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Madrid Is Open to World’s Luxury Hotel Chains

27/08/2014 – Cinco Dias

Five-star hotels return to the capital of Spain. First opening of the Four Seasons establishment, low property prices, recovery of the room prices and improvement in hotel occupancy, they have all illuminated Madrid as one of the noteworthy targets of huge luxury brands.

Together with them, smaller boutique hotels are preparing to enter the premium segment of the city. For instance, Marugal, a company specialized in idependent hotel management and 4* and 5* establishment development, is at the verge of opening the doors of the Urso Hotel & Spa, located in a beautiful palace on the Mejia Lequerica street.

The new establishment is situated in a building from 1915 which used to be the headquarters of an old Biscay firm, Papelera Española. In 2011, it underwent a comprehensive remodelation for around €4 million with a view to being converted into a NH Hotel. However, the project went up in smoke.

The 78-room hotel Urso employs 48 people. It is another establishment in Madrugal‘s management portfolio, next to hotels in the Balearic Islands, La Rioja, the Basque Country and Madrid. ‘We are very pleased with the first advance bookings and the prospects are quite good’, says Pablo Carrington, the CEO, convinced that in September and October the hotel will register 60-70 per cent occupancy.

The 5-star Urso is not the only one to open soon in the capital, though. In August, the City Council of Madrid commenced rehabilitation works on the Plaza Mayor square which assume creation of a new establishment with 40 rooms.

‘The year 2013 has been one of the worst annums in terms of tourism, however, the first half of 2014 showed an increase in the RevPAR (revenue per available room) measurment, as well as in demand’, says Albert Grau, CEO of Magma TRI Hospitality Consulting.

Four Seasons, opening in 2016, will constitute a serious competition to other establishments in Madrid, such as the Palace or the Ritz. The hotel will be situated inside the Canalejas Triangle owned by Juan Miguel Villar Mir, the owner of OHL. It will offer 200 rooms and a number of suite apartments.

The Autumn Operations

This autumn will see many new establishments opening and a certain rotation in hotel managment. For example, the City Hall in Madrid issued a permit to transform the Casa de la Carniceria building into a hotel.

Thus, during the third quarter, there will be no changes seen in the Plaza de España square area where the refurbishment works are supposed to end up with a 5* hotel occupying the units number 3, 4 and 5. On the other side of the square, there is the España bulding that was aquired by Chinese businessman Wang Jialin from Santander for €265 million. The property will be also converted into a hotel of between 21.000 and 22.000 square meters. The building has formerly housed Hotel Crowne Plaza.

Furthermore, the odds are high that the Ritz establishment in Madrid will change hands. Giants like Marriott have demonstrated their interest about the property put up for sale by Omega Capital and Orient-Express.

‘It is astonishing that Madrid does not have a Four Seasons, a Hyatt or a Hitlon hotel in the downtown’, Carrington wonders. ‘All indications are that Madrid matured as a tourist destination and now the premium group of them looks at the city with a certain interest’.

Original article: Cinco Días (by Laura Salces)

Translation: AURA REE