Tag: hotel chains

Amancio López’s New Record: Hotusa Runs More than 3,000 Associated Hotels

7 February 2019

Hotusa, controlled by the Galician Amancio López, incorporated more than 300 new establishments during 2018.

Amancio López, a Galician from Chantada, works at Hotusa Hotels’ headquarters in Barcelona. López’s hotel chain increased its portfolio through agreements with more than 300 new establishments in 2018, thus becoming the world’s largest hotel consortium and surpassing, for the first time, a total of 3,000 hotels in its portfolio. 85% of the new hotels are outside of Spain, compared to 15% in its home country.

The Grupo Hotusa independent hotel consortium, which currently has a total of 3,030 establishments and more than 275,000 rooms, has a portfolio distributed throughout a total of 71 countries on four continents. The hotel chain has 93 hotels in Africa, 490 in the Americas and 95 in Asia (including Turkey). The organisation also has a total of 2,352 hotel units in Europe, of which 974 are in Spain. Urban hotels predominate, mostly 4-star hotels and an average size of 90 rooms.

Shopping in Galicia

Last year, Hotusa finalised its acquisition of the Gran Hotel La Toja (5-star) and the Isla de La Toja hotel (4-star), two establishments that it had managed since 2015 through the Eurostars chain. It also controls the Gran Hotel de Lugo.

Among the main international markets in which the organisation has a presence, France, where it has 359 hotels, stands out as its main international presence. The group has 325 hotels in Italy; 104 in the United States and 103 in Germany. The hotel also has a significant presence in Colombia and Mexico, with 85 and 84 hotels, respectively.

Created in 1977, Hotusa employs more than 5,500 employees and a turnover of more than 1.2 billion euros. It comprises the Eurostars Hotel Company, a hotel management firm with close to 200 establishments, Hotusa Hotels (with 3,030 associated hotels), the Keytel hotel representative, with more than 1,300 affiliated establishments, and the Restel reservation centre.

Original Story: Economía Digital Galicia

Translation: Richard Turner

Christie & Co: Europe is Still the World’s Most Visited Region

9 January 2018 – Press Release

Europe was still the most appealing destination and most visited region in the world in 2017, despite some disruptions faced in recent years, according to a report published by Christie & Co.

The report, launched by Christie & Co’s Hotel Consultancy team and entitled ‘European Travel Trends and Hotel Investment Hot Spots’ identifies future investment opportunities in the European hotel market by highlighting areas for increasing the value of visitation in the European market, reviewing the growth opportunities of feeder markets in Europe, analysing issues surrounding accessibility and airport capacity and highlighting which markets are expected to achieve strong RevPAR increases in the coming years making them ideal candidates for investment.

Despite other reports detailing the impact of Brexit, to date, the impact on European tourism remains unseen and Christie & Co predict the general positive outlook for tourism in Europe will translate into increased demand for accommodation. European travellers remain the key source for European destinations with domestic and other European travellers accounting for almost 90% of demand. The established feeder markets including the US, Canada, Japan and Australia continue to generate visitation growth for the European market. India and China are expected to experience healthy GDP growth over the next five years and both have populations over four times the US and affluence continues to rise. Thus, creating tremendous visitation potential for the old continent.

Christie & Co have identified two opportunities for increasing the value of visitation in the European market; firstly, Spain and Greece lag behind Western and Northern Europe in terms of value of visitation per international arrival. Christie & Co sees a real opportunity to boost the value of visitation by improving the quality of the hotel stock. Secondly, there are good branding opportunities across the European market as the hotel stock in the majority of European markets remains currently heavily unbranded and in need of investment.

Airport capacity remains a key challenge as accessibility is one of the key drivers for tourism. Christie & Co have analysed eleven major airports in this report and the findings reveal that seasonality concerns can be mitigated through providing additional flights during the shoulder season, making seasonal destinations more attractive outside of their peak times. If airport capacity is addressed promptly it will create wider development opportunities for hotels and further infrastructure.

Anna Eck, from the hotels consultancy team at Christie & Co comments, “The findings of the report show quite clearly that whilst Europe as a destination remains extremely popular, there is huge opportunity for international brands to grow in the region. Markets such as Iceland, Poland, Demark, Portugal and Sweden provide options for hotel chains whilst Ireland, Spain, Portugal Poland and Sweden would be ideal for opportunistic investors willing to take more risk. These markets are all expected to achieve strong RevPAR increases in the coming years as well as demand growth in excess of supply.”

