Greece's hospitality sector has legal requirements of its own that are not exhausted by property law. A hotel is at once a piece of real estate and a regulated business activity: it is subject to a specific licensing and operating regime, it employs staff who may be affected by the transfer-of-undertakings rules, and it often operates under a management or franchise agreement with an international hotel group. Buying, selling or developing a hotel therefore requires all of these questions to be examined in parallel, and not only the title to the property and the charges over it.
The legal review of a hotel property goes well beyond title and encumbrances. A hotel and hospitality lawyer examines, among other things, the hotel's category, its operating status, any existing management or franchise agreements and in particular the change-of-control, transfer and termination clauses. Where the transaction involves the transfer of the hotel business, we also examine the questions affecting staff and the application of the Greek transfer-of-undertakings rules. Overlooking any one of these can create problems with licensing, with the operation of the hotel or with the contractual relationship with the operator after the transaction has closed.
A hotel transaction is at once a real estate deal, a regulated business activity and, often, a contractual relationship with an international hotel group. Management and franchise agreements add a significant commercial dimension to the transaction, beyond the legal review of the property and its licensing.
The short-term rental framework in Greece has also developed significantly in recent years. Airbnb and other short-term lettings are subject to specific registration, tax compliance and operating requirements, while additional restrictions on new registrations apply in certain areas. For owners and operators, assessing the framework in force matters particularly before starting or changing the activity. The same applies to investors considering the development of a hotel, serviced apartments or other tourism property, who need to choose the right operating model from the outset.
A Separate Licensing Framework
Licensing is a critical part of due diligence
The licensing and classification of a hotel are governed by a dedicated regulatory framework and are not simply an extension of the property review. Gaps in licensing or classification can affect the operation, the transfer and the commercial exploitation of the hotel property.
Get the terms right
Management agreements need careful negotiation
Agreements between owner and operator, and international hotel management contracts, determine how the hotel is run, how revenue is shared, who controls the business and what the termination rights are — and they can materially affect the value of the hotel property well after the transaction has closed.
Moving target
The Airbnb framework keeps changing
The short-term rental framework in Greece has tightened in recent years, with specific restrictions applying in certain areas. A strategy that was compliant a few years ago is not necessarily appropriate today.
Separate regime
A hotel transfer also has an employment dimension
The Greek transfer-of-undertakings rules can affect staff and existing employment relationships. Those issues therefore need to be checked before completion and addressed in the purchase agreement.