10 Apr Interview with Agapi Sbokou, Chief Executive Officer, and Costantza Sbokou, Chairwoman, Phāea , Greece
Greece achieved a record-breaking 33 million tourist arrivals in 2023 and anticipates another outstanding year in 2024. Additionally, the Crete Development Plan 2030 earmarked $3.8 million for tourism development on the island, signaling significant changes in the tourism landscape. As one of Crete’s most renowned luxury hospitality names, how has Phāea felt the impact of the tourism rebound and what prevailing trends, opportunities and challenges are currently observed in the market?
Costantza Sbokou: We have seen the lasting benefits that unfolded from our country’s reopening to tourism after 2020 and the pandemic, extending well into 2022 and possibly 2023. This has significantly boosted our business, evident in the rise in both arrivals and receipts from 2019 to 2023.
Agapi Sbokou: Despite shifting booking trends in key source markets like Germany and the UK, with more last-minute bookings due to various factors, including an election year in the US, we remain optimistic about 2024. Our partners and current reservations affirm this positive outlook.
How does Phāea plan to leverage this remarkable growth and meet the increasing demand expected in 2024?
Costantza Sbokou: Phāea is currently in a significant stage of growth and development. Despite a portion of our flagship property, the Blue Palace, remaining closed this summer, we’re unveiling a new boutique offering as a Cretan estate in May 2024, the Phāea Blue Palace, a member of SLH. This marks a strategic shift towards smaller luxury properties, focusing on experiential travel. We anticipate not only a record year in 2025, but also foresee continued growth in Greek luxury tourism in the years ahead. With plans for three new properties in the pipeline, including the transformation of the Blue Palace into Greece’s first Rosewood resort by 2025, we’re making substantial investments to elevate the country’s luxury market. Additionally, we’re initiating the development of a new property in the South of Crete, coinciding with the relocation of Heraklion airport in early 2027, which will enhance guest experiences and open up a previously underdeveloped region.
Furthermore, our expansion extends beyond Crete with a new greenfield property planned for the island of Milos, reflecting our vision to broaden our presence. Embracing the trend of extended stays, our future projects will feature a mixed-use component, incorporating residences alongside hotels to cater to the growing desire for longer stays in Greece, where people can enjoy the country’s beauty, culture and lifestyle while also working remotely.
Crete offers both familiarity and untapped potential. With four major tourist complexes on the island – including The Phāea Blue Palace, Cretan Malia Park, Village Heights Resort, and Koutouloufari Village Holiday Club – Phāea has built a five-decade legacy of authentic and luxury travel. How does Phāea stand out in Greece’s hospitality sector and what recent milestones highlight the company’s success?
Agapi Sbokou: Our story traces back to our father, rooted in values of respect for people, the environment and the communities, which have always been the essence of our company. Today, we retain these values while undergoing a transformation in our shareholder base, transitioning from a family business to a modern corporation with robust corporate governance. This includes addressing global warming, organizational issues, digital transformation and cultural evolution to align with our growth plans and enhanced guest experiences.
Over the past 25 years, our focus has extended beyond mere accommodation and dining; we strive to embody the spirit & authenticity of Greece in every aspect, making each member of our team an ambassador of our culture. Our exceptional leadership and dedicated staff, with high retention rates, further distinguish us in the service market.
Our name, Phāea, derived from a Homeric word meaning “the light in the eyes of the people,” reflects our commitment to bringing happiness, liberation and joy to our guests during their stay in Greece. In 2019, we initiated a rebranding effort just before the onset of Covid-19, which necessitated a pause. We are now relaunching with a refreshed approach, highlighted by the recent unveiling of our new website. This reflects our commitment to transforming our company and Greek tourism, presenting Greece in a fresh light while embracing growth opportunities beyond Crete, where our roots lie.
Our focus is on unifying our five existing hotels under the Phāea brand, transitioning from individual properties to a cohesive brand identity. This involves both renovating existing properties to align with our vision and developing new ones to complement our portfolio. One of our transformed properties, Cretan Maila Park, will soon be rebranded under the Phāea brand. This project marked a significant milestone in our journey as businesswomen, as it required a bold decision to redefine the property’s identity and target market.
Within three years of operation, we attained an EBITDA equivalent to our previous revenue, maintaining key factors unchanged. This underscores the industry’s dynamics, where key factors contribute significantly to a hotel’s revenue, typically comprising 80% of the total. We inherited a property with 200 rooms situated in an area known for high-quality mass tourism on the outskirts of Malia, an area not typically associated with luxury tourism. However, its proximity to one of Crete’s intriguing yet lesser-known archaeological sites presented untapped potential that had never been fully explored. We embarked on a holistic transformation, focusing on sustainability and guest experience. This shift yielded impressive results, including a rapid return on investment within two years, earning significant awards and recognition, including the ISO certification for Sustainable Accommodation Management. Cretan Maila Park serves as a prototype for elevating Greek tourism, demonstrating how existing properties can be revitalized to offer unique and impactful experiences.
A particular challenge faced by the tourism sector in Greece and the world is the absence of human capital. A study presented recently at the Hellenic Chamber of Hotels general assembly showed more than 53,000 positions remained unfilled at the end of 2023. What is your assessment of the level of talent and training within Greece’s hospitality segment? What gaps are we seeing in terms of skillsets?
Agapi Sbokou: Overall, we’re in a transitional stage, characterized by new development and increased demand in Greece’s tourism sector, particularly following shifts during the COVID-19 pandemic. Despite many leaving the country or moving away from tourism, we’re fortunate to have a strong local talent base in Crete, which we prioritize. Our company-wide occupancy rate is nearly 90%, a crucial metric for us.
Costantza Sbokou: Community is at the heart of what we do and one of our core values. This is evident in our commitment to support and nurture strong ties with the local community, both on- and off-site, ensuring that our employees feel deeply connected to our properties and the island, seeing themselves as an extension of our family. Rooted in our family principles, this ethos permeates through every aspect of our operation and is integral to every interaction with our guests.
To address evolving needs, especially with a new generation entering the workforce, we’re heavily investing in platforms for professional development, offering training and growth opportunities within the company. As we expand with new properties, we are committed to providing internal advancement opportunities. We’re also actively involved in training initiatives throughout Greece to enhance the tourism workforce, including reskilling and upskilling programs.
Agapi Sbokou: We are proud to have nearly equal representation of women and men, with 58% of managerial positions held by women, a unique feature within our industry. Our engagement with the local community extends beyond the workplace through various initiatives, including the Phāea Farmers Program. This initiative not only emphasizes our environmental commitment, but also promotes economic sustainability by integrating agriculture into a circular economy model. We educate and empower local farmers to cultivate organic produce, which we purchase at market price or with a premium. This fresh, sustainable produce is then served in our restaurants, providing guests with a unique culinary experience.
The initiative has been highly successful, garnering international recognition and awards for its sustainable practices. Additionally, we’re exploring ways to extend the tourist season and capitalize on guests’ interests outside of traditional tourism activities, further enriching their experience at our hotels. We offer unique experiences in our gardens and with local farmers, providing guests with insight into the origin of their food, a key aspect for discerning travelers.
Costantza Sbokou: This not only supports our employees financially, especially during the winter months when additional income is needed, but also aligns with our community values. By reconnecting people with traditional farming methods, we’re preserving an important cultural link that was at risk of being lost. Through our Phāea Farmers Initiative, we educate the community on organic agriculture, aiming to extend this knowledge throughout the island for the benefit of both the land and its people. Last year, we expanded the program to include extended family members and friends, emphasizing the importance of spreading awareness, rather than simply promoting our brand.
Through projects like the Phāea Farmers Initiative, we’ve achieved significant milestones in sustainability, including covering 85% of our olive oil and 47% of our honey needs. Our dedication to sustainability has earned us prestigious awards, including the TUI Care Foundation Sustainability Award, making us pioneers in Greece’s hospitality industry. Furthermore, we are one of only two hospitality companies in Greece to release a sustainability report according to GRI standards, demonstrating our commitment to accountability and progress in environmental impact reduction.