Carine Bonnejean, Head of Consultancy – Hotels at Christie & Co comments, “We have worked closely with our European colleagues to develop this report and as a pan-European team we are able to offer strategic advice to maximise the potential of our clients’ business and investments. The report finds that certain countries are ideal for different types of investor and we are able to identify which cities in those countries are worth prioritising. Whatever the situation, we help to formulate a strategy to generate the best outcome.”

Original story: Press Release

Edited by: Carmel Drake

Hotelier Catalonia Leads Ranking of Spain’s Top 15 Tourism Companies by Gross Margin

24 November 2017 – Preferente

Catalonia, the hotel chain based in Barcelona and owned by the Vallet family, leads the first ranking compiled by preferente.com of the Top 15 Spanish tourism companies by gross margin in 2016, with a 30.2% gross profit on its sales. It is followed by large hotel chains such as the Ibiza-based Palladium, and the Mallorcan-based Grupo Piñero and Riu, which all generated gross margins of more than 20% during the last financial year.

The chain owned by the Matutes family is the second in the ranking after obtaining an estimated gross margin of 28.6% on its sales in 2016; it is followed by the group owned by the Piñero family, which includes the Bahía Príncipe and Soltour businesses, with a gross margin of 24.2%; and the chain owned by the Riu family, with a gross margin of 23.8% and the leader of the ranking by EBITDA.

Completing the Top 5 is another large chain and another Catalan firm: H10, which recorded a gross profit on its sales of 19.8% in 2016, followed by Grupo Barceló, with a gross margin of 14.2%, which would have been greater if it did not include in its sales the intermediation activity of Ávoris, which generates higher volumes but lower margins.

After Group Barceló in the ranking comes Grupo Iberostar, which comprises Almundo and World2Meet; and then the hotel groups NH and Meliá, which all exceeded or equalled a gross profit of 10% of sales in 2016. After those companies come the Canarian firm Lopesan and the Catalan firm Hotusa, which groups together Keytel and Restel, with similar gross margins of around 9% over sales.

A vertically integrated tourism group: an airline, a travel agency and a bed bank follow them in the ranking. At number 12 is Globalia, the parent company of Air Europa and Halcón Viajes, with a gross margin of 3.8% of sales, followed very closely by Iberia (3.7%) and Viajes El Corte Inglés (2.4%). The B2B firm Hotelbeds appears in fifteenth place with an estimated gross margin of 2% in 2016, a year when it had not yet completed the purchase of Tourico and GTA, the first of which generates significant EBITDA.

In this way, according to the ranking prepared by the leading tourism website, the chains with the greatest presence in the Caribbean and those dedicated exclusively to resorts are those that generate the greatest gains with respect to their revenues. Meanwhile, the conglomerates that also include intermediaries would have higher gross margin figures if they only reflected their hotel businesses, given that although they invoice less, they are more profitable.

Original story: Preferente (by Andrea Bulla)

Translation: Carmel Drake

Hotel Investors Switch Their Focus To Spain’s Second Cities

20 July 2017 – Expansión

Hotels have become of the star assets of the real estate sector with Socimis and investment funds lining up to buy them. And the forecasts show that these actors are set to consolidate their presence in Spain, gaining ground on the hotel groups – which will continue their commitment to a strategy focused increasingly more on management and less on ownership – and will analyse new secondary locations, in light of price rises and the decreasing yields in prime cities.

According to the Hotel Asset Management 2017 report, prepared by Magma HC, three-star hotels captured the attention of investors last year, given that they represent the most attractive asset for implementing repositioning models and improving prices. Specifically, 38% of the transactions closed in 2016 involved three-star hotels, 28% related to four-star properties, 24% to low-cost establishments and the remaining 9% to five-star hotels.

Albert Grau, Managing Partner at Magma HC, explained yesterday that the transaction market will shift its focus to the holiday segment, over the next few months, due to the (high) value of assets in prime urban destinations, such as Barcelona, Madrid, Málaga, San Sebastián and Palma de Mallorca, which are at levels that compromise their future profitability.

Although in previous years, the urban hotel market was the most sought-after by investors, in 2016, it accounted for just 33% of operations, whereas the holiday segment increased to account for 66% of the total. “Prices in cities such as Madrid and Barcelona have peaked, and purchases to generate wealth or profitability are complicated given the numbers”, said Grau.

By contrast, he considers that Spain’s secondary cities offer “great opportunities” for investors thanks to the significant potential that they hold and the fact that there are well-located assets there at “very attractive” prices.

However, the partner at Magma HC considers that the sector is a long way from a bubble, thanks to the greater professionalisation and the new requirements in terms of indebtedness levels.

Moreover, the report highlights that the Spanish hotel sector can expect to see new operations between hotel groups, such as between Starwood and Marriott, Fairmont and Grupo Accord and the purchase of Sidorme by B&B Hotels.

Commitment to rent

In terms of the business model, the most popular formula is still rental. Grau underlines that, given the strong performance of the market, owners who took the decision to bet on variable rentals are now receiving greater returns. In addition, the partner at Magma HC believes that the period of rent renegotiations, seen in previous years, is now over.

According to Magma HC’s report, hotel groups own 37% of their assets, lease 33% of them, manage 18% and operate 13% as franchises.

Grau explains that “more Anglo-Saxon” operations – management and franchising – are not growing, but continue to have a specific weight in the market and there is a growing trend to adopt them increasingly more, in line with international standards.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

“Valdebebas Is Ready To Welcome Companies Post-Brexit”

27 June 2017 – Expansión

Valdebebas – one of the largest urban planning projects in the Community of Madrid, with a land surface area of 10.6 million m2 – has fired the starting gun for what is expected to become the city’s “new financial and technological district”.

“We have land spanning more than 1 million m2 (equivalent to the surface area of almost 140 football pitches) available for tertiary use. People talk about Castellana Norte, but there is no development in Spain quite like Valdebebas. It is already ready to welcome companies from London searching for new locations after Brexit and any other multi-national companies”, explains Marcos Sánchez, Managing Director of the Valdebebas Compensation Board, which represents the owners of the land. Market sources indicate that the land owners include Monthisa, Bisbel, Vivienda Económica, Celteo, Coindeco and Inmobiliaria Espacio.

This business park will comprise twenty blocks, with buildabilities ranging between 9,000 m2 and 110,000 m2. It will house buildings that have between five and fourteen storeys.

The director said that, although they have not yet started “to sell” Valdebebas as a destination for companies, international investors, funds and hotel chains have already expressed their interest in the development: “We are still in the preliminary conversation phases. Until now, contact has been made because interested parties have been approaching us”.

For Sánchez, the aim of Valdebebas is to attract fin-tech companies and others relating to that sector. Moreover, it has the capacity to accommodate between three and four hotels and restaurant brands. “We have direct access to the airport and are well connected to the city centre. It is an unbeatable location in Europe and the world”.

In this sense, it is worth remembering that a bridge is being constructed to connect this area with Barajas Airport – T4, with a forecast investment of more than €20 million. “We have already moved earth and started building the foundations on both sides. The work, which was started in February, is going well and will be finished within two years”, he said.

Valdebebas has several advantages over the potential Operación Chamartín: the immediacy – with “windows of opportunity that can be benefitted from now” – its size and location, according to Sánchez. “Castellana Norte is our natural competitor; despite that we want that site to be developed as soon as possible and in the best way possible because we will all end up winning as a result”, he said.

Legal journey

In terms of the legal position, Sánchez acknowledges that, although Valdebebas has always been very judicialised – construction of between 800 and 1,000 homes has been suspended following a ruling by the Supreme Court – almost 100% of the residential property has been sold, the population already stands at 10,000 people and is set to reach 18,000 by the end of the year. In his opinion, it is “perfectly feasible” to reach agreements before the urbanisation is completed. “All of this administrative and judicial chaos will end when the urbanisation is handed over in two years time”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

CBRE: Inv’t In Hotels Exceeded €700M In Q1

10 May 2017 – CBRE

Hotel investment in Spain is growing again, as are the main tourist indicators. Just when it seemed as if the YoY growth in hotel investment was beginning to slow down (based on the results for 2016), transactions worth almost 35% more were closed during the first three months of this year, than during the first quarter last year. According to the data compiled by CBRE Hotels, between January and March 2017, investment in hotel asset purchases amounted to €710 million, including not only hotels but also tourist apartments, aparthotels, as well as plots of land and buildings acquired for hotel use.

