Patmos: €20m Hotel Investment to Boost Island’s Tourism Appeal

The five-star Patmos Aktis Suites & Spa hotel.

The SMERemediumCap (SMERC) investment fund is in the process of carrying out the biggest investment that has ever taken place on the Greek island of Patmos.

Aiming to boost the tourism appeal of the island, SMERC is investing 20 million euros in the Patmos Aktis Suites & Spa hotel. The first phase of the investment cycle, which includes upgrade and renovation works, is near completion and the second is expected to wrap up in 2024 with the addition of more suites to increase the hotel’s capacity.

Speaking to journalists on Tuesday during a media event in Athens, SMERC President Nikos Karamouzis highlighted that the investment in the Patmos Aktis Suites & Spa hotel is the largest ever made on the island and aims to further enhance the image of Patmos as a tourism destination.

Patmos Aktis Suites & Spa CEO and General Manager Theodoros Terzopoulos and SMERC Managing Partner Theodoros Moschos look on while SMERC President Nikos Karamouzis (right) speaks to the Greek media.

“Our goal is to contribute to the attraction of upscale visitors to the island’s tourism sector, the prospects of which appear particularly positive for 2023,” Karamouzis said.

The holy island of the Apocalypse

Part of the Dodecanese island group, Patmos is reputed to be where St John the Theologian wrote both his Gospel and the Apocalypse. The town of Chora, the medieval settlement of Patmos, is a UNESCO World Heritage Monument.

Panoramic view of the island of Patmos.

Located a short distance from Chora, on the bay of Grikos, on the southeast side of the island, today’s 5-star Patmos Aktis Suites & Spa originally operated as a “Xenia” hotel, part of the historic hotel chain created in the 1950s by the Greek National Tourism Organization (GNTO). After a long period of abandonment, in 2009, it became the property of the hotel company Divine Group and then was acquired by SMERC in 2022 following a tender process.

Hotel’s occupancy, revenue rise after acquisition

Following upgrade works, Patmos Aktis Suites & Spa started its operation in June 2022 under new ownership that managed to increase the hotel’s occupancy and revenue, after a long period of low performance, significantly improving productivity indicators.

Patmos Aktis Suites & Spa CEO and General Manager Theodoros Terzopoulos.

The hotel’s new management aims in 2023 to further increase occupancy for the total period to 71 percent and within the next years to 75 percent. Management is also looking to extend the hotel’s operating period from about 120 days to 160 days.

“The vision is to offer a hotel that is a destination where guests can enjoy exceptional care and hospitality experiences and connect with the unique beauty and culture of the island of Patmos,” Patmos Aktis Suites & Spa CEO and General Manager Theodoros Terzopoulos said.

Already, just after a year under SMERC’s new ownership, Patmos Aktis’ direct bookings account for 73 percent of its total reservations and 63 percent of its clientele are foreign residents.

Plans for addition of 34 suites

SMERC President Nikos Karamouzis presenting facts about the investment involving the Patmos Aktis Suites & Spa hotel.

During the media event, Karamouzis informed that SMERC is currently in negotiations for a franchising agreement with a leading international hospitality brand. Although he did not disclose the brand, Karamouzis said that if an agreement is reached, it will be a move that will “further upgrade the island’s offered tourist product”.

He also announced plans to expand the hotel’s capacity by adding 34 more suites with a sea view on a privately-owned plot adjacent to the complex by the end of 2024. Patmos Aktis Suites & Spa currently has 56 suites.

“The investment plan has already been submitted to the archaeological service and its final approval is expected from the Culture Ministry,” he said.

Patmos Aktis Suites & Spa hotel, double room.

It is noted that the investment plan to renovate the existing hotel complex, as well as the expansion plans, are included and partially financed by the Recovery and Resilience Fund.

The Patmos Aktis Suites & Spa hotel currently has 85 employees. When the investment is completed the hotel is expected to employ over 110 people, doubling the number of employees compared to 2019.

An example of quality tourism

“Our investment in Patmos Aktis Suites & Spa is an example of the consolidation of a hotel unit that adds value, investment and jobs to Patmos and the Greek economy, as well as an example of offering a quality tourism product and high level hospitality,” SMERC’s president said.

The bay of Grikos, Patmos.

However, he stressed that in order for this large investment to reach its full potential, crucial infrastructure projects on the island need to be completed by the government and the South Aegean Region, namely improving access to the destination by air and sea, improving the level of electricity supply and better waste management.

South Aegean Region Governor George Hatzimarkos was present at the media event and applauded the 20-million-euro investment on Patmos, which, as he said, sets “a new standard” for Greek tourism.

South Aegean Region Governor George Hatzimarkos.

“The South Aegean Region and I personally will always stand by those investments that bring added value to the tourism product and employment for our islanders and the country as a whole, having as their priority excellent hospitality, respect for the environment and traditions and the synergies with the local community,” Hatzimarkos said.

On his part, Patmos Mayor Eleftherios Pentas said SMERC’s investment in the Patmos Aktis Suites & Spa hotel elevates the island as a destination and offers guests the highest level of infrastructure and services, while respecting its natural beauty and cultural heritage.

Patmos Mayor Eleftherios Pentas.

“We therefore welcome such quality investment projects that have a beneficial effect on the economic activity and employment of the residents of Patmos,” he said.

SMERC makes strong entry in hospitality industry through “Project Tethys”

The first mid-market turnaround private equity fund in Greece, SMERC invests in businesses operating below their full potential or undergoing significant transformation. The fund aims mainly to bridge the equity funding, strategic and management skills gap of mid-sized corporates, which are over-leveraged and/or underperforming.

SMERC chose to focus more on the hospitality industry by becoming part of a consortium that includes Latonia Enterprises and Brown Hotels and which recently acquired a “red loan” portfolio (known as “Project Tethys”) from Intrum Hellas that includes 72 hotel units with a legal claim of 254 million euros.

SMERC President Nikos Karamouzis.

Tethys, which is the first sectoral portfolio of loan liabilities sold on the secondary market in Greece, consists of 72 hotel units with more than 4,000 rooms in popular tourist destinations of which 50 percent are located on Aegean islands (22 units), of Ionian (3) and Crete (11) while the rest in Macedonia and Thrace (19 units), Central Greece (9) and the Peloponnese (8).

Intrum Hellas is the manager of the claims arising from loans and credits from the special purpose companies with the names Sunrise I NPL Finance DAC, Sunrise II NPL Finance DAC and Vega II NPL Finance l DAC to which the specific portfolio belongs.

Referring to “Project Tethys”, Karamouzis said that SMERC’s goal is to make all hotels in the portfolio sustainable.

“We will not close any of the 72 hotels and intend to work closely with the debtors to find sustainable solutions to restore the financial health of their businesses,” he said.