The hospitality industry landscape is undergoing significant transformation, driven by digital advancements and technologies that are now an integral part of the tourism industry. With the Greek government currently working under its Digital Transformation Strategy 2020 to 2025, how has the digital revolution influenced the hospitality industry in Crete and what key trends are hotel chains like Phāea adapting to stay competitive and enhance the overall guest experience?
Costantza Sbokou: We’re in the midst of a three-year transformation project, focusing on digital transformation to adapt to the evolving landscape of global tourism. As we transition from a successful family-run company to one that addresses the demands of modern tourism, we’re streamlining our operations to enhance employee satisfaction and improve day-to-day workflow. Innovation is a core value guiding our approach, influencing how we design experiences and utilize digital tools. We have established a dedicated technical team to spearhead new projects and leverage digital platforms, ensuring every aspect of our company operates efficiently and remains adaptable to our evolving needs. Collaborating with consultants, we’re customizing existing tools and developing new ones to align with our unique requirements, facilitating seamless integration across all verticals of our organization.
The US is a crucial investment partner and a substantial tourism source market for Greece. Greece expects to welcome 1 million American visitors in early 2024. How significant are American markets to Phāea and how does Phāea tailor its offerings to provide unique experiences and cultural highlights for American visitors?
Agapi Sbokou: The U.S. market has been pivotal for our flagship property, Blue Palace, as well as our other properties for the past two decades. We’ve invested heavily in this market through extensive travel, digital marketing efforts, and relationship-building initiatives such as participation in major consortia like Virtuoso and Amex FHR. We anticipate further growth in this market by catering to the sophisticated international traveler in two key ways.
Firstly, our emphasis on experiential travel resonates deeply with American visitors, offering authentic, immersive and sometimes transformative experiences. Secondly, Crete holds a special allure for American travelers as it complements well-known destinations like Santorini and Mykonos, while offering a distinct and enriching experience.
With its rich history, distinct culture, stunning beaches and culinary delights, Crete presents a gateway to Greece through the ages and encapsulates the essence of our country. Our collaboration with Starwood and Marriott has played a pivotal role in introducing Crete to the American market, establishing it as a must-visit destination. We remain committed to serving this market by continuing our collaborations and maintaining a strong presence on the island.
How would you summarize your strategic vision and goals for Phāea? What are your primary priorities for the company’s growth and success in the coming years?
Costantza Sbokou: In five years, we envision the addition of five new Phāea resorts across Greece, expanding our unique Greek luxury hospitality beyond our current island borders. Our focus is on mindful growth, aiming to showcase Greece in a new light by offering truly distinctive high-end experiences. We prioritize authenticity over mass appeal, steering clear of superficial luxury. Our goal is to provide guests with an experience that captures the essence of Greece, emphasizing high-end design and subtle expressions of luxury. Simultaneously, we are committed to leading Greece’s tourism industry in a more mindful and environmentally conscious direction. Each of our projects is meticulously designed to harmonize with its specific location, with no cookie-cutter designs. We collaborate closely with international consultants to ensure that every Phāea place is unique and engaging.
What is your final message to the readers of USA TODAY?
Costantza Sbokou: We firmly believe in Greece’s future in the hospitality industry. It is crucial to grow mindfully, learning from past mistakes to ensure our country becomes the jewel of the Mediterranean luxury market. We are committed to advancing hospitality in this direction, embracing a mindset of continuous learning and growth while making positive impacts in every location we operate.
Agapi Sbokou: Greece’s natural beauty, rich history, delicious cuisine and welcoming people are key factors that attract visitors. Leveraging these strengths, we are optimistic about Greece’s tourism prospects. Our company is strategically positioned and dedicated to creating a product that aligns with these values, and our responsibility to push the boundaries of luxury hospitality and evolve alongside our guests towards a kinder, more immersive version of travel.