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

Hotel Financing: Sabadell’s Market Share Rises To 31%

26 January 2017 – Expansión

Sabadell was the only Spanish bank to have its own stand at Fitur. The entity’s decision to physically attend the tourism sector’s major annual meeting reflects its desire to consolidate its position as the key player in this business segment, which is so strategic for the Spanish economy.

Two years ago, the bank chaired by Josep Oliu decided to launch Sabadell Negocio Turístico, a specialist division that has allowed it to secure a market share of 31% and increase the volume of financing it has granted to the sector to €4,500 million.

Over the last two years, the granting of loans to tourism companies has grown by €1,500 million, according to José María Martín Rigueiro, Director General of this business unit.

According to the executive, 90% of this volume is used to finance hotel purchases and the remaining 10% corresponds to loans used for renovation projects and energy efficiency improvement plans in tourist establishments. Nevertheless, in terms of the number of transactions, the proportion is inverse, in other words, 90% of the loans (by number) are granted for renovations and 10% for acquisitions.

More than 13,500 clients

“We have positioned ourselves as a key player in the whole sector, given that we are the only bank to offer a specific value proposition for financing tourist services and products. Moreover, it is suitable for large hotel chains, as well as the smallest of rural hotels”, said Martín Rigueiro.

Thanks to its specialist agents, Banco Sabadell is growing its client portfolio by 7% per annum and is now collaborating with 13,500 companies, including hotel groups, campsites, travel agents and tour operators. Moreover, its net investment balance is increasing at an annual rate of more than 10% and the volume of client resources managed is growing by more than 25% each year. The objective for this year is to grow its client portfolio by 8% and to increase its credit investment by 10%.

“At Fitur, we were breathing an environment of maximum optimism; the hotel sector is expected to grow this year, in terms of both occupancy rates, as well as average room rates”, explained the Director of Sabadell Negocio Turístico.

The banker also attested to the strong interest from international funds keen to invest in hotel assets in Spain. Investors are managing returns of between 9% and 18%, said Martín Rigueiro. (…). The greatest interest is being seen in the vacation hotel segment, as well as in the urban segment, in major capital cities.

Financing for hotel purchases is being provided across the board: to investment funds, Spanish family offices, individual investors, as well as hotel chains. 90% of the sectors largest players are clients of Banco Sabadell, and the bank now also has a market share of 45% in the SME tourism segment.

According to Sabadell, the default rate of new loans granted to hotels since the crisis is very low, given that operations are no longer being leveraged on the basis of the value of the underlying real estate assets, but rather on the basis of the business plans and income statements of the establishments. (…).

In parallel to this specialist business unit, Sabadell also operates in the hotel sector through HI Partners, a hotel investment and management company.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake

Relaxia Resorts Buys Hotel Olivina In Lanzarote

7 December 2016 – Real Estate Press

The Canarian chain Relaxia Resorts, which forms part of the Pérez Moreno Group, acquired its fifth property on 1 December after completing the purchase of Hotel Olivina together with Mazabi. Until now, the property has been managed by Iberostar Hotels & Resorts, under the Olé Hotels brand.

The 4-star hotel is located in Puerto del Carmen in Lanzarote and has 290 rooms.

Hotel Relaxia Olivina hereby joins the Canarian chain’s portfolio, which now boasts 864 rooms in the Canary Islands, of which 686 are located on the island of Lanzarote.

All of the properties owned by the Relaxia chain, which was awarded the “Tourism Distinction” by the Cabildo of Lanzarote in 2011, have a tourist quality Q rating, as well as environmental protection certificates, such as ISO 14001 and Travelife.

Hotel Olivina, in Lanzarote, has changed hands once again after its purchase by Relaxia Resorts, which operates the property under its brand. The tourist chain, which is based in the Canarian capital, also owns the recently constructed Relaxia Aqualava Water Park in Playa Banca, Lanzarote.

With the acquisition of this new hotel, the chain is now one of the largest companies in the tourism sector in the Canary Islands.

Original story: Real Estate Press

Translation: Carmel Drake

Ayco Buys Hotel Byblos In Mijas For €60M

26 September 2016 – Real Estate Press

As a result of this operation, Hotel Byblos hopes to restore its reputation as a luxury establishment in the health and family tourism sector, focused on the world of golf.

Ayco’s representatives have communicated that the real estate group plans to completely rebuild the property, which houses one of the largest five-star luxury hotels on the Costa del Sol. They plan to retain the hotel’s characteristic features, as well as incorporate new elements, such as a health and beauty area.

