8 June 2015 – Expansión
Geographical diversification / One Shot Hotels, which has just signed its third project in Madrid, is evaluating an IPO on MAB in the medium term as it looks to open a hotel in New York.
One Shot Hotels is quickening the pace and looking towards Europe and the USA. The chain led by Luis Felipe Mendieta and owned by the Solís family is, despite its young age, the new star in Madrid’s hotel market. In just two years, One Shot has signed three projects in the capital. The latest one, the conversion of an office building into a hotel on Calle Fortuny, was completed a few weeks ago.
“One Shot began as a university start up, with several 30-bedroom hotels in Andalucía”, says Luis Felipe Mendieta, the CEO of One Shot Hotels. After obtaining financial backing from the Solís family, the project made the leap to the Premier League, in Madrid: “We saw that there was very little differentiation; price was the only factor”.
To differentiate itself, One Shot put its commitment to contemporary art on the table, by converting its hotels into a dynamic platform for unknown artists. One Shot 23, a 42-room three-star hotel on Calle Prado (pictured above) was the company’s first property in the capital, which opened in 2013.
Since then, One Shot has invested €35 million in eight projects. Only two of its hotels are currently operational – Prado 23 and Recoletos – but this year, the firm will open nine establishments in Valencia, Sevilla and London – owned 50% with the Arab investor Riz Ali- and more hotels will be opened in Madrid and Barcelona in 2016.
In terms of its model, the chain mainly focuses on four-star hotels that have between 50 and 80 rooms. “And for the purchase and rental, the management is complicated because we do not generate sufficient critical mass”, according to Mendieta.
Spain – Barcelona, Bilbao and San Sebastián; UK – London; Italy – Rome; USA – New York, Los Angeles, Miami and San Francisco – are all on the radar… In numbers, “our objective is to double our size, to 15 hotels by 2020, and mainly concentrate on overseas expansion”.
At an operating level, the company closed 2014 with revenues of €3.5 million and a gross operating profit of close to 35% of turnover. Once the eight hotels in the pipeline have been opened, the firm expects to generate revenues of between €18 million and €19 million p.a.. The average daily rate (including VAT and commission) at the Hotel One Shot Recoletos, on Calle Salustiano Olozaga, is €135 – €105 in the hotel on Calle Prado – with an occupancy rate of 96% and with 75% of the guests coming from overseas. “So far in 2015, we have noted an increase in the average revenue per room (RevPar), which is not being driven by an increase in the occupancy rate, but rather by an improvement in prices”, says Mendieta.
Mendieta is considering an IPO on the MAB, but says that “it is wiser to wait until the entire project has been developed”. And he explains why: “It is more attractive (for us) than a Socimi, which forces you to distribute dividends, whereas what we want to do is reinvest, and that is the strategy we value for expanding into the market in New York, listing on the MAB or joining forces with a fund”.
Original story: Expansión (by Yovanna Blanco)
Translation: Carmel Drake