Tag: Marriott

AC Hotels & Sanahuja Family To Re-Open Hotel Illa In August

19 June 2015 – El Economista

The formar Hotel Husa Illa in Barcelona will open its doors again on 1 August, but it will do so under the AC Hotels brand, owned by Marriott. The company, led by Antonio Catalan, has signed a rental agreement with the Sanahuja family, which owns the property (closed since March).

With this opening, AC Hotels takes its total number of hotels in Barcelona to seven, and it expects to continue to grow there in the short term. “Barcelona represents a clear target for the group. We are currently analysing several transactions in the city, but the truth is that it is difficult to find what we are looking for”, explains Catalan.

The new hotel, located in the L’Illa Diagonal shopping centre, will be “the chain’s best hotel in Barcelona”; €5.5 million has been invested on a comprehensive reform of the building.

Following this facelift, the hotel will have 108 rooms (all measuring at least 45 m2), several suites, a gym and three meeting rooms, amongst other facilities.

Crisis at Husa

Before closing its doors, the property was managed by the hotel chain Husa, which is currently facing financial difficulties, since several of its companies have filed for bankruptcy. In fact, at the beginning of this month, the company chaired by Joan Gaspart, presented a proposed agreement, which raised the possibility of repaying its debts through the transfer of some of the assets it still manages.

This crisis was reflected at L’Illa, where the chain accumulated unpaid rent and the hotel was returned to its owners, after an eviction demand was filed. Its closure resulted in the dismissal of 26 employees, who all received severance pay. Nevertheless, Antonio Catalán says that AC Hotels has hired at least ten of the former employees to work at the new hotel, under the terms of the agreement made at the time.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Hilton To Double Its Presence In Spain In 3 Years

14 April 2015 – Expansión

Growth / The US hotel giant, which is the second largest chain in the world, operates eleven hotels in Spain and is now backing its own growth in Madrid, Barcelona and Sevilla.

Hilton is redoubling its commitment to Spain. The US hotel giant, which is the second largest chain in the world by size (with 4,115 properties and 678,630 rooms at the end of 2013, according to the ranking published by Hotels magazine) manages nine hotels in Spain (66% through franchise agreements).

In addition, Hilton owns two other hotels, which are due to be incorporated into its network imminently, including the Reserva del Higuerón complex (in Málaga). Hilton will take over the reins there this summer and will thereby return to the Costa del Sol after (an absence of) more than 40 years.

“Our model is based on management; investment is undertaken by a partner, and it has been difficult to finance projects in Spain in recent years, but now the market is starting to open up and we have always been very interested in it”, says Simon Vincent, President of Hilton in EMEA (Europe, Middle East and Africa) and a member of the chain’s Board of Directors.

“The market in Spain is very fragmented, but we believe that opportunities exist for refurbish existing hotels and incorporating them into our network; furthermore prices are beginning to recover”, he adds.

In terms of the numbers, Vincent’s objectives are clear: “Doubling our size in Spain in two or three years would not be unreasonable, since that is what we have done in Turkey”. In Europe alone, Hilton operates 353 establishments and will incorporate a further 447 hotels (into its network) over the next three years. Barcelona and Sevilla are both on its priority list, but its primary focus in Spain will be on Madrid. “We were the first international brand (in Madrid), when we opened the Madrid Castellana Hilton in 1953 (today the Intercontinental) and the capital city is a high priority for the group and all of its brands”, he says.

At this stage, a priori, Hilton has ruled out forming an alliance with a local partner to accelerate its growth, like Marriott did with AC Hoteles in 2010.

Market consolidation

Vincent is very familiar with the travel sector; he has two decades of experience working for groups such as Opodo – today part of the eDreams Odigeo group – and Thomas Cook. He considers that if Spain lacks a large hotel group of its own, then “that is because the market is regional with strong (local) brands, which is precisely one of its strengths”. Nevertheless, “over time, there will be consolidation in the industry and the tour operators will want to participate and control the experience they offer their customers”.

In terms of the emergence of Socimis (Sociedades Anónimas Cotizadas de Inversión Inmobiliaria or Listed Real Estate Investment Companies), which are similar to REITs in the USA, the executive belives that “they may help to professionalise the sector, because that is how the funds that invest in hotels work”.

In his opinion, “the key (to success) in the hotel sector is size at the global level. For Hilton, the most important objective is not to have a presence in as many countries as possible, but rather to bring the greatest number of customers as possible to those countries through our (its own) system”. This is demonstrated by its loyalty program, which has more than 40 million users.

