(Bloomberg) -- If more evidence was needed that Greece has come roaring back, the country’s biggest initial public offering in more than two decades has provided just that. 

Investor interest in the sale of a 30% stake in Greece’s main tourist gateway, the Athens International Airport, was so great that demand exceeded the deal size just hours after the books opened. The state raised 784.7 million euros ($854 million) through the sale of its holding in the 23-year-old airport, known as Eleftherios Venizelos, with the IPO priced on Friday at €8.2 a share, the high end of the range.

“It’s a landmark transaction for Greece,” said Thanassis Drogossis, head of investment banking at Pantelakis Securities SA. “It’s a quality asset that enhances the reach of the Greek capital markets by attracting new classes of investors and serves a proxy for Greek tourism, the heavyweight industry of the country.”

Coming on the heels this week of Greece’s first new bond sale since it regained investment grade status — 10-year debt that attracted €35 billion in orders, the most ever — the blockbuster IPO is one more marker bolstering Prime Minister Kyriakos Mitsotakis since his reelection in June. Greece’s economy outperformed most of its European peers last year, making the country’s financial crisis more than 10 years ago a distant memory. 

Greece’s most significant IPO since 2000 will help the country’s largest airport expand as tourist arrivals set new records. The Athens airport, which connects Greece with 155 cities worldwide, handled more than 28 million passengers in 2023 — a 24% increase from the previous year. About 19 million of them came from overseas, showing its central role in Greece’s crucial tourism sector. As of November, Greece had welcomed about 32 million visitors overall from other countries.

“Athens Airport’s entry on the stock market is one of the components to help it proceed with its investment activity, aiming to increase its capacity,” said Elias Kikilias, the general manager of the Institute of the Greek Tourism Confederation, or INSETE. “The outlook for the airport is very positive and it’s linked to the wider outlook for tourism, which is also very good.”

Greece’s tourism sector, which accounts for around 25% of the economy, hit another record last year. Revenue from overseas tourists reached €20 billion at the end of November, over 15% higher than in 2022 and almost 13% more than the same period in 2019, just before the pandemic. Early indicators show that 2024 will also be a very good year, with scheduled airline bookings for February 18% higher than the same month last year and up 14% for March, according to Kikilias. 

In many ways, the Athens Airport is more than just an area for arriving and departing passengers since “it controls a broader area around the terminal with a hotel, exhibition spaces and large shopping malls,” Kikilias said. That means it effectively serves an area with almost 6 million inhabitants, more than half Greece’s population. 

The airport is planning a three-phase expansion that aims to increase the terminal’s capacity to 50 million passengers by 2046. That includes an extension of the central terminal, a new parking runway for 32 aircraft, a new VIP terminal and a multi-storey parking lot. 

In the last five years, the airport has added 69 new destinations to its network and developed partnerships with 32 new airlines, making it the 9th busiest in Europe, according to OAG’s Megahubs 2023 ranking.

The expansions and improvement plans come as some frequent travelers complain that Eleftherios Venizelos is something of a “cookie cutter airport, with nothing special.” 

“For a long time I’ve thought its services were expensive and I’m not impressed by the drop-off charges or its short-time limit,” said Myriam Fotou, who uses the airport to fly between Athens and London, adding that the airport is “very much what anthropologist Marc Auge calls a ‘non-place’.”

The airport has been working on changing that. 

Arriving visitors making a long trip to Greece to head to one of the country’s famed beaches, smell its fresh air, feel the sun on their faces and soft sand between their toes are greeted with just that at the airport — virtually, that is. A huge interactive video-wall on the way to the airport’s baggage claims area carries realistic-looking waves gently tumbling on the floor, making a soothing sound and transporting the visitor to a beach.

Now, the airport might be able to make the visitor experience even richer.

--With assistance from Gina Turner.

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