2 November 2015 – Expansión
Whatever is decided in Stamford (USA), where Starwood Hotels & Resorts has its headquarters, will have a knock-on effect on some of Spain’s top hotels. The world’s eighth largest hotel group is up for sale and whoever acquires it will enter the Spanish market in style.
Starwood Hotels & Resorts is not the largest hotel chain in Spain. Its 17 properties are a far cry from the 164 owned by Meliá, the 141 owned by NH and the 93 owned by Accord, the overseas company with the most hotels in the country. Nevertheless, Starwood’s portfolio is special because it contains historical hotels such as the Palace in Madrid, the María Cristina in San Sebastián and the Alfonso XIII in Sevilla (pictured above), as well as individual assets such as the W Barcelona, also known as Hotel Vela, and 43 rooms at the complex designed by the architect Frank Gehry in the Marqués de Riscal winery.
None of the properties are actually owned by Starwood and therein lies much of their value: since the group does not own any of these real estate assets, it does not run any of their significant risks. “Starwood has a very valuable hotel portfolio in a complicated market for international brands that work with management contracts; until now, this has made it more difficult for these brands to enter Spain, where the owners of properties prefer a rental contract”, says Miguel Vázquez, Managing Partner of Irea Hotels.
Starwood only operates three of its 17 hotels in Spain under a lease contract – W Barcelona, María Cristina y Alfonso XIII -. The rest are management and franchise contracts. This is the model used by other foreign hotel giants, such as Hyatt, one Starwood’s potential suitors. The US firm was left without any presence in Spain when the Queiroz Pereira family decided to take over the management of the Hotel Villa Magna after it was re-opened in 2009. Since then, and especially following the announcement that the Four Seasons and Mandarin will soon be operating in the Canalejas complex and at the Ritz in Madrid, Hyatt, Hilton and Marriott have shown a great deal of interest in Spain.
Several Asian candidates are also in the running to take over Starwood. They include the sovereign fund China Investment Corporation, the local chain Jin Jiang and the airline Hainan, owned by HNA.
Two of the three already have links with Spain. Jin Jiang is one of Melía’s partners in China and, after purchasing Louvre Hotels in 2014, it has a dozen lower-cost establishments in Spain. HNA’s links are even greater still: it is the largest shareholder of NH – with a 29.5% stake -, it renders support services to 11 airports after it acquired Swissport and it is negotiating the purchase of a stake in the tourism group Globalia.
Luxurious – all but one of Starwood’s hotels are five-star establishments –, well-located and well-maintained. The group invested €20 million in Hotel Alfonso XIII, which is owned by the Sevilla Town Hall, between 2011 and 2012; it spent the same on the refurbishment of María Cristina. Others, such as the Marqués de Riscal Hotel and the Hotel Vela, are not even ten years old yet.
Original story: Expansión (by Yovanna Blanco)
Translation: Carmel Drake