Tag: AC

Hoteliers At FITUR Stand United Against Airbnb

25 January 2017 – Expansión

Same rules of the game / Directors of several major hotel chains are accusing the collaborative economy platform of unfair competition. They are also demanding more regulation and control by the authorities regarding homes made available for tourist use.

Fitur – the major tourism fair – brought together the main players in the tourism sector once again: airlines, hotel groups, transport companies, tour operators, travel agencies and purchasing centres, amongst others. One group of player, who did not attend but who were omnipresent at all the meetings, were online platforms, such as Airbnb. Even the definition of the collaborative economy was generating controversy.

Sources at Madrid’s Hotel Business Association (AEHM), the capital’s hotel trade association, emphasised that the boom in tourist homes is not only a phenomenon that is affecting cities such as Barcelona, although that city is hitting the headlines the most.

“Madrid has seen spectacular growth, increasing from 10,000 to 20,000 homes in one year and from 37,000 to 74,000 beds, although most of those have not been registered”, said the AEHM’s President, Gabriel García. “It constitutes unfair competition for the sector and it must be addressed”, he said.

Gabriel Escarrer, Vice-President and CEO at Meliá, was equally convinced. “There is a lack of regulation in the poorly-named collaborative economy. Meliá spends almost €18 per room in order to comply with regulations, not just in terms of taxes and licences, but also to comply with specific measures such as fire-proofing, security, occupational health and safety. That generates a disadvantage for us with respect to any individual who decides to rent out their apartment; what’s more, in most cases, those apartments do not have a licence or pay VAT”, he said.

For Escarrer, the person responsible “should not only be the owner of the home, but also parties that include such properties on their websites when they do not have operating licences”.

The Director General at the Palladium Group, Abel Matutes Prats, is aware that “we cannot buck the trends”, but, he emphasises that “it is unfair that there is so much regulation for hoteliers and yet a complete lack of regulation, both fiscal and normative, for everyone else. To illustrate the situation, he says that one segment has five referees watching over it, whilst the other has none”.

Antonio Catalán, President of AC by Marriott expresses the same sentiment. He considers that it is essential that the authorities act.

Sources at Airbnb say that they are not opposed to regulation but rather that they require it to “allow people to share their own homes”, in other words, they want “a single legal framework for individuals, distinct from the one applicable to professionals”. And they add: “The existing framework favours professional operators and harms those middle class people and families who want to open up their habitual residence. The collaborative economy needs clear legislation and Airbnb has always been open to working with cities to identify specific solutions”.

Property conversions

(…). “In many urban centres, residential assets are being converted into tourist properties and many cities are just not ready for the change, from the point of view of infrastructure or services. This results in problems for people living together”, explains Escarrer.

For Catalán, the key resides in “what type of city we want, Paris or Cancun, and what we have to do to achieve it”.

“In Ibiza, a type of tourism-phobia is started to emerge, which is hitting hoteliers. We have fewer rooms there than before. We bring fewer tourists than before, with higher quality but less volume. Why are there more tourists? Because of the collaborative economy. We need specific laws, like in New York, to limit the duration of stays and to require tourist apartments to comply with certain minimum health and safety requirements, and moreover, for tax fraud to be prosecuted”, said Matutes.

Airbnb’s sources reiterate that they are “part of the solution” to the challenges that cities are facing: “Airbnb complements the traditional tourist industry and helps to redistribute economic benefits from tourism amongst citizens, communities and neighbourhoods”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

The Salazar Family Sells Hotel Velázquez For €63M

26 July 2016 – El Confidencial

Beset by debt, the Salazar family, the former owner of SOS-Cuétara, has spent the last three years trying to get rid of its vast hotel and real estate empire, an emporium whose last great jewel was the Gran Hotel Velázquez in Madrid, a property for which it has just received an irresistible offer.

Corporacion Hispano Hotelera, the company owned by the Salazar-Bello family, has reached an agreement with the Didra Group, famous for having constructed the luxurious residential areas of Montepríncipe and El Encinar, to sell the property for €63 million, according to several sources close to the deal.

The Ardid Villoslada family, which is behind Didra, has been linked to the property development business for decades and was made famous due to the marriage of one of its members, Rafael, to Mariola Martínez Borduí, the granddaughter of the dictator Francisco Franco. One of their sons, Jaime Ardid Martínez Bordiú has closed this agreement, with a view to opening a luxury 5-star hotel.

On 23 August 2016, Corporación Hispano Hotelera will present this sale for approval by the General Shareholders’ Meeting, with the aim of wrapping up the final sale in January, once the Salazar family has also received the blessing from its creditor banks, led by Banco Popular.

