Financing options to support GHG reductions in Cypriot and Greek hotels

Tourism represents one of the most important economic sectors both for Greece and for Cyprus, with a gross domestic product (GDP) direct contribution amounting to 10.3 percent and 22.3 percent respectively in 2017. Touristic activities have increased during the previous years, with Greece having welcomed about 30 million tourists in 2018. Despite the benefits, this development results in higher energy demand and consequently, in growing greenhouse gas (GHG) emissions generated by the hotel industry. One of the main barriers for upscaling GHG reduction measures is the lack of adequate financing structures and instruments.

This report aims to identify the main existing financial instruments as well as reward and advisory schemes for the hotel sector in Europe and in the participating countries of the Hotels4Climate project (i.e. Cyprus, Greece and Germany) and, consequently, to highlight the gap that is not covered by programmes yet. Some countries that have recognised the importance of increased energy efficiency and reduced GHG emissions in the tourism sector have started implementing targeted instruments which are presented in this report. Based on this assessment, obstacles such as lack of commercial bank experience in financing energy efficiency and renewable energy projects and lack of technical capacities and awareness for assessing energy consumption and conducting energy audits, are identified that hinder the widespread promotion of projects aimed at reducing GHG emissions in the hotel sector. Finally, opportunities to tap GHG saving potentials as well as recommendations for financing models for the Cypriot and Greek context are discussed. Recommended components entail tax incentives, targeted grant schemes and subsidised green certification, underpinned by technical assistance and capacity building measures, with a particular focus on small and medium-sized hotels.