Sarasola Increases Stake In Room Mate To 70%

7 July 2016 – Expansión

The President of Room Mate, Enrique Sarasola, has purchased an additional 20% stake in the hotel chain that he founded in 2003, allowing him to take control of 70% of the share capital. The remaining 30% is held by Sandra Ortega, through the company Rosp Corunna.

Specifically, Sarasola has signed a contract, through his company Tafay 2000, to acquire the 14% stake controlled by Basphon Investment and the 6% stake held by Berbaz Familiar. Basphon Investment, a company owned by Pedro Agustín del Castillo, President of Binter Canarias, acquired its stake in Room Mate in 2009; meanwhile Berbaz Familiar, an investment vehicle owned by the Sanzol family, has been a shareholder since 2004.

This change allows the company to address its business plan for 2015-2019 with a more stable shareholder base, who are more focused on the “day to day” running of the company, explains Sarasola. The President of Room Mate and Bemate.com says that Basphon and Berbaz were “more financial” investors, who have identified an opportunity to exit the company and achieve a good return.

Forecasts

The Director considers that this movement is yet another example of his confidence in the company and he highlights the results achieved in recent years. Based on the company’s forecasts, Room Mate will close 2016 with a turnover of €68.3 million, which represents an increase of 22% with respect to 2015. The hotel chain generated revenues of €25.7 million during the first five months of the year, 48% more than in 2015.

Room Mate’s hotels recorded an average occupancy rate of 85.8% during the five months to May 2016, whilst its RevPar (revenues per available room) amounted to €127.30, 13.3% higher than during the same period last year.

Room Mate Hotels owns more than 1,500 rooms, has a presence in six countries and twelve cities and will open eight new hotels over the next ten months. In 2016, 65% of Room Mate’s revenues will be generated overseas.

Sarasola predicts that this summer will “break all records” and he highlights the strong performance of domestic tourism. In any case, the Director emphasises the need (for Spain) to form a new Government and he expressed his “concern regarding the Ministry of Tourism because since the Minister left, it has not been operating with the necessary degree of transparency”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Which Hotels Are Most Sought After By The Socimis?

22 June 2016 – Hosteltur.com

Javier Arús, Head of Investments at Hispania, spoke at a conference last week entitled “Spain: Hotspot for international hotel investment”, organised by the Real Estate Alumni Club of Instituto de Empresa at the IE Business School.

There, he highlighted that the number of operations involving asset repositionings are on the rise, such Hispania’s acquisition of the Ibizan hotel chain San Miguel last week for €32 million. That deal involved the purchase of three mid-range hotels in Ibiza, where significant investments will be made to reposition the properties and convert them into premium assets. This type of operation, “with hotels in very attractive destinations and excellent locations, allows us to develop new products, almost from scratch, and obtain very significant resturns on our investments”, said Arús.

The Head of Investments at Hispania also spoke about the contractual relationships that exist between the Socimi and the operators of the hotels it has acquired to date. He stressed his firm’s preference for mixed lease contracts, which guarantee a minimum level of rental income and offer a variable rental income component to complement the fixed revenue stream. (…).

Meliá’s commitment

Meanwhile, Ángel Luis Rodríguez, Vice-President of Portfolio Management at Meliá Hotels International confirmed that the hotel chain is not currently entertaining the possibility of structuring its assets under a Socimi framework. Rather, the firm has committed itself to the creation of a very specialised real estate manager within the existing company structure, without any need to legally separate the hotel manager’s assets. Moreover, it is focusing its efforts on investing in technology and in core assets. 80% of the hotels in its portfolio operate under management frameworks.

Rodríguez agrees with Javier Arús that there are excellent opportunities to be had from “measured” repositioning of vacation hotel assets. By way of example, he described Meliá’s Calviá Beach project and highlighted the increase in value and quality that it has represented for a tourist destination such as Magaluf. There, the chain, which operates 3,200 rooms, has adopted a deliberate strategy that has allowed it to increase RevPar (revenues per available room) in the area by between 70-80% in a short period of time and with a very limited Capex investment.

Its brand-focused strategy is allowing the company to “enjoy a ‘virtuous circle’: brand strategy + investment in repositioning = increase in ARR (average room rate) and RevPar – Greater client satisfaction and loyalty – Increase in asset value – Better segmentation of customers – Higher direct sales – Higher Returns”.

The three speakers (Javier Faus, President of Meridia Capital also spoke), all experts in the hotel sector, agree that Spain may be able to maintain the level of growth in the hotel sector, if its supply is renewed and updated to reflect the expectations of international tourists, who are genuinely very fond of our country. They also highlight the importance of professionalising the operation of assets and investing in technology to deepen client knowledge and loyalty.

Original story: Hosteltur.com

Translation: Carmel Drake

Overnight Hotel Stays Rose By 12.4% In February

28 March 2016 – Expansión

Hotel establishments recorded a total of 16.3 million overnight stays last month, up by 12.4% compared to February 2015.

