Pierre & Vacances Plans To Double Turnover In Spain By 2020

27 April 2016 – Expansión

The holiday apartment manager and developer, Pierre & Vacances, which has been operating in the Spanish market for 10 years now, has recorded average annual growth of 44% since it launched in Spain in 2005, with a portfolio of 215 apartments. Moreover, it intends to maintain that growth rate over the next few years, and whereby double its presence by 2020.

Specifically, the firm expects to expand its operations from more than 4,000 holiday apartments across 45 complexes in 2016, to 8,000 apartments by 2020, at the same time as doubling its turnover from €50 million to €100 million. In 2016, the group will incorporate five new complexes and 600 apartments. Moreover, it has renovated the Hotel El Puerto in Fuengirola.

Over the last ten years, Pierre & Vacances has invested €70 million in Spain, however, it does not currently own any assets, according to the Chairman of the Spanish subsidiary, José María Pont. One of the group’s business lines involves searching for institutional and private investors willing to purchase real estate assets with lease contracts spanning 10-15 years and returns of between 3.5% and 5% per annum. In addition, the firm has reached agreements with investment funds, which have invested €65 million in assets managed by the firm.

Looking ahead to the future, given the lack of stock in certain areas such as the Costa Brava, Balearic Islands and the Costa del Sol, the group is considering launching projects “from scratch”, including constructing and operating the assets itself. “In certain areas, the circumstances in the market lend themselves to taking on more risk”, says Pont. The Director says that Spain is one of the group’s strategic axes, along with China, where Pierre & Vacances has reached an agreement with HNA to develop five large projects over the next three years.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Ups and Downs of Spanish Hotel Sector

27/10/2014 – Expansion

Spain is set to beat a new record high on the foreign tourist number said to reach 62 million visitors at the closing of 2014.

The Canary Islands have the best climate in the world. Both for the holidaymakers and for the business talks. The Tenerife island hosted a summit organized by Spanish Confederation of Hotel Owners (Cehat) and non-profit tourism organization Exceltur. The meeting, attended by such big-name brands as Iberostar, Paradores and Hotusa, has heard several noteworthy conclusions:

Lending returned, however it has not been felt by everyone yet. Do banks agree to finance hotel projects again? Yes and no. As Amancio Lopez Seijas, president of Hotusa and Exceltur said, “there is no excessive distrust in the sector but the real estate part of it stands in question. Loans are being granted again, though only for viable projects and to solvent companies”.

Investment funds fancy hotel assets. “Yes, indeed the interest of mutual funds in buying in the hotel sector upsurged”, remarked Sabina Fluxa, executive vice-president at Grupo Iberostar. Just look at the numbers. A vulture fund demands a 15-20% profitability, whereas for a more long-term investor a range of 10-12% is completely acceptable. All investment funds truly adore Spain: its hotels, retail centers, debt portfolios, etc. But the suspicion persists. “An investment fund is an alternative for financing but the cost and the risk must be taken into consideration, too. This vehicle shall not be chosen for a stable growth”, Mrs Fluxa admits.

Fair in terms of volume, but not profitability. The year 2000 saw 45 million foreign tourists visiting Spain. In 2014, their number is estimated to mark between 60 and 62 million. Over the fifteen years, the country managed to tempt 15 million visitors more but the total earnings dipped down by €4 billion to €45 billion. The good news is, according to Paradores’s chairwoman Angeles Alarco, that “prices are coming back to normal”. What if suddenly Germans, the French or Italians stop arriving? Directors have a solution for such a doomsday scenario: closing hotels in some locations and introducing high-tech innovations, as well as new products. This is how the sector could fight seasonability and make profits from establishments which open 150 – 180 days per year.

New black hole: the holiday apartments. As per statistics, of the 60 million foreign tourists visiting Spain each year, 11 million do not check in hotels but in homes of friends or acquaintances. Joan Molas from Cehat expressed his scepticism on this matter and pointed out unfair and illegal competition constituted by tourist accommodations and platforms managing them, such as Airbnb. The executive went as far as to state that “the Central Public Administration does not understand the problem, while the regional authorities do only a little”. The hotel owners feel oppressed by too many regulations, unlike the new rivals. However, no one has mentioned the new platform of Enrique Sarasola who decided to combine legal apartments with hotel services. Right now crawling, the illegal holiday apartments may pose a serious threat to urban and beach establishments, belonging to large chains, boarding houses, hostals and independent hotels.


