Eleni Vrettou Executive General Manager, Chief of Corporate & Investment Banking, Piraeus Bank

Investment landscape of 2021 – Conditions and prospects of tourism industry

Piraeus Bank, recognizing both the major contribution of Tourism Sector to the Greek economy (20-25% of GDP directly and indirectly) as well as its significant growth prospects, has strategically decided to support our clients in the sector.  Total balances of the Bank against the sector amount to EUR 3 billion as at 31.12.2020.

Regrettably, the outbreak of the pandemic has put a halt on the sector’s growth prospects, causing an unprecedented disruption. In this context, Piraeus Bank, taking into account its leading position in the financing of the sector expressed actively its support by adopting measures of indirect and direct enhancement of the liquidity of the affected borrowers. 

In particular, the Bank extended dedicated moratoria for capital repayments for the years 2020 and 2021 to borrowers with total loan balances of 900mn, while additionally it has provided fresh financing through the use of the available government support programs (EAT, TEPIX total amount of 152m) as well as other financial tool and own funds.

Current consensus by Research and analysts is that the years 2021 and 2022 will be transitional years leading to the eventual but probably certain recovery of the sector back to the 2019 levels, while expecting to show signs of strong growth in the medium to long term i.e. after 2023. It is expected that particularly in the geographies where significant infrastructure works will take place (i.e. expansion projects at local airports etc.) the future prospects of the sector will be even more promising.

In order to strengthen the sector’s prospects, the competitiveness of Greek Tourism should be further enhanced through the implementation of new Public Investments under the scope of the EU Recovery and Resilience Fund. These investments relate to further upgrades of infrastructure (airports, ports, and road network) and to the implementation of utility projects such as waste management, with emphasis on the protection and promotion of the natural and cultural environment. 

At the same time, investment interest is still high and is expected to further increase gradually from 2022 onwards. Key drivers to this will be the implementation of a series of strategic investments, market transformation and investment opportunities which are likely to emerge, creating opportunities for consolidation in the sector through merges and acquisitions in order to address the challenges of the units that have been unable to withstand the consequences of the pandemic.

Developments in the legal framework and operation of the Public Sector will also determine the pace of implementation of the planned tourism investments. Indicatively, new city plans, in combination with faster approval of new development projects and the licensing framework of coastal zone, consist some of the above mentioned factors.

Piraeus Bank, maintaining its leading position in the hotel industry, is open for business, financing credit worthy companies with good business plans showing the path to growth. The Bank’s besides the usual working capital financing and transactional needs, is also keen to finance capex and investment plans prioritizing sustainable projects that adopt ESG criteria and have a positive impact on the environment and social welfare.

In order to enhance the liquidity of the Sector during the transitional years 2021-2022, without additional leverage of the companies, the Bank designs new specialized products adapted to the current needs.  Most recent addition to this is the new innovative solution of “Tourism Sunrise”, which is a dedicated set of solutions for hotels of all sizes aiming to provide the necessary funds in a structured way so as to open for the new tourist season in 2021.

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