Hoteliers Warn of Losses of €124 Billion if Closures Continue until December

The progressive opening of the sector by December would result in losses of €124 billion. In that case, the recovery of the industry would not arrive until the first four months of next year.

Spanish hoteliers are warning that keeping their establishments closed until the end of the year is “inconceivable ” and that this would mean a loss of competitiveness for the sector. “In Spain, the progressive opening of the sector by December would result in losses of €124 billion. That would be devastating for the sector,” explained Gabriel Escarrer, CEO of Meliá, according to Expansión.

For Escarrer, this scenario assumes that the recovery of the industry would not come until the first four months of next year, meaning it may “lose out” on Christmas 2020 and Easter 2021, both key dates in the hotel industry.

Millenium Acquires Hotel Meliá Bilbao for €49.2 Million

8 November 2019 – Millenium Hotels has acquired the Meliá hotel in Bilbao for 49.2 million euros, according to a note sent to the Alternative Stock Market (MAB).

The hotel is located between the Euskalduna Palace and the Guggenheim, in the Basque Country. The previous owners of the asset included the Riberas family, which controls Gestamp. Meliá will continue to manage the hotel business.

Original Story: Cinco Dias – A. S.

Adaptation/Translation: Richard D. K. Turner

Meliá, Barceló and NH Implement Asset Light Model

2 September 2019

The major hospitality groups Barceló, Meliá and NH are taking advantage of the fervour in the Spanish real estate market to sell off some of their real estate holdings to interested funds and socimis. Many of the firms are implementing an asset rotation policy, shedding capital-intensive investments and looking to switch to a policy of hotel management and leasing.

To this end, Meliá, Barceló and NH have sold hotels worth approximately 500 million euros over the last two years as a wave of new investors, many socimis, have entered the market. Meliá began its asset-light policy a decade ago, and it is looking to increase the percentage of its EBITDA from its current 32% to 50% by 2024. In 2019, it accounted for just 2%.

Barceló is following the same sort of strategy, selling a hotel in Marbella to Hispania for €19 million. In 2017, Barceló sold 24% of its hotel sector Socimi Bay for €172 million, holding into long-term leases on the hotels.

NH, now part of the Thai group Minor, sold the NH Collection Barbizon Palace in Amsterdam to the German asset manager Deka for €156 million earlier this year, while also maintaining a 20-year lease on the property. NH has assets valued at €2.1 billion, including 350 hotels, with 54,000 rooms. Of those, NH only owns 76. The rest are leased or managed by the hospitality group.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

Blackstone’s Spanish Hotel Portfolio is Worth €3.5bn

3 June 2019 – La Vanguardia

In recent years, the US fund Blackstone has invested €3.5 billion in the Spanish hotel sector through its specialist manager HI Partners, making it the largest hotel owner in Spain and the third largest in Europe after the Swedish firm Pandox and the French group Covivio.

HI Partners was created four years ago and owned 17 establishments by the time Blackstone acquired it in 2017 for €640 million. A year later, the US fund launched a successful takeover bid for the Socimi Hispania, which gave it control of another 45 hotels.

According to Alejandro Hernández-Puértolas, Partner and CEO of HI Partners, the firm now owns 62 establishments in Spain, with around 18,000 rooms. By region, 53% of its rooms are located in the Canary Islands, where it has 25 establishments, 26% are in the Balearic Islands (18 hotels) and the remaining 21% are located across the Peninsula above all in the Costa del Sol, Valencia and Cataluña.

HI Partners is headquartered in Barcelona and has offices in the Canary and Balearic Islands. It employs 100 professionals and its hotels are managed by 19 different operators including Marriott, Barceló, Hilton, Melià and Ritz Carlton.

Original story: La Vanguardia (by Rosa Salvador)

Translation/Summary: Carmel Drake

Meliá Earned 13% More in 2018 but its Revenues Fell by 1.5%

1 March 2019 – Expansión

Meliá ended the year with a slight decrease in revenues (1.5%) to €1.83 billion, which it blamed on a deceleration in the tourism sector. Nevertheless, its net profits rose by 13% to €140 million.

The decrease in revenues was due above all to the impact of the devaluation of the US dollar in the America region during the first quarter of the year – one of the most important for the company in the region – and the closure of several hotels for renovation in Puerto Rico and the Caribbean. There was also a slow down in the Mediterranean and Cuba.

Despite the slow down in turnover, the company’s EBITDA increased by 7% to €326 million, following the sale of three hotels to the Socimi Atom in the summer and due to an appreciation in the value of its assets. Excluding those gains, Meliá’s EBITDA in the period increased by 0.9% to €307 million (…).

Looking ahead to 2019, Meliá is cautious regarding the evolution of the markets in America and the Canary Islands, but, by contrast, is optimistic about the markets in Europe, the Middle East and Africa (EMEA), where it expects RevPAR growth of low to average digits, primarily due to the strong outlook in Continental Europe, as well as in Spain. Specifically, it forecasts a recovery in Barcelona, Madrid and Sevilla.

Original story: Expansión (by R.A)

Translation: Carmel Drake

Xeresa Golf Completes a €4.7M Capital Increase

12 December 2018 – Alicante Plaza

The company that owns the Villaitana hotel complex in Benidorm, Xeresa Golf, has completed the capital increase that it launched in August, after emerging from creditor bankruptcy by fulfilling the agreement and acquiring the plot on which the resort was constructed, which was initially occupied on a concession basis. Thus, as reflected in the Official Bulletin of the Mercantile Registry (Borme) of Alicante on Tuesday, the company has subscribed a €4.7 million capital increase (the total amount), and so the resulting subscribed share capital amounts to €9.2 million, more than twice the figure before the operation.

It is not the first capital increase that Xeresa Golf has undertaken in its checkered history. In recent years, the firm founded at the time by the entrepreneurial Cremades family from Gandía, has resorted to “accordion operations” to wipe its debt, and to add or expel shareholders (the firm was created with several representatives of the jet set amongst its minority shareholders), and, on the penultimate occasion, to articulate the entry of its current majority shareholder, the hotel management company HI Partners, which owns 80% of its share capital.

Nevertheless, this new increase has basically been covered by its current shareholders (the hotel company owned 80% and the Cremades held onto 20%), according to sources. In fact, the shareholders of Xeresa Golf had preferential subscription rights, which, according to the same sources, they exercised. HI Partners acquired the majority of the company in 2017 (…) by offsetting the loan that the firm owned by the Cremades family held with Banco Sabadell, which was the owner of the hotel management platform at the time (and which was created specifically to manage the hotel assets that the entity had had to assume).

Just a year ago, the bank sold its hotel division to the US fund Blackstone, which is the ultimate owner of the 17 hotels that comprise the portfolio of HI Partners, including the asset in Benidorm (…).

Owner of the plot

This new capital increase comes shortly after Xeresa Golf has become the owner of the plot on which Hotel Villaitana stands (two four- and five-star hotels and several golf courses) in the PEDUI of Terra Mítica. Xeresa Golf submitted the best offer in the auction for the plots convened by the Consell, although in reality only two bids were made and the other one came from HI Partners. In fact, the capital increase was carried out for a similar amount to the price offered by the hotel owner to acquire the land on which it stands: €4.8 million plus taxes.

Similarly, the company that owns the hotel complex managed by the chain Meliá has overcome another milestone in the last year, that of definitively emerging from the creditor bankruptcy that it entered in 2012 (…).

Original story: Alicante Plaza (by David Martínez)

Translation: Carmel Drake

Meliá Finishes a €30M Renovation of its 900-Room Mega-Complex on the Costa del Sol

10 December 2018 – Diario Sur

Following the comprehensive renovation of the Don Pablo, Don Pedro and Don Marco Hotels, Meliá is preparing to change the brand to Sol Torremolinos Resort, with almost 900 rooms.

Just a few handcrafted details, commissioned in the 1970s, remind visitors of the origins and essence of the hotels Don Pablo, Don Pedro and Don Marco. They have undergone a comprehensive transformation following a €30 million investment to relaunch and consolidate them as the largest hotel complex in the Costa del Sol. The renovation work has taken three years and the only improvements left to make now, during the winter months, are in the spa located in the Don Marco Hotel, which is closed for the season, and in the indoor swimming pool, one of nine in the complex, explained Jaime Floyer, Director of Sol Don Hoteles. He added that Meliá is now preparing to change the brand to be renamed Sol Torremolinos Resort.

The three-hotel complex has modern façades, terraces that look like they end in the sea, a beach club and seven conference rooms, which have been renovated and equipped with the latest technology and with capacity for up to 500 people. It also has bedrooms and completely renovated common areas, plus 50,000 m2 of gardens and swimming pools, where the new work has improved the flow of clients from one hotel to another, to create the largest hotel complex on the Costa del Sol. “It is a resort that is looking to the future, we employ 210 people on average and we have a great diversity of nationalities amongst our loyal client base, with cases of tourists who spend up to five months here in the winter”, explained Jaime Floyer.

The new Sol Torremolinos Resort, on the beachfront, accounts for 5% of the hotel supply in Torremolinos, the town that is first in the ranking on the Costa del Sol by volume of hotel beds. This complex also has the advantage that it has an infrastructure that allows it to position each establishment in different and booming segments. In this way, Don Marco, the youngest of the hotels, inaugurated in 2004, as a four-star, 120-room property, is marketed as an establishment recommended for “adults only”.

By contrast, Sol Don Pedro is more focused on families (…); it opened to the public in 1971 and currently offers 344 rooms (…). Meanwhile, Don Pablo, with 442 rooms, is the big brother of the business (…) and opened its doors in 1974 (…).

