Alchemy & Former Orizonia Director Create Hotel Group

5 October 2015 – Expansión

A new player has emerged in the Spanish hotel sector: Feel Hotels Group. The project has promoted by the fund Alchemy Special Opportunities and Javier Águila, the former Director of Orizonia, has just closed its first operation: the purchase of six hotels in Mallorca and Ibiza. This batch of assets, which belonged to Marina Hotels until now, comprises 1,200 rooms.

The acquisition, for an undisclosed sum, represents this hotel group’s debut in the market. Alchemy is the majority shareholder of the company, in which Águila also holds a stake. Águila is the CEO and leads a team with extensive experience in Spanish hotel chains, including Iberostar, Luabay and Bahía Principe, amongst others. Meanwhile, Alchemy, which has invested around €4,000 million (in various initiatives) since its launch in 1997, has been analysing opportunities in the hotel sector in Spain for a while; it has already invested in this sector in the past in the UK.

Four star properties

Feel Hotels Group will take over the management of the hotels from the beginning of 2016 and will invest €15 million modernising the facilities. The refurbishment of the six 3-star and 4-star properties, will be undertaken in 2016.

The chain will focus on the sun and beach segment and on 4-star hotels, although it does not rule out the possibility of acquiring a few lower grade or luxury establishments. Initially, it is targeting the main tourist areas in Spain, including the Canary and Balearic Islands, as well as the mainland coast and the south of Portugal. In the medium term, when Feel Hotels Group has secured a critical mass, it will expand its focus overseas.

The group’s route-map envisages that it will build up a portfolio of between 20 and 25 properties over the next four years, through the purchase of more hotels and also, by securing lease and management contracts. If these figures materialise, and depending on the size of the properties, Feel Hotels Group can expect to generate revenues of around €100 million.

Brand

The commercial launch of the chain is scheduled for early next year. However, the name of the company itself, Alchemy, is being used for the time being. The management team has not yet decided whether it will use Feel Hotels Group as the brand of the hotel chain.

Interest from international funds and investors in taking positions in the holiday hotel sector has intensified in recent months. At the end of April, Brussels authorised the partnership between Meliá and Starwood Capital, whereby the fund acquired 80% of seven hotels in the Canary Islands, Balearic Islands and Costa del Sol, with almost 3,000 rooms, for €176 million. Meliá will continue managing these establishments.

Meanwhile, Barceló sold the Hotel Barceló Santiago (Tenerife) to the Chinese group Chongqing Kangde Industrial, with whom it had been negotiating since 2013, for €50 million. In parallel, Barceló created the first hotel-only Socimi, with 16 holiday establishments.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

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