During the first two months of 2016, overnight hotel stays grew by 10.4% with respect to the same period last year, according to figures released on Wednesday by the National Institute of Statistics (INE).

The increase in February was due to a 13.3% increase in overnight stays by non-resident visitors to Spain and a 11.2% increase in stays by residents. In addition, the average duration of stays in February amounted to 2.9 nights per user.

On the other hand, during the second month of 2016, 49.1% of all available places were occupied, which represented a YoY increase of 7.6%. Specifically, the occupancy rate on the weekend grew by 6.4%, to reach 57.2%. By region, occupancy rates in the Canary Islands were the highest, with an average of 77.9%, followed by Madrid (53.4%) and the Balearic Islands (48.9%).

The average daily rate (ADR) per occupied room amounted to €76.60, up by 7.9% compared with February 2015 and the revenue per available room (RevPar) amounted to €43.10, up by 16.5%.

By category, the average rate was €171.20 for five-star hotels, €80.70 for four-star hotels and €57.90 for three-star hotels.

Original story: Expansión

Translation: Carmel Drake

One Shot Wants To Expand To 15 Hotels, In Europe & USA

8 June 2015 – Expansión

Geographical diversification / One Shot Hotels, which has just signed its third project in Madrid, is evaluating an IPO on MAB in the medium term as it looks to open a hotel in New York.

One Shot Hotels is quickening the pace and looking towards Europe and the USA. The chain led by Luis Felipe Mendieta and owned by the Solís family is, despite its young age, the new star in Madrid’s hotel market. In just two years, One Shot has signed three projects in the capital. The latest one, the conversion of an office building into a hotel on Calle Fortuny, was completed a few weeks ago.

“One Shot began as a university start up, with several 30-bedroom hotels in Andalucía”, says Luis Felipe Mendieta, the CEO of One Shot Hotels. After obtaining financial backing from the Solís family, the project made the leap to the Premier League, in Madrid: “We saw that there was very little differentiation; price was the only factor”.

To differentiate itself, One Shot put its commitment to contemporary art on the table, by converting its hotels into a dynamic platform for unknown artists. One Shot 23, a 42-room three-star hotel on Calle Prado (pictured above) was the company’s first property in the capital, which opened in 2013.

Since then, One Shot has invested €35 million in eight projects. Only two of its hotels are currently operational – Prado 23 and Recoletos – but this year, the firm will open nine establishments in Valencia, Sevilla and London – owned 50% with the Arab investor Riz Ali- and more hotels will be opened in Madrid and Barcelona in 2016.

In terms of its model, the chain mainly focuses on four-star hotels that have between 50 and 80 rooms. “And for the purchase and rental, the management is complicated because we do not generate sufficient critical mass”, according to Mendieta.

Spain – Barcelona, Bilbao and San Sebastián; UK – London; Italy – Rome; USA – New York, Los Angeles, Miami and San Francisco – are all on the radar… In numbers, “our objective is to double our size, to 15 hotels by 2020, and mainly concentrate on overseas expansion”.

At an operating level, the company closed 2014 with revenues of €3.5 million and a gross operating profit of close to 35% of turnover. Once the eight hotels in the pipeline have been opened, the firm expects to generate revenues of between €18 million and €19 million p.a.. The average daily rate (including VAT and commission) at the Hotel One Shot Recoletos, on Calle Salustiano Olozaga, is €135 – €105 in the hotel on Calle Prado – with an occupancy rate of 96% and with 75% of the guests coming from overseas. “So far in 2015, we have noted an increase in the average revenue per room (RevPar), which is not being driven by an increase in the occupancy rate, but rather by an improvement in prices”, says Mendieta.

(…)

Mendieta is considering an IPO on the MAB, but says that “it is wiser to wait until the entire project has been developed”. And he explains why: “It is more attractive (for us) than a Socimi, which forces you to distribute dividends, whereas what we want to do is reinvest, and that is the strategy we value for expanding into the market in New York, listing on the MAB or joining forces with a fund”.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

‘Melia Hotels’ Doubles Net Profit In Q1 2015 To €16M

13 May 2015 – Expansión

Melia Hotels International’s results are improving, driven (primarily) by the strength (of the recovery in the) Spanish tourism sector. The chain controlled by the Escarrer family increased revenues by 13.64%, to €358.9 million during the first quarter (of 2015). Its gross operating profit (EBITDA) improved by 13.52%, to €60.2 million, whilst net profit doubled, from €8.15 million to €16.17 million.

Melia attributed this progress to the good performance of the hotel business, in which RevPar (revenues per available room) increased by 12%. And the increase was not driven by the holiday segment alone, the RevPar of the urban business segment also rose, by 14.8%.

For the full year, the company expects the increase in RevPar to be in the high single digits. Melia experienced a 5% increase in demand in Spain during Semana Santa (Easter), which it expects will be maintained this summer. In the Mediterranean, reservations for the summer season are almost 15% higher than in 2014. During the year to March, the group had signed 14 new contracts. Melia’s share price increased by 0.04% on the stock exchange yesterday to €11.24 per share.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake