Playasol Hotels Forecast Sales Growth Of 13% In 2017

24 April 2017 – Expansión

Three years after it rose from the ashes and was taken over by the venture capital fund Hiperion, Playasol Ibiza Hotels – whose portfolio contains more than 4,000 rooms – is planning to complete the refurbishment of its hotel stock and is preparing to make acquisitions and expand its business.

The CEO of Playasol Ibiza Hotels, Antonio Domenech, explained that, after the judicial and liquidation administration process, Hiperion took over the operation and management of Grupo Playasol, whilst the real estate company Sunparty Real Estate took control of the assets. From that point on, the shareholders implemented a business plan, which has just seen the completion of its third year.

“Although the fund’s initial intention was to create value and sell, at the moment, its vocation is more industrial. We are not considering a fast-selling scenario”, said Domenech, in an interview with Expansión.

The director explains that, in the framework of this commitment by the shareholders, Playasol is analysing opportunities for growth, both in the Canary Islands, as well as on the peninsula. “We are analysing operations in nuclei where there is a critical mass and in the holiday segment”. In this way, Playasol is evaluating opportunities in mature destinations in the Canary Islands, Costa del Sol and Levante. “We are focusing on the Spanish Coast and the islands”, he said.


Playasol, which closed last year with revenues of €69 million, up by 24.7% compared to the previous year, expects to increase its sales by 13% this year. The hotel chain employs an annual average workforce of more than 600, peaking at 1,200 workers in the high season.

“These results not only fuel the group’s growth prospects, they also endorse the current strategy based on the search for greater efficiency, reinvestment in assets and financial discipline”.

Domenech highlighted Playasol’s current “solvency”. “We have scrupulously fulfilled all of the objectives agreed with the unions, we have even created jobs and our relationship with the local administrations is excellent. We have very much been part of the solution to the problem”.

Hotel refurbishment

Domenech said that the company has invested more than €12 million renovating its establishments and that it plans to allocate between €16 million and €25 million to improve its other assets between now and 2018, “depending on what we managed to agree with the local administrations in terms of procedures and licences”. “This year we are refurbishing fourteen establishments, including the complete renovation of four. The hotels in our portfolio are in excellent locations, but the properties were built in the 1960s and 1970s and so they need intensive investment”. (…).

The group has 37 hotels and apartments in total (36 in Ibiza and one in Mallorca) plus four others that are not currently operational. “The aim is for them to be operational for the 2019 season”. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hotel Revenues Rise & Profitability Soars

16 August 2016 – Expansión

Meliá, Barceló and Grupo Palladium are registering occupancy rates of almost 90% in some of their star destinations and are also achieving double-digit growth rates in terms of tariffs.

The hotel chains are on a roll, with an improvement in sales, occupancy rates and prices this year, and they are getting ready to benefit from the good times that the tourist sector is enjoying to boost their profitability as well. In 2015, Spain broke its record once again in terms of the number of international tourists, with 68 million visits; and all indications show that this year the figure could reach 70 million. (…).

Specifically, Meliá, in line with the data disclosed in its results, forecasts an occupancy rate of almost 80% in Andalucía, where it also expects to see an 11% increase in prices. For the Levante region, the group expects an occupancy rate of 75% and a 10% increase in prices, whilst in Ibiza, it forecasts a 26% increase in occupancy rates and an almost 50% upturn in the average price – due to the repositioning of its hotels on the island. For the Canary Islands, the hotel chain owned by the Escarrer family estimates an occupancy rate of 80% and a price rise of 13%.

This archipelago is also proving fruitful for Barceló. The company expects to close the month of August with full occupancy and a historically high profitability. During the first few weeks of August, the occupancy rate on the islands averaged 90% and average room rates had increased by 12 points.

In the Balearic Islands, the occupancy rates for July and August are in line with last year, but average prices per room have risen by more than 11%. The group highlights its growth in Ibiza, where it will achieve an occupancy rate of 98% in the high season, with a tariff increase of 18%.

For the region of Andalucía, Barceló is maintaining a similar occupancy rate to 2015, with an increase in the price per room of 13%.

Meanwhile, Palladium is forecasting an average occupancy rate for its hotel stock of 88.3%, six percentage points higher than in 2015, with an increase of 10% in the average daily rate (ADR) and in revenues per available room (RevPAR).

Sources at RIU indicate that its business is performing “very well” this season, in line with last summer, when occupancy rates were very high in all of its hotels along the Spanish coast and on the islands. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Wimpey Protects Its Homes In Spain From Brexit

28 July 2016 – Expansión

The British real estate company has refinanced its property developments on the coast through the issue of bonds amounting to €100 million.

One of the consequences of the UK referendum, held on 23 June in which Britons voted in favour of Brexit (to exit the European Union), may be a decrease in the volume of house purchases on the Spanish coast by citizens of the United Kingdom, as a result of the depreciation in the pound against the euro and fears about future restrictions over the free movement of people between the two countries.

Taylor Wimpey, the real estate company that has property developments in Andalucía, Alicante and the Baleric Islands, aimed mainly at British buyers, has decided to protect itself against those risks through a debt issue in euros to “hedge its investments in Spain”.

On 28 June, just five days after the referendum, the company completed a private placement of bonds amounting to €100 million with institutional investors, secured by its Spanish assets. The securities pay annual interest of 2.02% and are due to mature in June 2023.

According to market sources, this operation seeks to refinance in euros Taylor Wimpey’s debt associated with its assets in Spain, which amount to €168 million. By having the assets and debt of its Spanish subsidiary denominated in the same currency, the group’s balance sheet is more stable in the face of possible fluctuations in exchange rates in the future.

Currently, Taylor Wimpey has several property developments underway along the Spanish coast, where it has already committed to sell 399 homes.

During the first half of 2016, the firm completed the sale of 53 homes in Spain, at an average price of €342,000. Interestingly, one of these property buyers was Pete Redfern, the CEO of Taylor Wimpey. The chief executive of the group acquired two houses from the Spanish subsidiary, one for €278,000 and the other for €350,250. According to the company, the first home was sold at market price, whilst the other was purchased by Redfern taking advantage of the discount plan offered to employees “under the same terms offered to all other staff”.

Taylor Wimpey’s revenue in Spain between January and June amounted to GBP 14.8 million (€17.6 million), generating an operating profit of GBP 0.3 million. “We hope to continue making progress in the Spanish market during the rest of the year, given the strength of our order book” said the group. “Looking further ahead, we remain cautiously optimistic, given the potential implications of the macroeconomic environment in Europe”.

The company, which besides its business on the Spanish coast, is heavily focused on the United Kingdom, recorded revenues of GBP 1,457 million during H1 2016, up by 9.1%. At the results presentation yesterday, Redfern said that Brexit had not yet affected the group’s sales in the British market.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake