Christopher Egleton is Executive Chairman of Minion Group Plc, a fast-growing AIM-listed Travel and Leisure company, which is in the process of developing a major new resort on the north eastern coast of Crete. He explains in more detail the challenges that Greek’s tourist sector faces but also the excellent opportunities for the sector as Greece returns to growth.
After six years of recession, Greece’s economy is finally showing signs of life. The EU is forecasting a welcome return to growth, of some 0.6% in GDP for 2014. One key contributor to the economic revival has been the travel and tourism industry. Tourist numbers are up and demand is growing again.
If Greece meets the 2021 target of 24 million tourists a year it would contribute significantly to GDP and create around 300,000 jobs. However, the tourism sector needs to overcome two key challenges, upgrading its infrastructure and attracting more high-end tourists, if the industry is to play a fuller role and help accelerate the country’s economic recovery.
The surge in Greece’s tourism sector this season surprised even industry experts. A total of 21 million tourists are expected to visit Greece this year, almost double the country’s population, and room revenue is already up substantially on last year. A large proportion of these visitors came and left within a period of 90 days, the peak holiday season.
However, while the number of holidaymakers coming to Greece has boomed, their spending has not. And hotels are full to capacity in the months July—September, but suffer a dearth of guests during the colder months.
17.9 million Tourists came to Greece in 2013, generating €13 billion in revenue. Yet spending per head was down 1.9% on the previous year. This year, the Association of Greek Tourism Enterprises (SETE) expects spending per head to show a ‘modest’ increase from 650 euros in 2013 to 700 this year. In 2000, by contrast, the average spend per capita was 813 euros.
In a recent report, Directions for Economic Recovery in Greece, laying down practical steps to accelerate Greece’s recovery, PwC Greece singles out tourism and infrastructure as the areas on which there should be greater focus. ‘These areas,’ the report says, ‘have the potential to increase national income through high economic multipliers.’ Tourism has a multiplier of 2x and will increase demand for an array of sectors, including restaurant and catering services, transport and construction industries.
For these multipliers to be generated, Greece would benefit from having more integrated resorts and specialised resorts – hotels and complexes based on thermal tourism or maritime tourism, for example, or which take advantage of their location in such a way as to offer unique attractions. It is by upgrading the quality of rooms and facilities, and offering particular attractions, that Greece’s holiday industry can attract more high-end tourists and help to boost their spending.
Already new hotels have been built and are being maintained by international management chains and the Greeks in turn are recognising the benefits of this foreign interest. Foreign capital is funding many of these developments: about half of the hotels and resorts planned are financed by foreign private-equity companies who are also looking at major residential developments where returns are high.
The Greek government’s decision in 2013 to grant residency to owners of property worth in excess of €250,000 has attracted further foreign investment from those keen for a point of entry into the European Union. Given that experts anticipate Greece will need to spend €3.3 billion annually to meet tourism targets, predominantly on infrastructure, the time is right for foreign public/private investment.
These luxury and residential holiday developments target the top end of the international tourism market, known as ‘ultra-high net worth individuals’ – individuals with a net worth of at least $30 million. This market is currently growing: the number of high network individuals has increased 6.3% since 2012 and has a combined wealth of $27.8 trillion.
At Minoan, we hope to set an example with our resort planned for the Cavo Sidero peninsula on Crete’s north eastern coastline. Our resort will include a number of small- to medium-sized hotels, each of which will fall into the five- and six-star category. The variety of facilities offered, including a heathland golf course, and the quality of accommodation, will ensure that the site attracts, among its clientele, the highest-paying tourists and visitors to Greece.
Our confidence in the project is based on its integration with the Cretan landscape and population. The golf course, cultural tours and other attractions fit in with our intention to create a resort which will function all year-round.
Our Cavo Sidero development is founded on principles of sustainability and generating income in the long-term. The project will create 1,200 sustainable jobs, and a further 500 during the construction period, making it a reliable employer and generator of revenues for the locality and for Greece. The resort aims to preserve the local landscape: while the site will take up 6000 acres, more than 90% of the space will be left in its natural state, and the resort will have a built footprint of only 0.5%.
Construction work should begin within the next twelve months, now that the project has been approved by the government’s Fast Track programme, which is intended to speed up approval of foreign direct investments considered as strategic projects of particular benefit to Greece.
As Greece’s future within the Eurozone looks more secure, the country must rebalance its tourism industry towards the luxury and residential holiday markets, whilst retaining its mass market appeal. If the industry can extend the holiday season by focusing on its cultural attractions as much as its excellent coasts, islands and beaches then it could play an even more important role in Greece’s gathering recovery.
Robinhood plans confidential IPO filing as soon as March – Bloomberg News
(Reuters) – Online brokerage Robinhood, at the centre of this year’s retail trading frenzy, is planning to file confidentially for an initial public offering as soon as March, Bloomberg News reported late on Friday, citing sources.
The California-based brokerage has held talks in the past week with underwriters about moving forward with a filing within weeks, Bloomberg said.
Robinhood did not immediately respond to a request for comment.
Reuters reported last year that Robinhood has picked Goldman Sachs Group Inc to lead preparations for an initial public offering which could value it at more than $20 billion.
Robinhood was at the heart of a mania that gripped retail investors in late January following calls on Reddit thread WallStreetBets to trade certain stocks that were being heavily shorted by hedge funds.
The online brokerage tapped around $3.4 billion in funding after its finances were strained due to the massive trading in shares of companies such as GameStop Corp.
(Reporting by Ann Maria Shibu in Bengaluru; editing by Richard Pullin)
Analysis: How idled car factories super-charged a push for U.S. chip subsidies
By Stephen Nellis
(Reuters) – When President Joe Biden on Wednesday stood at a lectern holding a microchip and pledged to support $37 billion in federal subsidies for American semiconductor manufacturing, it marked a political breakthrough that happened much more quickly than industry insiders had expected.
For years, chip industry executives and U.S. government officials have been concerned about the slow drift of costly chip factories to Taiwan and Korea. While major American companies such as Qualcomm Inc and Nvidia Corp dominate their fields, they depend on factories abroad to build the chips they design.
As tensions with China heated up last year, U.S. lawmakers authorized manufacturing subsidies as part of an annual military spending bill due to concerns that depending on foreign factories for advanced chips posed national security risks. Yet funding for the subsidies was not guaranteed.
Then came the auto-chip crunch. Ford Motor Co said a lack of chips could slash a fifth of its first-quarter production and General Motors Co cut output across North America.
“It brings home very clearly the message that the semiconductor is really a critical component in a lot of the end products we take for granted,” said Mike Rosa, head of strategic and technical marketing for a group within semiconductor manufacturing toolmaker Applied Materials Inc that sells tools to automotive chip factories.
Within weeks, automakers joined chip companies calling for chip factory subsidies, and U.S. Senate Majority Leader Chuck Schumer and President Biden both pledged to fight for funding.
Industry backers now aim to be part of a package of legislation to counter China that Schumer hopes to bring to the Senate floor this spring. Still, all agree it will do little to solve the immediate auto-chip problem.
Headlines about idled car plants resonated with the public that had shrugged off abstract warnings in the past, said Jim Lewis, a senior fellow at the Center for Strategic and International Studies. Lawmakers, already worried that a promised infrastructure bill will not materialize this year, decided to push for quick solution.
“Nobody wants to be seen as soft on China. No one wants to tell the Ford workers in their district, ‘Sorry, can’t help,'” Lewis said. “It was one of those moments where everything aligned.”
The package includes matching funds for state and local chip-plant subsidies, a provision likely to heat up competition among states including Texas and Arizona to host big new chip plants that can cost as much as $20 billion.
The subsidies could benefit a factory in Arizona proposed by Taiwan Semiconductor Manufacturing Co and one in Texas eyed by Samsung Electronics Co Ltd, even though those factories would be geared toward high-end chips for smartphones and laptops, rather than simpler auto chips. And those factories would not come on line until 2023 or 2024, according to plans disclosed by the companies, the world’s two largest chip manufacturers.
In the longer term, a raft of U.S. companies are also poised to benefit. Any chipmakers that build factories will source many tools from American companies such as Applied, Lam Research Corp and KLA Corp.
Intel Corp, Micron Technology Inc and GlobalFoundries – which already have U.S. factory networks – will also likely benefit.
Smaller, specialty chip factories also could benefit.
“The recent chip shortage in the automotive industry has highlighted the need to strengthen the microelectronics supply chain in the U.S.,” said Thomas Sonderman, chief executive of SkyWater Technology, a Minnesota-based chipmaker that makes automotive and defense chips. “We believe that SkyWater is uniquely positioned due to our differentiated business model and status as a U.S.- owned and U.S.- operated pure play semiconductor contract manufacturer.”
Even with subsidies, the U.S. companies still must compete with low-cost Asian vendors over the long run, and the immediate auto chip troubles will probably persist.
Surya Iyer, a vice president at Minnesota-based Polar Semiconductor, which makes chips for automakers, said his factory is booked beyond capacity and has started to speed some orders up while slowing others down, to meet automakers’ needs as best it can.
“We are expecting this level of demand to continue at least for the next 12 months, maybe even longer,” he said.
(This story has been refiled to add attribution to quote in paragraph 9, add dropped words in paragraphs 10 and 17)
(Reporting by Stephen Nellis and Hyunjoo Jin in San Francisco and Alexandra Alper in Washington. Editing by Jonathan Weber and David Gregorio)
Atlantia disappointed with CDP bid for unit, continues talks
By Francesca Landini and Stephen Jewkes
MILAN (Reuters) – Italy’s Atlantia said on Friday an offer by a consortium of investors led by state lender CDP for its 88% stake in Autostrade per l’Italia fell short of the mark and asked its top managers to see if the bid could be sweetened.
“The offer falls below expectations,” the Italian infrastructure group said in a statement, adding it had mandated the chief executive and the chairman to assess “the potential for the necessary substantial improvements” to the bid.
Italian state lender CDP, together with co-investors Macquarie and Blackstone, has presented a proposal valuing all of Autostrade per l’Italia at 9.1 billion euros ($11 billion).
The consortium also requested Atlantia guarantee up to 700 million euros in potential damage claims and another roughly 800 million euros for a pending legal case, making the bid less attractive than previously expected.
One source said the consortium estimated overall pending legal claims against Autostrade at 3 billion to 4 billion euros, adding the 700 million euro cap did not mean the amount would be detracted from the offer price from the start.
Earlier on Friday Atlantia’s minority investors TCI and Spinecap had called on Atlantia’s board to reject the offer, saying it undervalued the asset.
“No deal is better than a bad deal, especially a bad deal and a wrong price,” TCI Advisory Services partner Jonathan Amouyal said in a emailed comment to Reuters.
TCI, which holds an indirect stake of around 10% in Atlantia, repeated that the value for 100% of Autostrade should be no less than 12.5 billion euros.
The board will hold a further meeting in order to take a final decision on the offer in due time, Atlantia said.
The negotiations between Atlantia and the CDP-led consortium are part of an effort to end a political dispute over Autostrade’s motorway concession triggered by the collapse of a motorway bridge run by the unit.
(GRAPHIC – Atlantia share performance: https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqggjdpx/image-1614331237501.png)
The bid expires on March 16, but the deadline could be extended in case Atlantia calls an extraordinary shareholders meeting (EGM) on the issue, according to one source with knowledge of the matter.
Shares in the group ended down 0,7%, after recovering some losses, as investors waited for the decision of the board.
Atlantia, which is controlled by the Benetton family, owns 88% of Autostrade, with Germany’s Allianz and funds DIF, EDF Invest and China’s Silk Road Fund holding the rest.
The group also kept open an alternative plan to demerge and sell its stake in Autostrade per l’Italia unit and called an EGM on March 29 to extend to end-July a deadline for offers for the demerged stake.
(Additional reporting by Stefano Bernabei, editing by Louise Heavens and Steve Orlofsky)
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