Bank´s Partners Managing Hotel Assets

20/02/2014 – Expansion

Small team, flexibility, prices lower than those offered by large chains and individual approach to each project. These are the characteristic features of a strategy undertaken by such companies like T3, GAT, PHG, GSA and Sands Resorts. The firms are mostly known within the touristic sector and recently have helped the bank to solve problems concerning hotel inheritance.

During the recession, banks were defending themselves against being awarded hotels as that would inevitably mean hiring more people. (…) Thus, only between 3% and 5% of all transfers involved hotels. Complexity of the asset hampered other asset awarding. Instead of seeking new refinancing, the banks hired manager companies that could operate the hotels by the time bank finds a buyer for them.

Sabadell together with Solvia left other banks behind in terms of this kind of activity. After inheriting high hotel risk from CAM, the bank came to an agreement with Barceló that declared itself ready to manage the Hotel Selenza Estepona of Rayet group.

Banco Popular also closed several transactions in the field, like allocation of the Hotel Las Dunas, also of the Estepona chain, managed by PHG and finally sold to Kiluva group.

In 2014 the opportunities cropped up due to the growing interest of foreing funds attracted by the Spanish property. Albert Grau, managing partner in Magma Hospitality Consulting says that “investment and demand markets are waking up, especially in Madrid and Barcelona. Banks smell the opportunity and enhance their assets by granting the management to companies specialized in short-term hotel administration or hotel groups that would replenish the products and prepare them for sale”.

Miguel Casas, expert in hotel industry in CBRE, expects to “see more movements in debt sales rather than in their executions as this is the fastest deleveraging route for banks”. And funds are interested in company debt. (…).

Considering the growing opportunities for transient hotel management firms, Luis Arsuaga, responsible of the Hotels of Jones Lang LaSalle in Spain claims that “there is a niche of firms that without expanding their size can temporarily manage for example white labels, such as the Hitlon chain. This sort of companies are scarce in Spain”.



Original article: Expansión (Yovanna Blanco)

Translation: AURA REE