Pestana Group closing in on 100 hotels

26 May 2017

It’s the largest multinational hotel group of Portuguese origin. It owns and manages 90 hotels, totaling more than 11,800 rooms in 15 countries and 4 continents. With 1.1 billion euros in assets, it will be managing more than 100 hotels by 2018.

With a turnover of 360 million euros, 2016 was the best year yet for the Pestana Group. Recently, José Theotónio, CEO of the Pestana Group, said that data from 2017 point to growth of 10%, of which tourism-related business accounted for more than 90%.

It reflects a boom in tourism in Portugal, but technology companies such as Google and Booking are taking more advantage of the moment, having appropriated some of the value stemming from the tourism business. As José Theotónio, CEO of the Pestana Group, said recently, “there has to be a direct relationship with the end customer, so we have to work on branding, distribution, systems, customization and customer loyalty to ensure a basis that can provide us with a measure of independence”. This requires scale to make the investments needed to distribution, both in systems, as in competence centres. This is where the Pestana Group’s international profile helps.

Scale and innovation

The Pestana Hotel Group is currently the largest multinational hotel group of Portuguese origin, with 7000 employees around the world. It owns and manages 90 hotels, totaling more than 11,800 rooms in 15 countries and 4 continents. With 1.1 billion euros in assets, it will be managing more than 100 hotels by 2018. The group also manages 12 Vacation Club ventures, six golf courses, three real estate and tourism projects (Bahia in Brazil, Tróia and São Tome) and two casino concessions (Madeira and S. Tomé and Príncipe).

90
Number of hotels

11,800
Number of rooms

360 million
Turnover

In 2016, turnover was around 360 million euros, of which 80% was made in international markets and 20% in the domestic market; 75% in hotels in Portugal; 25% from international hotels.

The Pestana Group has recently partnered with Cristiano Ronaldo for the launch of the CR7 hotel chain, with two hotels operating in Funchal and Lisbon and planned openings in Madrid and New York.  The hotels are held equally by companies belonging to Cristiano Ronaldo and Dionísio Pestana, the sole shareholder of the Pestana Group. The Pestana Group will receive a fee for managing the hotels, and Cristiano Ronaldo will receive fees for the use of the CR7 brand. The new brand, which could boost the group internationally, is directed towards more technologically minded millennials. The new venture joins the core business, which focuses on four-star Pestana hotels and resorts, the luxury segment with hotels in Porto, Lisbon and Cascais, and a historical segment with Pousadas de Portugal, which Pestana has been running since 2003, contributing 10% to total turnover.

From Madeira to the World

The Pestana Group began when Manuel Pestana, Dionísio Pestana’s father, entered the tourism business by buying the Hotel Atlantico, in 1966, with 20 rooms. This hotel was eventually torn down to give way to a Sheraton Hotel, today the Pestana Carlton Madeira. Dionísio Pestana was born in South Africa in 1952 and majored in management. In 1976 he went to Funchal to resolve some hotel issues before continuing to Europe. He stayed and began building his empire.

In the beginning of the 1980s, as business began to stabilize, Dionísio Pestana wanted to expand. In 1986, Pestana added the 300-room Madeira Beach Club and acquired ITI, a tourism company that managed Casino Park (now Pestana Casino Park Hotel), Funchal Casino and the Expo Center, in Funchal, from the regional government in Madeira. After having developed a solid base in its home market of Madeira, where it now has 13 hotels, the Pestana Group embarked on an expansion. In 1992, it acquired Salvor, the operator of four hotels in the Algarve.  Two years later Carvoeiro Golf with golf courses and tourism-related real estate became part of the group, after which hotels were opened in Cascais, Porto and Sintra.

The internationalization of the group started in 1998 with hotels in Maputo, Bazaruto and Inhaca, all in Mozambique. The following year it was Brazil’s turn. With the 2010 opening of the Pestana Chelsea Bridge, in London,  the Pestana Group first ventured into Europe, outside of Portugal. The Pestana Berlin hotel opened in 2011.

Since 2013 Pestana International Holdings has been Dionísio Pestana’s top holding company. Pestana has other businesses such as a participation in EuroAtlantic Airways (air charter transport associated with the Metello family), Atlantic Holidays (travel agency), Madeira Beer Companies, Albar – Real Estate Association of Barlavento (49%), Enatur (49%) and SDM – Madeira Development Company.

Original Story: Jornal de Negócios (written by Filipe S. Fernandes)

Translation: Richard Turner