17/09/2014 – Expansion
An investment wave lands in Spain‘s greatest hotel chains. After years of self-constraint, RIU, NH Hotel Group, Barcelo, Iberostar, Palladium and Melia decided to prepare budgets for new projects amounting to €1.5 billion.
In the majority of the cases, the equity will be intended for existing hotel refurbishments and their expansion and then for the new projects.
Since the recession hit, more property-oriented chains like RIU, Iberostar and Palladium have been actively developing new hotels. Whereas the other, like Melia, Barcelo and NH have opted for different growth paths, such as management contracts, rentals and franchises.
Speaking of the amounts, RIU is planning to spend €300 million this year on purchases, construction and hotel renovations. In the last years, the chain focused on urban hotels and bought several establishments outside of Spain.
NH ranks the second with a 3-year investment plan assuming spending €225 million to increase its ADR (Average Daily Rate). Year-to-date, the company has totally overhauled two hotels in Madrid, one in Pamplona, another in London and one more in Berlin.
In line with the project, by the end of 2014, 40% of the investment will have been carried out. By 2018, over one hundred of hotels will have been modified with 50% of the budget intended for launching a new premium brand of the group, NH Collection.
Barcelo is going to spend €176 million on hotel repositioning in the Dominican Republic, Mexico, Barcelona, Fuerteventura and Cadiz, to name few places.
Also Iberostar does not want to lag behind and plans investing €100 million in its establishments on the Pacific and Atlantic coasts.
If it comes to Palladium, the chain decisively bets on Ibiza where it has opened two new hotels: the Ushuaia Towers and the Hard Rock, now representing the beacons of its portfolio.
Moreover, Palladium progresses at the refurbishement of a building situated in front of the Atocha station in Madrid which will open its doors as a hotel in 2015. Likewise, the hotel chain is waiting for permits to begin a macro-project on the Playa d’en Bossa beach (Ibiza) said to consume €350 million.
Meanwhile, Melia continues to implement one of its best projects on converting Magalluf (Palma de Majorca) in a reference European resort. The chain led by the Escarrers will spend €90 million more on refurbishment of a part of its hotels in Spain, Europe and America.
Original article: Expansión (by Yovanna Blanco)
Translation: AURA REE