In terms of the profile of clients, 25% are domestic, and the rest are from overseas, with Brits (24%) and Belgians (15%) standing out in particular (…).

Original story: Diario Sur (by Pilar Martínez)

Translation: Carmel Drake

Atom Makes its MAB Debut with a Stable Share Price

27 November 2018 – Eje Prime

Atom completed its first day on the MAB without any variation in its share price. The Socimi specialising in the hotel sector and owned by Bankinter made its debut on the Alternative Investment Market (MAB) with no variation in its debut price of €10.70 per share.

That is the amount that the company set for its stock market debut and which values the company at €264.76 million. The Socimi started the day with a slight rise of 0.9%, to reach €10.80 per share, but ended trading flat.

Atom operates on the stock market with the code YAT and its shares are traded through the fixing system, whereby prices are fixed twice a day, a 12 noon and 4pm.

Atom owns 23 hotels with a total accounting value of €439.7 million, including the AC Marriott in Palma, Sevilla and Álava, as well as the Meliá hotels in Sevilla and the Canary Islands. The group is the 20th company to join the MAB in 2018 and the 67th Socimi to debut on the Spanish stock market to date: 62 Socimis operate on the MAB and five operate on the main stock market.

Original story: Eje Prime

Translation: Carmel Drake

The Sale of Hotel Sol in Puerto de Naos Generates €600k for La Palma’s Municipal Coffers

27 October 2018 – El Día

The sale of Hotel Sol located in the tourist town of Puerto de Naos, in Los Llanos de Aridane (La Palma, Canary Islands) generated almost €600,000 (specifically, €597,215) for the municipal coffers by way of profit, according to reports presented in the most recent plenary session.

The sale was undertaken as part of a larger operation. Specifically, the hotel chain Meliá Hotels International sold three hotels in Sevilla, La Palma and Fuerteventura for €73.4 million to the real estate company Atom Hoteles Socimi, although it continues to operate them under a rental arrangement.

The one-off income obtained by the Town Hall was one of the arguments presented by the spokesman for Izquierda Unida, Felipe Ramon, to oppose the elimination of the tax, which each year generates around €100,000 for the municipal coffers. The case of Hotel Sol was exceptional, although it is also true that “if this tax had not been in force, the Town Hall would not have collected a single euro for the operation”, as the leader of IUC indicated.

The left-wing party rejects not only the suppression of the tax on property gains but also considers the decrease in the rate of IBI, approved in the plenary session, to be premature.

IUC considers that lowering the IBI “without first conducting a study and together with the other fiscal ordinances” proposing its modification “now when it was not scheduled for 2018”, represents “the start of the election campaign for the PP” (…).

Original story: El Día

Translation: Carmel Drake

Hispania to Convert the Café La Granja Building in Bilbao into a Hotel

10 October 2018 – El Correo

Thanks to the significant investments carried out in recent years, the investment fund Hispania has become the largest hotel group in Spain. It has outperformed traditional companies in the sector such as Meliá, HI Hoteles and Hoteles Globales in terms of the number of establishments and rooms. At the height of its expansion phase, boosted at the end of last year by the purchase of the Alua chain – which saw it acquire seven resorts in the Canary Islands and the Balearic Islands for €165 million – it has set its sights on Bilbao. Just a week after another high-profile fund, the Madrid-based Millenium Group announced its intention to convert Banco Santander’s headquarters on Gran Vía into a luxury hotel, Plaza Circular is now going to witness the transformation of one of the Bizcayan capital’s most iconic buildings: the site that formerly housed Café La Granja.

The hostelry establishment, which started life on 31 July 1926 and which was acquired by the real estate firm Navarra Fitbox two years ago, has been closed since 8 February 2017 when, unexpectedly, it pulled down its shutters for the very last time. The insurance company Helvetia sold the property for almost €7.5 million. After 90 years of uninterrupted activity, the historical café has only re-opened its doors since then on a sporadic basis to host one-off events of a cultural nature, such as book fairs. The offices and insurance companies that used to occupy the upper five floors have been evicted, starting back in 2010 (…).

Hispania is going to strengthen the hotel supply in Bilbao, which is experiencing a genuine frenzy, with the planned opening of seven new properties over the medium term. The fund has been planning its debut in the town for a while, but its intentions have always focused on this area, which will draw a new Bilbao with the arrival of the fashion giant Primark and the launch of the Regional Government’s international entrepreneurship centre in the former BBVA tower, which was sold for €100 million two weeks ago. The arrival of the AVE and the strong commercial positioning have pushed up prices considerably in this area. Like in the case of the building work to be carried out on the site of Santander’s former headquarters, the transformation of La Granja will have to be approved by the Town Hall’s Heritage Committee, which has not yet assessed the project, given that it is an artistic building. That procedure may be completed this month (…).

Original story: El Correo 

Translation: Carmel Drake