08 Apr Interview with Panos Paleologos, Founder and President, HotelBrain Group
HotelBrain expanded gradually since it was founded in 2000 to become Greece’s largest hospitality management company. As of March, the company had hotels in 39 destinations in Greece, including hotspots like Crete, Mykonos, and Santorini. To start can you give our readers an overview of the company’s current assets and responsibilities? What role does HotelBrain play in Greek’s hospitality sector?
HotelBrain was founded in 2000 in Santorini, the first to introduce the hotel management business model to the Greek market. The model was already established in the hospitality industry abroad by the top international hotel brands. Our differentiation from their model has been that the hotels were added to our portfolio as white labeled, meaning we were helping family-owned hotels to maintain international standards while retaining their own brand.Soon after launching the business in Santorini, we expanded our operations to Mykonos and other popular summer destinations all over in Greece. In 2009 we moved our headquarters to Athens to centralize operations.
When the Greek Economic Crisis happened in 2009, the banks were asking the hotel owners for guarantees on their loans. During this difficult time, we came up with a business idea that would support the local hoteliers, who didn’t want to operate their hotel or have its financial responsibility. The idea was that we would not own their asset, but we would own a company that operates it, so we would become a hotelier by leasing a hotel.
We therefore started looking for funding to support our new business plan, founded in 2014 through Southbridge EIF (European Investment Fund). In 2015 we rented our first property and soon became the largest hotelier in the country. Currently we have 104 properties under lease.
Our business is diversified as our hotel portfolio includes properties all over Greece as well as different types of accommodation, from all-inclusive to boutique and from 3-star to 5-star hotels. This diversification adds complexity to our business, but it also makes it interesting and fascinating.
Our philosophy is to do as much as we can centrally at our headquarters, where we currently employe more than 200 people. Operations like supplies, accounting, cash flows, payroll, marketing, sales, contracting, technical and legal work are performed centrally. However, our people working at the hotels are doing the most difficult job, which is to keep our guests satisfied.
In 2023 our net revenue exceeded €100 million while employing 2,400 people. This year we are planning to increase our seasonal employees’ number to 3,000. We anticipate that we will be operating 110 properties by summer 2024.
How does HotelBrain stand out in the hospitality industry? What would you say are its unique qualities that have allowed it to continuously win awards?
When we are onboarding new hotels, we retain their brand attributes. We don’t aim to have a unified brand across all our hotels; we believe that is impossible since they are highly diversified. We don’t have common group standards but individual hotel standards. For example, for the 3-star hotels we aim to keep them clean, provide delicious food and offer high quality service according to the category, location, and star rating. We operate all our hotels with dignity, honesty, and passion. Award winning was a result of this effort. We are proud to be World’s Leading Hotel Management Company and Greece’s Leading Hotel Management Company for 2020 at the 27th World Travel Awards (WTA).
Greece hit a record year in tourism in 2023, with the period between January and August 2023 seeing a 12.4% rise from the previous year. However, global tourism is seeing some challenges related to over-tourism, including lack of staff and inflationary pressures. In July a new tourism strategy was designed and outlined for Greece focused on sustainable tourism and diversification. Tell me a little bit about how the tourism rebound, and these latest trends are translating at HotelBrain’s level? What effect have you seen from the rebound of tourism?
Tourism rebounded after Covid but everything has changed. I feel that we now live in a world that cares more. People are traveling again and want to have new experiences, but they are striving for authenticity. We are trying as a country to be more sustainable, and personally, I support this decision. Greece is a country with beautiful nature, character, and heritage, it offers unique colors, aromas, and sounds. We need to maintain this uniqueness. This will be the key to success. We must propose destinations in Greece that are probably less popular but can provide outstanding and authentic Greek experiences to international guests.
How has the turmoil in the Middle East and Ukraine impacted the wider region’s macroeconomic situation?
Changes in the global environment affect tourism, which is a very sensitive industry. However, Greece’s strongest point is that there is a wide range of nationalities visiting it, therefore we do not depend only on a certain nation travelling to our country. Greece attracts guests from all social levels as there is infrastructure to accommodate all of them, from all-inclusive properties and luxury hotels to family-owned boutique hotels. Greece offers everything while striving to respect nature and our beautiful landscape. Because of these attributes we have managed to overcome all the geopolitical difficulties. Any conflict between countries affects our potential guests. We have managed to continue our operations without being overly affected and hope to continue to do so in the future.
In March HotelBrain announced a growth strategy targeting more than 20,000 rooms managed by the company by 2028. The plan involves upgrading services through new strategic partnerships. Can you tell us what are you planning in 2024 to consolidate your presence in the Greek market?
We are on track to hit our target of 9,000 rooms under management for 2024. As part of our development, we will be focusing on the activities that guests can experience while on holiday. The hotels’ offering in the past consisted of a nice clean room, probably breakfast, lunch, dinner, a pool, and most likely a beach. Nowadays tourists want to experience the country’s cuisine, listen to the music and live like a local, so we are offering them this opportunity by presenting them with activities only available at the destination they are visiting. However, as this cannot be done by us directly, we propose to select only the best activities to offer to them. If we achieve this, the guests’ satisfaction in the hotel will also increase. The government will be introducing a new sustainability scheme that will promote local communities as well as preserve the environment.