Original article: Expansión (by Y. Blanco)

Translation: AURA REE

Majority of Foreign Tourists Opt For Vacation Rentals

10/10/2014 – Expansion

The news on the new record tourist flow registered during summer months of July and August reporting a 7.4% advance in the number of foreign visitors, soon also revealed less positive data for the hotel sector. In traditional establishments, tourist receipt rate grew by a mere 0.4%, whereas homes for rent enjoyed by 19.1% greater popularity than in 2013. The information has been provided by lobbying organization Exceltur.

Thus, out of the 1.2 million tourists who visited Spain in July and August, only 16.8% stayed in hotels, 15.4% in their propietary dwellings and a staggering 57.8% in a rented apartment. ‘The fact hurts the sector profoundly as large part of these flats are illegal, additionally enhancing unfair competition’, complains vice-president of Exceltur, Jose Luis Zoreda. The spokesman of the lobby also meant other alternative services like the one provided by Airbnb, a web site which intermediates between property owners and tourists.

Year-to-date, the gap slightly narrows as regulated overnight stays went up 2.7% from January throughout August in reference to the same period of time in 2013, for the benefit of a 14% rise in renting by foreign tourists. The losses affect more the accounts of the establishments ranging from one to three stars (2%), while higher category hotels are more resistant to the effect, still registering a 6.1% increase.

As a result, tourist expenditure accumulated by August dipped down by 4% in real terms and averaged at €706 per visitor. This particularly means the biggest decline since 2006 and the 14th consecutive fall.

Next cause of the effect is related to decline in the average stay which, rooting down to low-cost flights, stood at 4.82 days over July and Agust, juxtaposed with 4.97 days in summer 2013. Exceltur also assigns the phenomenon to the arrival of less tourists with travel packages as political stability in Egypt returns.

Tourism & GDP

In spite of all, the sector is still the main engine of the country’s economy as its contribution to the Gross Domestic Product of Spain increased by 2.9% in the third quarter in reference to the same period a year earlier and it is estimated that by the end of 2014, it will have averaged at 2.4%, doubling the outlook for the entire Spanish economic growth set at 1.3%.

On the other hand, employment in the sector took a step forward with creation of 65.030 jobs more in year-on-year terms. Specifically, restaurants employed 51.700 new workers, the accommodation segment gave 11.550 jobs, while travel agencies – 1.780. Also, other areas closely tied to tourism signed more work contracts, such as the air transportation (523 jobs more) and the leisure activities area (8.761 new positions).


Original article: Expansión (by Pablo Cerezal)

Translation: AURA REE

Room Mate, Pioneer in New Concept of Vacation Rentals

18/09/2014 – Expansion

Recently, the hotel sector has taken a legal action trying to fight activity of such web pages as Airbnb, which mediate on holiday rentals between travellers and apartment owners. Their main argument was that there is neither control over quality of the rented properties nor over the service.

Room Mate, led by Enrique Sarasola (pictured), launches new on-line platform BeMate allowing tourists to find an accommodation in holiday apartments in city centers and enjoy some of services of a nearby hotel of the Room Mate chain. The BeMate community is born with a database of 2.500 dwellings located in ten cities in five countries: Madrid, Barcelona, Malaga, Salamanca, Granada, Florence, Amsterdam, New York, Miami and Mexico DF. They are one to four-room apartments offered for rent at prices ranging from 80 to 400 euros.

The flats, supervised by the Room Mate team, are found a 15-minute walk away from the hotel chain establishments in these cities. Moreover, guests of the apartments dispose of a 24-hour concierge surveillance, key delivery and luggage storage. Likewise, BeMate offers other paid services like airport shuttle, daily room cleaning or ticket purchase for events.


The project, driven by demand for a new way of travelling, has been developed in the last two months and half. Mr. Sarasola assures he is ready to share BeMate with other independent hotel owners.

He particularly means finding partners in the citites where Room Mate has no establishments. The chain would charge a commission on each booking, 5% from the apartment owner and 10% from the tourist.

Expectations of Mr. Sarasola, who holds 56% in BeMate, is to reach 200 cities (50.000 flats) by the end of 2015. The businessman already eyes the markets of Seville, Istanbul, Lisboa, Rome, Milano, Chicago, Los Angeles, San Francisco, Singapur, Hong Kong and Bangkok.

Room Mate, set up in 2001 and holding the remaining 44% in BeMate, currently operates 19 hotels. Within the following 15 months, the chain is going to add 10 establishments more and it hopes to cross €200 million of capital gains by 2017.


Original article: Expansión (by Yovanna Blanco)

Translation: AURA REE