Thanos Michaelides on improved tourism, Amyth hotels expansion and new partnerships

Increased visitor interest and an improvement in demand, which may bring better results in terms of hotel occupancy and, by extension, income, are anticipated by Thanos Hotels & Resorts CEO Thanos Michaelides.

He also, however, clarified that attention also remains constantly focused on geopolitical developments and the course of the British economy, the possible downward trends of which would negatively affect the tourism industry.

In an interview as part of the IN Business Forecasting 2025 series, Michaelides pointed out that one way to strengthen small family-run hotel units that are struggling to adequately cope with these challenges, is to join forces in order to create an advantage of scale and have access to new technologies, although in practice such mergers are very difficult.

He foresees, however, the achievement of more acquisitions and the separation of ownership of the units from their management, explaining that with such separation, the family business retains ownership of the property but cedes management to specialised hotel management companies.

The CEO of Thanos Hotels is looking forward to the expansion of Amyth hotels, a new brand that so far includes two units in Greece and one in Cyprus, and foresees great prospects for the expansion of hotel units in the Greek market, where hotel owners with the appropriate profile can integrate their hotels into Amyth.

At the same time, Thanos Hospitality Services, the group's company that provides consulting and hotel management services and which has already undertaken two major projects (the Berengaria Hotel in Prodromos and the Palm Beach Resort in Larnaca), is also in discussions to create new partnerships.

How do you think the Cypriot economy will perform in the new year? How optimistic are you about its prospects?

The growth rate of the Cypriot economy was 2.5% in 2023 and 3.8% in 2024. This upward trend seems likely to continue in 2025. Here, I would like to add that the direct contribution of tourism, which corresponds to approximately 9% of GDP, along with the tourism multiplier, which includes trade and transport and corresponds to approximately 22% of GDP, has shown an upward trend in recent years with quite good performance.

Despite the continuous increase in operating expenses, as well as the recent upward trend in interest rates, arrivals and revenues from tourism contributed greatly to the steady growth trajectory of the Cypriot economy.

I believe that the Cypriot economy is able to face the challenges and will prove to be quite resilient and flexible in the new year.

Who do you consider to be the biggest risks to the country's economy? What should be taken into consideration in order to ensure its growth trajectory?

There are various risks that can negatively affect our country's economy. The most serious risk is geopolitical turmoil in the wider region of Cyprus. The outlook for the Cypriot economy is always highly dependent on geopolitical developments, as recently demonstrated by the crisis in the Middle East and the Russia-Ukraine war.

These external factors cannot be controlled by us, which is why we must take into account in our planning the possibility of challenges being created by unexpected events.

The pace of the development and modernisation of the economy must necessarily keep pace with the pace of competitive economies. The business environment must support and encourage private entrepreneurial initiative, because this is the driving force of the economy. Flexibility and proper planning are needed on th side of the state and the business sector, so that we are able to adapt to the trends of the global economy that are moving at a very fast pace.

For example, technology is developing at an extremely rapid pace and the application of advanced technology is of great importance to the country's economy. The added value and comparative advantage that the application of advanced technology brings is what now differentiates the economies of countries.

In order to cope with and adopt new trends in technology, we need a skilled workforce and a properly adapted educational system that will be capable of training young professionals.

Optimism for arrivals and occupancy in 2025

What should Cyprus do to become an even more attractive destination for foreign investments? And how important, in your opinion, are they to its economy?

The legal and banking framework must operate in a way that gives Cyprus an advantage. The speed of dispute resolution and the processing of financial transactions are crucial elements in making the country attractive to investors. The tax framework must be supportive, providing substantial advantages over other destinations.

It should be noted here that the differences/discrimination that exist between companies of foreign and Cypriot interests create inequality in the economy and can be an inhibiting factor in attracting foreign investment.

If there are common tax frameworks then mergers and partnerships will be more desirable, as inequality creates unfair competition. The adequacy of the workforce is equally important for attracting investment. We need to have very fast procedures to enable businesses to staff themselves in a timely manner according to their needs.

Regarding your company's sector of activity, how do you anticipate it will develop in 2025? Are there any issues that concern you?

We expect 2025 to be better than 2024. The information we have from the main markets is that there will be increased visitor interest. We do not expect major deviations compared to 2024.

However, any improvement in demand will bring about better results in terms of hotel occupancy and, by extension, revenues. Depending on how the cost of operating expenses will fluctuate in 2025 and assuming that the downward trend in interest rates continues, there is a possibility of increased profitability.

We should continue to closely monitor geopolitical developments and the course of the British economy, any downward trends of which will negatively affect the tourism industry.

Acquisitions and separations of ownership from management

What are the biggest trends/changes you expect to occur in your sector of activity and what are the most significant challenges?

The phenomenon of visitors booking their holidays closer to their arrival date and creating their own “tourist package” will continue. Visitors now manage their own holiday schedule and seek more authentic and complex experiences.

At the same time, we see technology, and specifically the application of artificial intelligence, being integrated into the everyday lives of businesses and consumers.

I believe that the most important challenge we may face is failing to adapt the Cypriot tourism product based on the direction in which our potential visitor is moving.

A strong trend that seems to be taking hold in Cypriot business is that of acquisitions and mergers. Will we see it strongly in your sector as well?

The hotel industry in Cyprus, as in the rest of Southern Europe, is very fragmented. There are numerous individual hoteliers and a multitude of small family-run hotel businesses. Due to the rapid changes and developments in the market, small family units find it difficult to adequately cope with the challenges.

One way to strengthen these units is to join forces so that they can create economies of scale and access new technologies. In practice, of course, such mergers are quite difficult.

I foresee more acquisitions and separations of ownership of the units from management. With the separation, the family business retains ownership of the property and cedes management to specialised hotel management companies.

This business model is more likely to bring better property returns and long-term success to the owner/investor.

Amyth expansion and new collaborations in the works

What can we expect in terms of your organisation's plans and development strategy in 2025? What moves do you intend to make in this direction?

We are generally active in the 5-star hotel market segment with a very specific guest profile. We look forward to the expansion of Amyth hotels, a new brand that currently includes two units in Greece and one in Cyprus.

The Amyth model is multidimensional, as it can include hotels operating under the lease or management arrangement model and belonging to our group. There is a great prospect of expanding Amyth hotels in Greece, where hotel owners with a similar profile can integrate their hotels into Amyth.

At the same time, we are working at our group company that provides consulting and hotel management services (Thanos Hospitality Services) with two projects that we have already undertaken (the Berengaria Hotel in Prodromos and the Palm Beach Resort in Larnaca), while we are in discussions about creating new partnerships.

(Source: InBusinessNews)