With 12 brands, Vincent argues that Hilton’s success is “based on our ability to convert revenues into profitability and growth, because our brands are in very high demand”. Thus, 19% of the hotels that the chain will open around the world over the next few years will bear one of the Hilton’s own brands. Nevertheless, the door is open to new brands as well. “We think that there is still space (in the market)”.

Over the medium term, Hilton’s route map includes increasing its scale and enhancing its geographical diversification and the appeal of its brands, as well as promoting the digitalisation of its content, and expanding its distribution channels.

Hilton recorded revenues of (US)$10,502 million and profits of (US)$673 million in 2014 and predicts further growth again this year, both at the operational level, as well as in terms of its share price, which is currently trading at $30.38/share. According to Vincent, “we are very happy with our IPO, the foundations of our business are solid and the market acknowledges that”.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Mandarin Oriental Enters The Bidding War To Buy The Ritz

12 February 2015 – Cinco Días

A new chapter has begun in the bidding war to buy the Ritz in Madrid, one of the most emblematic hotels in the capital. The property has been on the market for almost two years, but may have a new owner in a matter of days. Mandarin Oriental, one of the largest Asian luxury hotel chains, has set its sights on the hotel, which is currently controlled by Orient-Express and Omega Capital, the investment company owned by Alicia Koplowitz.

The owners of the Ritz have been looking for a buyer for the property for almost two years, which, despite its prime location and the power of its brand, has lost much of its appeal in recent years, due to a lack of investment. This has meant that all of the operators that have shown an interest in acquiring the property have identified the need to undertake a major refurbishment, which has played against a quick sale.

Despite that, Orient-Express, now known as Belmond, and Omega have remained steadfast in their price expectations, which led Marriott to placing an offer for €130 million on the table; the transaction fell through at the last minute, when it seemed like every blessing had been given. The problem was that, by adding the purchase cost to the amount required to reform the property, the buyer considered that the final result was infeasible.

Fairmont took over the reins in the bidding process during the second half of last year, by offering €120 million for the property, whose refurbishment it valued at around €60 million. The luxury hotel chain analysed all kinds of options to try to close the transaction successfully, ranging from reselling the rights of the Ritz brand to Marriott – which would have allowed its rival to use the brand throughout the Iberian Peninsular – to addressing the possibility of operating the asset under its second brand, Raffles.

But, according to several market sources close to the negotiations, Fairmont has now also withdrawn from the bidding, leaving the way open for Mandarin. The Asian player may end up closing this complex transaction, mediated by JLL, through an agreement whereby it takes on a management role, but which, in any case, will allow the Asian chain to establish itself in Madrid, a market that it has been analysing with much interest for over a year.

After acquiring numbers 38 and 40 on the exclusive Paseo de Gracia in Barcelona, overlooking Casa Batlló, the Hong Kong firm opened its first property in Spain at the end of 2009. With this investment now well established, the Asian hotel chain has plans to grow in the country, both in Barcelona and, above all, in Madrid.

Luxury hotels arrive in Madrid

The emergence of Four Seasons in the capital, which has reached an agreement with OHL Desarrollos to open the luxury Canalejas complex, has been a catalyst for the Madrilenian hotel market. The large international chains have set their sights on the city and deals are expected to be signed for properties such as the Hotel Villa Magna, the Hotel Miguel Ángel and the old headquarters of Asturiana de Minas; without forgetting the Edificio España, which was acquired by the Chinese Group Dalian Wanda.

These deals will follow others agreed in the last few months, such as the opening of Barceló’s four star hotel in the Torre de Madrid, the conversion of the Hotel Asturias into a boutique hotel and the transformation of the historical Tio Pepe building into a 5 star hotel.

Omega Capital and Belmond acquired the Ritz twelve years ago for €125 million. The strong impact of the economic crisis on the hotel sector in the capital, with declining tourist numbers and low prices, in addition to the cost of the pending renovation of the emblematic hotel, has taken its toll on the brand, for which an impairment loss of €12 million was recorded in 2013, the last full period for which official results are available.

Original story: Cinco Días (by R. Ugalde)

Translation: Carmel Drake

Hotel Villa Magna In Madrid Up For Sale

16 January 2015 – idealista news

The Spanish hotel sector is on the radar of investors. The combined effects of the growth in tourism, falling price of oil and weakness of the euro bodes well for the performance of the sector; and sellers do not want to miss out on the opportunity. In the luxury segment, not only are the Ritz and Miguel Angel Hotels in Madrid up for sale, so too is the Villa Magna. Its owner, the Portuguese businessman Pedro Queiroz Pereira has expressed interest in selling the property, although the bids received so far have fallen below expectations.

