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Hospitality Groups Dive into the Local Accommodation Business

5 November 2018

The growth of the local accommodation market has attracted the attention of large hotel groups. Marriott, Accor and Mystic Invest are all investing in the sector.

The local accommodation market is no longer just the preserve of small property holders. The exponential growth the market has not failed to attract the attention of the world’s hospitality groups. As the saying goes, if you can’t beat ‘em, join ‘em. Marriott, the largest hotel chain in the world, just launched Hostmaker in Lisbon and is assessing whether it should expand the business to other cities and regions of Portugal. The French group Accor also currently operates a portfolio of more than 10,000 luxury properties in the world, some of which in Portugal.

Portuguese hospitality groups are also beginning to take a serious look at the growing niche market. The Mystic Invest group, which is owned by the executive Mário Ferreira, acquired two buildings in the historic centre of Porto, for an undisclosed amount, and is in the process of renovating them for use in the temporary housing market. The two properties will become home to eleven flats, of which five will be used as temporary local accommodations, and the rest sold or placed in the long-term rental market. This is Mário Ferreira’s first investment in local accommodations. The executive stated that he wanted to “diversify [the company’s] portfolio of projects,” centred on cruises and traditional hospitality. The company will spend a million euros on the renovations (the cost of the asset stood in the upper “hundreds of thousands”). Construction will be completed next summer.

Vila Galé took a different tack. The Rebelo de Almeida family-owned group decided to include a tourist-based real estate component in its hotel Vila Galé Sintra – Resort Hotel project, which has been in operation since last April. According to Gonçalo Rebelo de Almeida, 48 two and three-bedroom flats are currently on sale, adding that “the principal advantage and factor that makes our product different is that the owners can, for an additional sum, enjoy the five-star hotel’s facilities.”

The local accommodation market isn’t just attracting hospitality groups. Paulo Antunes, the president of the company that owns the Marques Soares’ warehouses, is refurbishing three buildings – two in the centre of Porto and one in Braga – and converting them into flats, with the aim of placing them in the local housing or long-term rental market. While the executive declined to cite the amount that the company is investing, Mr Antunes stressed that the project includes 40 apartments, which are already under construction and will be available within two years.

Luxury and design

The Accor group, which entered into the business through its acquisition of Onefinestay in 2016, currently has 14 housing units in Portugal, the vast majority of which are in the region of Lisbon. The platform focuses on offering luxury real estate and guarantees that its service is identical to that of a five-star hotel. Guests can also request extra services such as transport, restaurant reservations, a private cook, among others. Onefinestay is the world leader in luxury real estate rentals, after merging with Travel Keys and Squarebreak, with a supply that exceeds 10,000 homes in more than 180 destinations on six continents.

Marriot has recently invested in the market, focusing on selections based on design, functionality and location, with prices more closely aligned with the concept of local accommodations. Inês Nobre, Director General of Hostmaker in Portugal, said that the company currently has 36 properties in its Tribute Portfolio Homes platform in Lisbon. The Portuguese operation, which has been operating for just one month, is considered a “resounding success” and hence the company is “evaluating the possibility of launching Hostmaker in other cities/regions of Portugal.” The expansion strategy takes into account “supply, demand and profitability.”

For Inês Nobre, Hostmaker is the “ideal company to lead the professionalisation” of the local accommodation sector in Portugal. “Our international structure and specialised technology and hospitality teams allow us to innovate on a greater scale.”

The InterContinental Hotels Group is also operating tourist accommodations under their Staybridge Suites and Candlewood Suites brands. The properties are intended for stays of one week or longer, whether for business or leisure and are available in the United States, the United Kingdom and Canada. At the moment, the group has yet to begin operating in Portugal.

Original Story: Dinheiro Vivo – Sónia Santos Pereira

Photo: D.R.

Translation: Richard Turner