Of the 44 assets that changed hands during the first three months of 2017, approximately 55% belong to the urban segment and 45% to the vacation segment. With respect to the destination of investments, the Spanish capital stands out, accounting for more than 40% of the total volume invested compared to 27% in Barcelona, which despite its moratorium saw the sale of five hotels. The Balearic and Canary Islands, together with the Costa del Sol, accounted for another 19% of the total investment figure. The remaining investment was distributed across the rest of the peninsula.

During the first quarter, almost 40% of investments were carried out by private investors, compared with 55% during the first quarter of 2016. On the other hand, almost 20% of the volume invested was disbursed by hotel chains and operators, whilst the remaining 40% corresponded to institutional investors, including banks, sovereign funds, Socimis, fund managers, insurance companies and pension funds.

In terms of the types of contract, and based on the data from CBRE Hotels, 45% of the total transaction amount corresponded to operations in which the buyer became the manager of the establishment, whilst the remaining 55% related to investors that assigned the management of the establishment to the existing operator or to a new one.

In terms of the main operations that took place during the first quarter of the year, we highlight the sale of 50% of Centro Canalejas by OHL and Villar Mir; the acquisition of Hotel Velázquez, which was acquired by the Didra group; the purchase of NH Manzanares; and the operation involving the future Generator, which was acquired by Queensgate. At the same time, in the Catalan capital, the Hotel Silken Diagonal Barcelona and Hotel Generator Barcelona were sold, for a combined total of more than €100 million. CBRE Hotels brokered the sale of one hotel in Barcelona during the first quarter of the year.

Finally, several operations involving portfolios of hotels were also closed during the quarter, including the transaction completed by the Portobello group in March, which saw it acquire 95% of the Blue Sea Hotels & Resorts hotel chain, which owns several of the hotels that it manages.

Original story: CBRE 

Translation: Carmel Drake

Millenium Group Resumes Its Hotel Socimi’s Activity

15 March 2017 – Cinco Días

The Millenium group has resumed its plans to launch a hotel Socimi. Following a break caused by the absence of a Government and the misgivings of some of its investors, the company has returned to the project.

The aim of the firm led by Javier Illán, which has now constituted the Socimi Millenium Hotels Real Estate, involves listing the company on the stock market in 2019, whereby maximising the term permitted for that purpose. Meanwhile, the vehicle is working hard to secure high profile investors and acquire hotel establishments.

Millenium plans to raise around €400 million from investors and expects that its Socimi will have a market valuation of between €650 million and €700 million when its debuts. For the time being, the company does not have a registered advisor for its debut on the stock market, but it has received support from investors who have participated in its investments since 2000, including large homegrown and overseas real estate mutual institutions and pension funds.

For new investors, Millenium has established a minimum entry ticket of €5 million. Moreover, it has not ruled out the possibility of allowing hotel owners to take a share in its share capital in exchange for “gifting” the property to its portfolio. Regarding the debut on the stock market, the company may open up another stock tranche, with a lower minimum investment of around €250,000, to give liquidity to its shares.

The vehicle is expected to acquire around thirty hotels, including those that the group already owns, such as the Hesperia on Paseo de la Castellana, the Hotusa in Plaza de Castilla and the Tryp Chamberí, all in the centre of Madrid.

The Socimi will acquire urban and vacation hotels, however, Javier Illán states that they are also analysing cities that receive lots of tourist visitors. Besides Madrid and Barcelona, he points to other major capitals such as Málaga, Sevilla, Córdoba, Granada, Bilbao, San Sebastián and Valencia. The Canary Islands and the Balearic Islands, together with the Costa del Sol, will be its areas of focus in the vacation segment, all areas that have been under the spotlight of domestic and international investors alike, over the last year.

This year, Illán hopes to close around ten acquisitions on which he expects to spend around €200 million. He also acknowledges that the company is holding talks with all of the hotel chains interested in operating lease contracts.