What kind of efforts has HotelBrain put into marketing its product in Greece and the region? What marketing strategies is the group using considering the growing competition in the market?
We don’t have a common brand, so we have a different marketing strategy per hotel depending on their size, the attributes of the guests and others. Therefore, we create different marketing strategies for each hotel. Some hotels are operating with 80% of their business coming from B2B tour operators and that plays a significant role in the marketing strategy. Individuality makes things more difficult as each hotel stands by itself yet must have the feeling that it is a hotel of the world. We are operating in an international environment, and we must compete with others that are offering similar products in other countries with different cultures. This is the marketing strategy: one marketing strategy per hotel. While marketing executions are mostly online these days, we believe everything is important: word of mouth, press, or social media; everything counts.
One of the big issues in this sector is the question of talent. Everybody has been struggling to recruit, retain, and retrain talent. Greece has also been suffering from a “brain drain” these past couple of years, so tell me a little bit about how you are coping with the issue of talent finding and training in the group.
We launched the HotelBrain Academy in 2023 precisely because we found it to be a significant problem, especially after the Covid period, that hospitality professionals had left the industry and most of them decided not to return. We took matters into our own hands and created this academy to attract new people to the industry and also develop the skills of those already working in it, enabling them to obtain higher positions and develop their careers. HotelBrain Academy aims to attract new talent and give them the right mindset and ethos to work in the hospitality sector. 200 people will receive a certificate after attending our programs and we hope they will be the new generation of employees in our hotels, making an impact and taking things forward.
The problem of finding and training new talent affects the industry worldwide, but I am hopeful things will change in the future. Hospitality is a very strong part of the Greek economy and is a great sector to be in. Greeks have always been professional and organized in a way that offers the best experience for their guests.
Another issue in the tourism industry is the rise towards more sustainability with a goal of achieving net zero carbon emissions. Unfortunately, the tourism sector is still quite a big producer of carbon emissions, so what sort of new eco-friendly initiatives has HotelBrain introduced in Greece, both in its hotels and in its internal operations as well?
We are always onboarding government sustainability schemes across our hotels, becoming more eco-friendly by using solar energy and reducing waste. We work with sustainability focused catering services for our hotels to reduce waste and are careful about water waste and the use of plastic, among other things.
The environment has been damaged already, so for us sustainability is something that needs action now. We are careful about our carbon footprint and waste and enact new policies annually to reduce it. This is a need, not only for the planet but for business itself as tourists are increasingly taking sustainability into consideration, which makes us even more aware of our actions.
The USA and Greece are longtime partners, particularly in tourism. It was expected at the beginning of this year that Greece would welcome more than 1 million travelers from the USA. HotelBrain is partnered with many US hotel giants, including Radisson. Tell me how substantial are the company’s partnerships with US hotel companies, and why has HotelBrain been so successful with its US partners?
There was always a strong bond between the US and Greece. Historically, American tourists have always visited our country, so we know how to serve them well. In the past, I have operated hotels where 80% of the clientele was from the US. Traditionally Americans visit the islands of Mykonos and Santorini. They have high standards and are looking for value for money, but they are highly positive people and enjoy themselves very much in our country, which we respect greatly.
As a hospitality group we admire the way our counterparts in the US operate, but sometimes find it difficult to apply the same approaches. Greece was full of family owned and run properties that were passionate about hospitality but didn’t have the top-shelf standards that tourists require these days. There is no better way to achieve these than through the “Americanization” of the product. Each property we join with American companies must apply to the international hospitality standards, something we achieve through high supervision and training of our staff and operations. This has been a big part of our success.
What kind of opportunities are now available in Greece’s hospitality sector for foreign and US investors?
I think there are great opportunities when it comes to real estate in Greece, and we are receptive to international investors. The comeback of the Greek economy is a message to all investors that Greece is the land of opportunity for long term investments. Greece, as a part of EU and NATO, maintains stability in the Balkans and South-East Europe and operates in respect to their values.
Greece’s tourism package is recently seeing a boost with new infrastructure projects such as the Ellinikon project and the Athens Riviera. Investments are now being spent on diversifying the country’s offerings and making it a year-round destination. How are the country’s efforts to evolve its tourism package creating a more comprehensive destination?
Changing travelers’ perception and making Greece a year-round destination is not easy and requires cooperation between the industry and the public sector. We support this change because it acts in everyone’s benefit. Greece has the potential to succeed, due to the great weather and infrastructure, as well as air connections with Europe and the rest of the world.
You’ve been an inspirational leader in Greece’s hospitality sector for two decades and have successfully grown your company beyond a turnover of €100 million. What are your current top personal priorities as President of HotelBrain group?
I feel a sense of duty and responsibility toward our employees, for the Greek tourism industry and obviously the guests that have chosen our hotels every season. Our company will continue to grow by keeping our promises to all of them respectively.
What would be your final message to the readers of USA Today?
Greece is among the best destinations that Europe has to offer. The country’s predominant industry has always been tourism and now that industry is transforming. Greece is a country with history, culture, natural beauty and a workforce that are passionate and ready to offer their services.