Greece: New spatial plan dramatically changes the rules for hotel investments on the islands
Athens is introducing restrictive measures, limiting the capacity of new hotels in the most popular destinations and banning construction right on the coast to halt the proliferation of apartment rentals and pressure on infrastructure.
Greek tourism model, which last year reached its historic peak with a record 38 million visitors, is facing a radical turnaround. Faced with the serious consequences of mass tourism – from a chronic lack of water and congested roads to exploding rental prices – the Greek government has presented a new Special Spatial Framework for Tourism. This regulatory reform, presented by the Minister of Tourism Olga Kefalogianni and the Minister of Environment and Energy Stavros Papastavrou, has a clear goal: to stop haphazard construction and redirect investments towards more sustainable models and less saturated regions.
The end of megaprojects on overcrowded islands
The backbone of the new strategy is The division of Greece into five tourist categories based on the level of space occupancy. Within this system, destinations with the highest tourist pressure index – so-called “red zones” which include Santorini, Mykonos, Rhodes, Kos, and Corfu – receive exceptionally strict limitations.
On these islands, the capacity of new hotel developments will be strictly limited to a maximum of 100 beds per project. With this, the government aims to exclusively encourage high value-added boutique tourism and prevent further mass immigration of large hotel resorts that strain local resources.
Furthermore, the spatial plan introduces differentiated rules even within the same islands. For example, while historical centres and already saturated coastal areas will be completely off-limits to mass tourism, certain less developed municipal units on the same islands will have slightly more flexible rules, with limits of up to 350 beds, in order to encourage more even regional development.
Stricter conditions for building outside construction zones
To put an end to the phenomenon of illegal construction and fragmented buildings that mar the distinctive Greek landscape, the threshold for the minimum plot size required for building hotels outside of building zones is being drastically raised.
The previous minimum of 0.4 hectares is a thing of the past. According to the new proposal, investors will need to own land of at least eight hectares outside urban zones, and in the most critical and congested areas, up to 16 hectares, in order to obtain a building permit. In practice, this measure means that investments outside of built-up areas will become extremely expensive and reserved exclusively for environmentally conscious projects with a low building density.
Alongside these restrictions, Athens is also seriously considering the introduction of new tourist taxes for all forms of accommodation in saturated zones, and restrictions for short-term private rentals (like the Airbnb platform) are also in preparation, the capacity of which will begin to be counted towards the destination's total intake capacity.
Moving away from the sea and protection of the coastal strip
One of the most important and, for investors, most challenging items of this reform is the establishment of a protected coastal zone. The new regulation prohibits any new construction or landscaping within 25 metres of the sea line. Exceptions will be made exclusively for projects of public interest, such as emergency evacuation routes or infrastructure for access by people with disabilities.
With strict building regulations, the state is also planning measures for climate challenges, particularly the scarcity of drinking water. Therefore, within the new framework, obligations to use seawater for hotel swimming pools on the islands are also foreseen so as to relieve already vulnerable local water supply systems.
This historic reform should come into effect at the end of June, after it has gone through a public consultation phase. This is a clear sign that the focus must finally shift from quantity and the mere counting of arrivals to capacity management, ecological sustainability, and the development of selective forms of tourism in the country's interior.