Although no official sales mandate has been issued yet, the Portuguese firm Queiroz Pereira is open to offers for the purchase of Villa Magna, located in the Salamanca neighbourhood of Madrid. According to market sources, the selling price is close to €130 million, a price that no investor has been willing to pay so far.

Financial sources say that the price is inflated and that the hotel is not worth more than €90 million. Idealista.news contacted the owner of the property who declined to comment.

The Portuguese holding company, which also owns the Ritz Hotel in Lisbon, purchased the Villa Magna in 2001 from a Japanese family, the Shirayamas. Six years later, in 2007, it decided to undertake a “facelift” of the hotel, which was closed for 14 months whilst renovation work was completed. Sodim, a subsidiary of the Queiroz Pereira Group (and owner of Semapa, the main industrial group in Portugal) invested around €150 million on the hotel acquisition and remodelling work.

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Hotel Villa Magna currently has 150 rooms of between 30m2 and 290m2, as well as various conference rooms, meeting rooms and a garden for outdoor receptions and dinners. It also has a wellness club with a sauna and Turkish bath.

Hotels, an investor target

In 2014, investment in hotels amounted to €1,081 million, up 37% on the previous year, to reach levels similar to those recorded before the crisis. The following transactions were amongst those that took place in the 5 star segment: the Hotel Renaissance in Barcelona was sold by Marriott International to the Qatar Armed Forces for €78 million; the Hotel Intercontinental in Madrid was sold to the Katara Hospitality Fund for around €60 million; and the Hotel Meliá La Quinta in Marbella was also sold.

Last year was also significant because more transactions were recorded in the holiday hotel sector than in the urban sector. Transactions included the acquisition of the Guadalmina Hotel in Marbella (4 star) and the Meliá Jardines hotel in Teide, Tenerife (also 4 star) by Socimi Hispania.

The arrival of the Four Seasons chain, a boost for the sector

The arrival in Spain of the luxury hotel chain Four Seasons has increased the level of interest in the renovation of historic properties, such as the Miguel Angel and Ritz Hotels in Madrid, which are currently up for sale. This foreign chain expects to open its first property in the Plaza de Canalejas, Madrid in 2017. It will be the first Four Seasons hotel in Spain.

Original story: idealista.com (by @pmartinez-almeida and tânia ferreira)

Translation: Carmel Drake

Fairmont Makes For Madrid’s Ritz As Marriott Withdraws From the Bidding

23/09/2014 – Expansion

A new bidder joined the auction of Hotel Ritz in Madrid. As Marriott backtracked on its €130 million bid for the one of the most beautiful hotel jewels in Spain, Fairmont barged in to compete for it. The property belongs to Omega Capital of Alicia Koplowitz and to Orient-Express, holding 50% of it each.

In 2003, the owners bought the establishment for €125 million from Le Meridien.

In May, the partners hired JLL (former Jones Lang LaSalle) to look for a new purchaser in the middle of fever caused by the arrival of Four Seasons to the capital. The high-end chain from Canada is going to open a hotel inside the Canalejas complex in 2017.

The move convinced many international chains to invest in Madrid. For instance, such brands as Mandarin Oriental, Hyatt, Marriott, Hilton or InterContinental are already eyeing the market. Therefore, the bidding for the Ritz establishment was expected to be more fierce.

Marriott outbid all the competitors with its €130 million offer ,however in the last moment the board of directors of the famous chain opted out. Purchase of the 137-room and 30-suite hotel also means a €40- to 50-million investment in its refurbishment.

Fairmont was officially founded in 1907 but its roots reach the year 1885. In 1999, the chain fell in hands of a hotel branch of Canadian Pacific Railway but its brand name was saved. In 2006, Fairmont joined Raffles and Swissôtel in a holding, called FRHI, managing 110 hotels in Europe and U.S.A. Four years later, Qatari Diar paid €847 million for a 40% stake at the holding and offered buying the share of Colony Capital.

The Qatari fund acquired Hotel Vela for €200 million and, at the beginning of this year, Hotel Renaissance for €78.5 million from Marriott, both properties found in Barcelona.

Hotel Ritz itself is a collateral for the loan that its owners borrowed from Eurohypo and which was included in the mega-NPL sale called the Octopus Project, finally sold to U.S. fund Lone Star.

 

Original article: Expansión (by Y. Blanco & J. Zuloaga)

Translation: AURA REE