For the time being, none of these operations has materialised and the hope is that they will be completed one by one and not in batches to avoid acquiring unwanted assets.

The Director also assures that he intends for 70% of the portfolio of establishments to require investment for their repositioning and refurbishment (value added, in English), which whereby differentiates it from the model adopted by Hispania in the vehicle that it created together with Barceló: Bay.

The group, which specialises in the development of luxury residential properties and commercial premises is carrying out detailed analysis with a view to creating a Board of Directors for the Socimi, which will mainly comprise independent directors.

Original story: Cinco Días (by L. Salces and A. Simón)

Translation: Carmel Drake

Hotel Financing: Sabadell’s Market Share Rises To 31%

26 January 2017 – Expansión

Sabadell was the only Spanish bank to have its own stand at Fitur. The entity’s decision to physically attend the tourism sector’s major annual meeting reflects its desire to consolidate its position as the key player in this business segment, which is so strategic for the Spanish economy.

Two years ago, the bank chaired by Josep Oliu decided to launch Sabadell Negocio Turístico, a specialist division that has allowed it to secure a market share of 31% and increase the volume of financing it has granted to the sector to €4,500 million.

Over the last two years, the granting of loans to tourism companies has grown by €1,500 million, according to José María Martín Rigueiro, Director General of this business unit.

According to the executive, 90% of this volume is used to finance hotel purchases and the remaining 10% corresponds to loans used for renovation projects and energy efficiency improvement plans in tourist establishments. Nevertheless, in terms of the number of transactions, the proportion is inverse, in other words, 90% of the loans (by number) are granted for renovations and 10% for acquisitions.

More than 13,500 clients

“We have positioned ourselves as a key player in the whole sector, given that we are the only bank to offer a specific value proposition for financing tourist services and products. Moreover, it is suitable for large hotel chains, as well as the smallest of rural hotels”, said Martín Rigueiro.

Thanks to its specialist agents, Banco Sabadell is growing its client portfolio by 7% per annum and is now collaborating with 13,500 companies, including hotel groups, campsites, travel agents and tour operators. Moreover, its net investment balance is increasing at an annual rate of more than 10% and the volume of client resources managed is growing by more than 25% each year. The objective for this year is to grow its client portfolio by 8% and to increase its credit investment by 10%.

“At Fitur, we were breathing an environment of maximum optimism; the hotel sector is expected to grow this year, in terms of both occupancy rates, as well as average room rates”, explained the Director of Sabadell Negocio Turístico.

The banker also attested to the strong interest from international funds keen to invest in hotel assets in Spain. Investors are managing returns of between 9% and 18%, said Martín Rigueiro. (…). The greatest interest is being seen in the vacation hotel segment, as well as in the urban segment, in major capital cities.

Financing for hotel purchases is being provided across the board: to investment funds, Spanish family offices, individual investors, as well as hotel chains. 90% of the sectors largest players are clients of Banco Sabadell, and the bank now also has a market share of 45% in the SME tourism segment.

According to Sabadell, the default rate of new loans granted to hotels since the crisis is very low, given that operations are no longer being leveraged on the basis of the value of the underlying real estate assets, but rather on the basis of the business plans and income statements of the establishments. (…).

In parallel to this specialist business unit, Sabadell also operates in the hotel sector through HI Partners, a hotel investment and management company.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Barceló, NH & Meliá Have Sold Assets Worth €1,000M In 2 Yrs

7 January 2016 – Expansión

The large Spanish hotel chains, led by Barceló, NH and Meliá, are continuing to slim down their real estate portfolios and to opt for lease and management contracts – over the last two years, they have sold assets worth more than €1,000 million with a dual objective: to clean up their balance sheets and to finance the growth and modernisation of their properties.

Barceló leads the ranking, by volume, thanks to the creation of the Socimi Bay together with Hispania. The hotel chain transferred 16 hotels and two shopping centres to the new entity in 2015. Hispania holds a 76% stake in Bay, having invested €458 million in the company. In parallel, between 2014 and 2015, Barceló sold other assets in the USA, Latin America and Spain – including the Hotel Barceló Santiago to the Chinese company Chongqing Kandge – for €212 million.

The intention of the group controlled by the Barceló family was to reduce its real estate exposure, which had reached a historical peak. The effect of these divestments has been partly offset by the purchase of its competitor Occidental, also in 2015. Currently, Barceló owns 45% of the 118 hotels that it operates.