With its privileged location, in the heart of the neighbourhood of Salamanca, just a stone’s throw from the Retiro Park and the capital’s golden mile, the Gran Hotel Velázquez is a sought-after establishment. Nevertheless, it needs to be completely refurbished, according to experts in the sector.

In fact, Didra is expected to invest between €15 million and €20 million refurbishing the property. It plans to retain the image of a more bourgeois Madrid that characterises it, and always under the maxim of reserving the right to manage it, meaning that the Ardid family’s plans do not include opening a large hotel chain.

Didra maintains a close relationship with brands such as AC and NH, with which it operates some of the properties in its hotel group Nevertheless, the plans that the Ardid family have in mind for the Gran Hotel Velázquez more closely resemble the concept of the Hotel Palacio de Villapanés in Sevilla, a 5-star property located in the neighbourhood of Santa Cruz, in a former seventeenth century palace, which Didra manages itself.

With this sale, Corporación Hispano Hotelera will be reduced to an empty shell, after selling off the majority of its hotels in just over two years. The house of cards first started to topple in the Spring of 2014, when it had to close down Hotel Ada Palace, located on Gran Vía in Madrid, after it was evicted by the owner of the property, Real Gran Peña, which denounced the company for not paying the rent.

A year later, Hotusa purchased the Hotel María Elena, located 50m from Puerta del Sol, and renamed it the Eurostars Casa de la Lírica; meanwhile, Platinum Estates acquired the Hotel Asturias, in Plaza de Canalejas for €21.5 million. (…).

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

AC, Hesperia, Piñero And BlueBay All Plan To Launch Socimis

9 February 2016 – Expansion

Following the success of Barcelo and Bay, more and more chains are in the study of creating a listed vehicle and separate property assets from hotel management to reduce risk and free up resources.

Despite the negative start in the stock markets, 2016 could be the year of hotel Socimis. The alliance between Barceló and Hispania to create the listed investment vehicle “Bay”, together with the interest of investors in the hotel sector in the heat of the tourist boom and the recovery of the Spanish demand, have encouraged BlueBay, AC, Hesperia and Grupo Piñero to launch their own Socimis.

In the case of Blue Bay, the plan is well underway and its Socimi could debut on the floor in the first half with four hotels in the Balearic Islands and one in “Costa del Sol“, and a value of between EUR 150 and 250 million. As Antonio Fernandez, Chairman of Armabex and registered adviser in the operation, “the operation of Barceló and Hispania has made both large chains and small and medium-sized family companies reflect.” 
According to Fernandez, “This is the time of hotels, due to real estate valuations, the liquidity in the market and the type of asset. Since they operate with a lease contract, you can capture some of that value as investment. And he adds: “In the coming years, no properties will be sold, but the SOCIMIs themselves”.

So far, the focus of hotel SOCIMIs has been the holiday segment, taking advantage of the excellent moment in tourism – Spain received more than 68 million foreign visitors in 2015 – and visibility, as the resort hotels have signed contracts of several years with tour operators. Thus, all hotels that Barceló transfered to Bay and with which Bluebay will create its Socimi are spread between the Balearic Islands and Andalusia. 
However, this trend might change in the medium term, with the first purely urban hotel Socimis. Meridia Capital works in this line, which could give the shape of Socimi to its fourth fund. The new vehicle specializes in city hotels, located in Madrid and Barcelona and will combine establishments of several chains. The project of Meridia Capital could open a window of opportunity to Hesperia Investment Group and AC, which are also analyzing the creation of their listed vehicle.

Hesperia, an NH shareholder, tried to sell a batch of six hotels during the crisis and transferring the property it would obtain funds to reduce its debt while maintaining the management of the establishments.

This is one of the great advantages for hotel companies. However, in the case of Meliá, the formula has been discarded because the Socimi forces to sign a lease contract and the Escarrer family´s chain guides its growth strategy via management. Nor is it in NH´s radar, since after progressive output deals in recent years, IT only has 13 owned hotels in Spain – out of a total of 79 – including Eurobuilding Madrid or Calderón Barcelona.

By contrast, it does have the door open to replicate the formula in other countries like Mexico – where the equivalent are the fibers, and Greece, but so far these projects have slowed. Likewise, Room Mate chain led by Enrique Sarasola, is planning to ally with a Socimi – in this case, it does not have owned hotels, but simply manage them, or a Reit – as these types of vehicles are known in the US, to boost their growth. In addition to the tax advantages and the distribution of at least 90% of income in dividends for investors, Socimis are a funding formula and make expansion – Barceló used the funds raised with Bay to purchase “Occidental” – and succession in family businesses easier.

Original story: Expansion (by Yovanna Blanco)

Translation: Aura Ree