European hotel investment giant Azora has made a move into the Greek hotel market, as it plans to replicate the success it has already enjoyed in Spain.
The company has acquired a majority stake in Greek company Donkey Hotels, buying 50.1% of the company alongside the existing owners, the Ioannou family.
Building on solid foundations
Donkey Hotels currently operates five hotels in Greece, and together the two companies now plan to grow the platform by acquiring many more properties in the country. Seeking hotels with both strong leisure and business demand, they will look to acquire and then operate the properties under one entity.
Currently, Donkey Hotels owns and operates four hotels in Athens, and one on the island of Santorini. In the Greek capital, there is the Athenaeum Hotel, which operates under IHG’s InterContinental brand, the NEW Hotel, Semiramis Hotel and the Periscope Hotel. On Santorini, Donkey Hotels runs the Nous Santorini hotel. All together, the properties add up to a portfolio of 834 rooms.
“This is an important moment for Donkey Hotels, as we evolve from a fully family-owned business into an institutional platform with Azora as our strategic partner,” said Christos Ioannou, chairman of Donkey Hotels. “Together, we are opening a new chapter with strong foundations and even stronger prospects.”
The pair will both invest further capital, and have already identified some potential acquisitions. The aim will be to provide a new way for institutional investors to access the Greek hotel market, which has historically been dominated by small, family-owned hotels. The shift will also support a general upgrade of the Greek hotel stock, which is seeing more demand for luxury properties.
In the eastern Mediterranean, Azora has become a powerhouse in the hotel sector. Launched in 2011, it has since created an investment vehicle worth more than EUR3.3 billion, having handled 106 hotels with over 26,000 rooms. Backed by partner investors, it has acquired properties, and subsequently extracted additional value from them by repositioning assets.
Rebranding is one way to enhance the value of hotels assets. Increasingly, refurbishments are also undertaken not just to improve the look and feel of a property, but also to improve its energy and operational efficiency, reducing operating costs.
Over the years, Azora has acquired, improved and then sold on a number of hotels. It counts disposals of around 60 properties and currently owns 46, with 11,600 rooms. Of the current portfolio, it holds the majority of its properties in Spain, but has added a number of hotels and resorts in Italy, and in Portugal.
Testing other European markets
In Belgium, Azora is backing a new hybrid hotel-hostel brand, LaTroupe, with a property in the centre of Brussels. And, indicative of Azora’s existing interest in the Greek market, it also owns the Sheraton hotel on the island of Rhodes, which it bought in 2022.
Javier Arus from Azora commented: “With Greece’s tourism market going from strength-to-strength, having seen almost 10% growth in international arrivals to over 36 million last year, we have been looking for the right opportunity to increase our presence in this important region. Our investment into Donkey Hotels provides us with that opportunity.”