Meanwhile, NH signed the largest divestment operation seen in the last two years. In 2014, it transferred the Spanish business of Sotogrande to Cerberus and Orion for €225 million. The hotel chain still has projects in Italy, Mexico and the Dominican Republic, but they may be removed from its portfolio in the medium term, given that it has now placed its focus on hotel management.

Strategy

Both NH and Meliá, whose strategy at the beginning of the crisis involved signing the highest number of low value transactions, is now seeking out juicier, more selective deals. Thus, last year, Meliá joined forces with the fund Starwood Capital to create a company to which it transferred seven hotels worth €176 million. The chain owned by the Escarrer family, which holds a 20% stake in the new company, will manage the hotels for 15 years. Moreover, it also sold the Calas Mallorca complex, which has 875 rooms, for €23.6 million.

Unlike NH and Meliá, which have chosen to replicate the Anglo-saxon model and reduce their real estate risk, other chains such as Iberostar and RIU are continuing their commitment to own their properties and so their divestments are happening in dribs and drabs. In 2014, RIU sold the Hotel Waikiki in Gran Canaria for €24 million and it sold Hotel Olivina in Lanzarote to Mazabi, which Iberostar now manages under its Olé brand. Last year, Mazabi also acquired two Iberostar hotels (the Santa Eulalia and the Costa del Sol) for €60 million.

Meanwhile, Iberstar’s last known divestment was made in 2013, when it transferred a hotel in Mallorca through a finance leasing operation. When that contract terminates, it will recover the ownership of the property, which it is continuing to manage.

In 2016, the experts expect that NH and Meliá will continue to carry the baton, but that there will not be any major operations, since their deleveraging has now been reduced. NH’s debt decreased by 16% between 2010 and September 2015. Meanwhile, Meliá’s debt, which exceeded €1,000 million in 2011, had fallen to €840 million by September (2015).

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Caja Madrid’s Former HQ Is Up For Sale

5 November 2015 – Cinco Días

The former headquarters of the Caja Madrid is up for sale. La Fundación Montemadrid has engaged Irea to search for a buyer for the historical building, located a short distance from the Puerta del Sol in Madrid.

La Fundación Montemadrid, formerly known as ‘Fundación Obra Social y Monte de Piedad de Madrid’, plans to sell the whole property, excluding the premises where Monte de Piedad undertakes its activity, which will be made independent from the rest of the building. In total, the property has a surface area of 25,000 m2, which maybe used as a hotel, retail or office space.

Sources in the market consider that it is likely that the building will be converted into a “luxury five-star” hotel, which may also include some retail space.

If the building is converted into a hotel, then it would be highly coveted by international operators, at a time when Spain is under the spotlight thanks to the decision by Four Seasons to operate the hotel in the Canalejas Complex, and the purchase of the Ritz by Mandarin and Olayan. Meanwhile, in the Plaza Mayor, the Portuguese group Pestana is planning to open a five-star hotel in the Casa de la Carnicería.

Domestic and international investors, both hotel chains and investment funds have already expressed their interest in the property, which could represent the gateway into Madrid for franchises such as Hyatt, Kempinski, Hilton, W and Shangri-La. The future hotel would have around 200 rooms, as well as terrace space measuring 3,000 m2, one of which would be on the roof, with panoramic views of the city. The price of the property could exceed €100 million, and the buyer would also have to factor in the cost of the refurbishment.

No architectural protection

One of the features of the property is the lack of architectural protection, with the exception of the baroque doorway that overlooks the Plaza de las Descalzas. This makes the building a unique opportunity in the centre of the capital, according to market sources, vis-à-vis the Canalejas project, which is being developed by Villar Mir, whose construction has been unblocked this week by the courts, and Edificio España, acquired by the Chinese group Wanda, which had requested permission to dismantle the protected façade of that building brick by brick, to then rebuild it. That request was rejected by the Local Historical Heritage Commission of Madrid. Market sources believe that the operation could be closed by the end of this year or the beginning of 2016, and that the property, if it does end up being converted into a hotel, would open its doors in 2018, after the Four Seasons.

Original story: Cinco Días

Translation: Carmel Drake