by the prevailing perception that international purchasers will pay over the top for property. Not true — international buyers normally have a good knowledge of prices in other European countries. When presented with inflated asking prices they simply reject the property outright." Solutions and benefits "A structured policy on the development of the Greek market is important to ensure that planning legislation makes land available in the right locations," according to Ward. "Additional policies that focus on the quality, legality and protection of the environment in developments should be implemented. Attempts to launch larger-scale development have met with opposition from planning authorities, while small-scale illegal development continues with little enforcement of planning policy. "The potential economic benefits of opening up this sector would be substantial. For example, if 200,000 new residential properties were developed over the next 10 years and sold on the international market at an average price of EUR 200,000 this would be equivalent to EUR 40 billion of direct foreign investment. Secondary local spending could also be worth billions of euros per annum. Based on the potential demand and comparisons to other markets, this figures are conservative. It is not rocket science, which is why other counties are starting to develop their residential tourism markets. Croatia, Turkey, Egypt and Bulgaria are all trying to develop their residential markets and attract foreign investors. For the moment, Greece enjoys the major advantages of being an EU country, i.e. possessing a lower risk profile, residency agreements and capital transfers agreements. However, these newer markets are very competitive in pricing and some are aiming for EU membership in 2007. "If encouraged, these levels of investment could make a valuable contribution toward sustaining economic growth after the Third Community Support Framework structural funds run dry in 2006 — or it could be another missed opportunity." Athens conference marks turning point for Greece According to Mr. Walter Hage, Commercial Counselor at the U.S. Embassy in Athens, "The 2003 European GOLF Investment and Real Estate Conference & Exhibition, marks a turning point in Greece's determination to evolve into a year-round tourist destination. Moreover, it offers an outstanding opportunity for representatives from the many sectors of the golf, resort and tourism infrastructure industry to meet with decision-makers and counterparts from nearly two dozen countries in the EU and surrounding, rapidly emerging tourism markets." Mr. Hage went on to note that, "The conference will highlight all areas of resort development focusing on GOLF development and leisure real estate, accompanying mixed-use development, including golf, vacation ownership resorts, and the latest technologies employed." "No one connected with any aspect of golf, resort and tourism infrastructure expansion can afford to miss this exciting two-day event in Greece," said Hage. Greece, an emerging golf and residential tourism industry "Golf resorts and real estate development, correctly planned and instigated in Greece, will allow for continual viable investment in the Greek Tourism and Real Estate industry and significantly contribute to year round tourism," according to Mr. Alex Hillston, Vice President, Albatross Investments and Development, Greece, and Conference Director of the event in Athens on November 28th & 29th. "Golf has become a world-wide catalyst for profitable investment and Greece's virgin market will become very attractive for local and foreign investors. "Golf real estate in the US is one of the biggest industries for building development. For Northern Europeans, Australians and Americans, the opportunity of owning a holiday house or retirement home on a golf course in Greece is clearly an alternative for them. Thus there is tremendous opportunity for developing golf resorts with housing, which could parallel the boom in the US, Spain and Portugal. It should be noted that the creation of housing developments will encourage medium and high income earners permanently or part time in Greece, thus creating a new income source through an emerging golf industry." Risk of Greece being bypassed by Cyprus and Turkey "Europe's population is aging and people's money is heading South [Southern Europe]," says Mr. Yiannis Papadomarakis, Publisher, RE+D (Real Estate and Development) magazine, Greece, one of the Greek conference speakers who will deliver a speech on November 28th. "That's what makes the residential tourism industry a great opportunity for Southern European and Mediterranean countries, and especially for Greece. The development in Spain and Portugal has saturated. The new, potentially emerging markets in Southern Europe are Cyprus, Turkey and Greece. There is, however, a very significant risk that Greece could be bypassed by Cyprus and Turkey due to the fact that the incentives given by the Greek government are not sufficient enough. This could evolve into yet another missed opportunity for Greece." Why invest in Greek tourism?
Further information For
further information, please contact Mr. Peter
Michel Heilmann, Sources: INVgolf, U.S. Commercial Service at the U.S. Embassy in Athens, Kathimerini English Edition, Hellenic Centre for Investment - ELKE.
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