Following its new cooperations with global hospitality giants Marriott and Nikki Beach, Greek hospitality experts Simple Way of Tourism (SWOT) are currently assessing investment opportunities with other international hotel brands as well, according to the company’s CEO, Nikos Konstantinidis.
“Our strategy is to grow on a sustainable way, without sacrificing our integrity, business ethos and the financial and operational results we bring to our clients,” Nikos told GTP Headlines.
Also an equity partner of SWOT, Nikos has more than 20 years of hands-on experience in areas of hotel management, hotel real estate operations and development, acquisitions and dispositions.
He has conducted numerous investment valuations both of single trophy assets and of real estate portfolios and participated in numerous complex advisory projects for clients such as Alpha Bank, Eurobank, Piraeus Bank, Attica Bank, the Bank of Greece, Sheraton, Marriot International and ICI REIC.
Nikos has also served as a hospitality expert for systemic and non-systemic financial institutions, Greece’s public assets fund HRADF, the Bank of Greece, international auditing companies (Grant Thornton, BDO), JLL, REITs and some of the most prominent international private equity funds
In this interview, Nikos outlines SWOT’s strategy and refers to the company’s plans to add to its portfolio of hotels in Greece. He also gives us an update on the current situation regarding NPLs of Greek hotels and shares his thoughts on Greece’s 2019 tourism season.
“We have a pipeline of hotels looking at both in Greece and abroad… I am certain that within 2020 you will see SWOT expanding abroad.” – Nikos Konstantinidis
- GTP: Nikos, please share some career highlights in regards to the hospitality sector with our readers.
Nikos Konstantinidis: I come from a hotelier’s family (Hydra Beach Hotel and Porto Hydra Hotel, Village & Marina) and have been working in hotels since high school. In 2011, being mandated by my family, I sold the majority stake of our hotel business and created a boutique hotel investments advisory firm through which we conducted several studies and advisory work for the HRADF, the Bank of Greece and several financial institutions. I have also been working as the hospitality expert for international auditing firms in Greece. My partnership with George Constantinidis, founder and Chairman of SWOT, with whom we share the same values and vision, seemed to me a natural move forward in realizing my full potential.
- GTP: What are your aims as CEO of SWOT?
Nikos Konstantinidis: SWOT is currently developing its service offerings based on three pillars of services, namely a) Sales & Marketing representation of hotels, b) strategic and financial advisory services for hoteliers, financial institutions and investors and c) hotel management services.
Through integrating the capabilities and competencies of its interdisciplinary teams, SWOT aims at being the preferred partner for hoteliers, financial institutions and investors who wish to optimize the value of their hotel real estate asset and the return on their vested interest.
We have a proven track record in successfully optimizing revenues, managing costs and improve margins, creating value and return on invested capital and assisting in divestments and acquisitions.
- GTP: SWOT’s latest news includes it managing the operations of the new Marriott Autograph Collection hotel on Mykonos and also taking over the management of the Nikki Beach Resort & Spa in Porto Heli. What are SWOT’s future plans and what more will it provide to its customers?
Nikos Konstantinidis: SWOT is a white label operator approved by Marriott and Nikki Beach and we are currently assessing investment opportunities with other international hotel brands as well. But we do have a portfolio of more than 25 hotels we work with (branded and non-branded) around Greece.
Our strategy is to grow on a sustainable way, without sacrificing our integrity, business ethos and the financial and operational results we bring to our clients. We have a pipeline of hotels looking at both in Greece and abroad and I am certain that within 2020 you will see SWOT expanding abroad.
- GTP: You also have much experience in investment valuations and have conducted advisory work related to over 500 real estate assets. Can you give us details on these activities?
Nikos Konstantinidis: Well, I have been fortunate to work in the past in some of the most complicated hotel real estate strategic and financial advisory projects in Greece. I have provided strategic and financial advisory services to almost all the Greek systemic banks related to hotel asset portfolios of nearly 500 hotel assets. My scope in these mandates included hotel asset portfolio valuation, clustering and operational and financial optimization. I have also conducted numerous studies for single asset or portfolio hotel owners in Greece and abroad. All these projects have equipped me with a 360view, allowing me to empathize with all stakeholders in a hotel related project.
- GTP: How do you see the lending market changing in Greece, when it comes to non-performing loans (NPLs)? What is the current situation regarding NPLs of hotels in Greece?
Nikos Konstantinidis: Banks have been decreasing their NPL exposure so far both by trying to reach out to borrowers (hoteliers) and propose debt restructuring plans and by transferring large (mainly SME-related) NPL hotel asset-backed portfolios to funds. Both loan recovery routes create opportunities for new lending and refinancing in the market. Based on the experience with hotel-related NPLs, it seems that more than 60% of the defaulters are strategic ones. However, approximately 8 out of 10 strategic defaulters tend to turn to cooperative borrowers once legal actions originate. Our advisory department is currently assisting hoteliers in negotiating with funds and banks regarding their NPLS successfully.
- GTP: Would you say that NPL portfolios are a hidden opportunity for investment groups?
Nikos Konstantinidis: NPL portfolios related to hotel assets pose an investment opportunity for real estate investment groups that target to higher Equity IRR. There is however, a considerable micromanagement hustle attached to these opportunities as most of them need actions for illegal building legalization, new capex for renovation and third-party operator engagement for financial optimization. The funds will need to cluster some of the assets to create economies of scale and scope for the operators engaged, for branding purposes and for disposition strategy facilitation.
- GTP: What challenges do you see in hospitality (generally and in Greece) these days? If you could pass on a message to the hospitality industry, what would it be?
Nikos Konstantinidis: In my view, the greatest challenge we face in the hospitality industry is the gap in talent required. The growth rate of tourism creates a significant demand for well trained tourism professionals, but the current stock and future supply of these people depict a shortage that needs to be covered. Other significant challenges in the sector in Greece is the lack of strict regulation on Airbnbs and the high corporate taxation. The message I would pass to the industry is invest in your people, as they are you most sustainable competitive advantage you can have and respect your customer’s time and money.
- GTP: In regards to Greek tourism, how do you see the sector progressing this year?
Nikos Konstantinidis: After a period of constant growth rates both in terms of tourism arrivals and tourism receipts, I believe that this year we will witness a slight correction. Many tourism destinations that act as direct competitors to Greece’s tourism offering seem to be rebounding for various economic and geopolitical reasons. So, I believe this year we will achieve – at best – the same results as last year. However, this does not mean we should not increase and orchestrate the collective efforts of all public and private stakeholders in Greek Tourism towards further growth.
* Nikos Konstantinidis holds an MBA with specialism in Corporate Strategy with Honors, an MSc in Research, a BSc in Hospitality Sales & Meeting Management summa cum laude and a Swiss Diploma in Hotel Management with Honors. He is certified by Cornell in Hotel Investments & Asset Management, by LSE in Managerial Finance and by HARVARD in Negotiations, and he is member of the Academy of Management.