The five-star Hotel Byblos Hotel is an icon of the tourism industry on the Costa del Sol, since many internationally famous personalities have passed through its facilities, including the mythical Rolling Stones and Lady Di, amongst many others.

The establishment, opened in 1986, achieved enormous international fame as an icon of high quality tourism until it was acquired by the real estate group Aifos, which then led it to ruin, until its closure on 31 May 2010. In 2009, the British magnate Lord Sugar, founder of the mythical information technology company Amstrad, acquired the hotel and considered the possibility of reopening it in 2013, but that did not end up happening.

Original story: Real Estate Press

Translation: Carmel Drake

Cinven Offers €1,300M To Outbid EQT In Auction For Hotelbeds

27 April 2016 – Expansión

The private equity firm Cinven, which has invested heavily in Spain over the last two years, may take a leap forward if its bid for the Hotelbeds group goes ahead. TUI AG put the company up for sale at the end of 2015.

Sources close to the sales process indicate that Cinven has put an offer on the table, which values the tourism company at €1,300 million. The Nordic fund EQT is also participating in the bidding and sources do not rule out the possibility of other interested groups participating in what now seems to be the final stretch of the sales process of the Hotelbeds Group.

The company, a subsidiary of the Germany group TUI AG, works with 75,000 hotels all over the world and offers rooms to tour operators and travel agents around the globe. Hotelbeds, which receives more than 25 million hotel bookings per year, is one of the companies that emerged from the tourism sector thanks to new technologies and it has high growth projections.

Entry into the hotel segment

This would be Cinven’s first major foray into the hotel segment, but it would represent a return to the tourism business. Cinven, a fund headquartered in London, was created in 1977; it went on to acquire Amadeus in 2005, together with BC Partners.

The tourism sector’s technology provider, which was acquired from the major European airlines, was then delisted. In 2010, Cinven and BC Partners returned the company to the stock exchange and sold their shares.

Since its creation, Cinven has made acquisitions amounting to more than €70,000 million, specialising, above all, in investments with a significant technological component and always with holdings that exceed €100 million. (…).

Meanwhile, Hotelbeds has been on the market since last Autumn. Financial sources valued it at around €1,000 million. TUI had hoped to complete the sales process during the first three or four months of the year, and so a final agreement could be very close. Nevertheless, the emergence of the fund EQT in the process will intensify the Hotelbed operation.

Similarly, financial sources do not rule out that other funds may be preparing their own competitive offers.

Diversified portfolio

EQT, of Swedish origin, has assets under management of €29,000 million and its investment portfolio is very varied. In Spain, it holds stakes in two companies, Islalink and Parkia, which operate in the telecommunications and car park sectors, respectively.

EQT opened an office in Madrid in the middle of last year with the aim of looking for new investments in the Spanish and Portuguese markets. The fund hired a specialist team led by Fernando Conte, the former Chairman of Iberia and the tourism group Orizonia.

At the beginning of February, EQT bought the Swiss tourism group Kuoni for more than €1,100 million and, according to sources in the sector, it plans to integrate that business with the Hotelbeds Group.

For TUI AG, the sale of this company will mean saying goodbye to the online sector to focus on its traditional businesses: hotels and cruises. During the year to 30 September 2015, TUI AG generated revenues of more than €20,000 million, with an EBITDA of €1,069 million, up by almost 23%. Its shares closed at €13.09 on the stock exchange yesterday, up by 0.47%.

Original story: Expansión (by M.Á.Patiño and Y.Blanco)

Translation: Carmel Drake

BlueBay Prepares To Launch Hotel Socimi

2 February 2016 – Expansión

Plan / The chain is creating a listed vehicle with hotels in the Balearic Islands and Costa del Sol with a value of between €150 million and €250 million.

BlueBay is following in Barceló’s footsteps as it prepares to create a Socimi with several hotels from its portfolio. The chain controlled by Jamal Satli Iglesisas is planning to create a listed vehicle containing four hotels in the Balearic Islands and one property on the Costa del Sol, with a value of between €150 million and €250 million. BlueBay’s Socimi could debut on the stock exchange during the first half of this year.

In February 2015, Barceló announced its partnership with the Socimi Hispania to create Bay, a listed vehicle containing 16 resort hotels and 6,000 rooms, along with two shopping centres. Hispania spent €458.6 million to buy its 76% stake in the new company; meanwhile, Barceló acquired the remaining stake and signed lease contracts to continue operating all of the properties for 15 years. The intention of Bay’s partners is to double its size by incorporating more hotels run by other chains.

Besides Hispania, which has acquired more hotels by itself, other Socimis such as Merlin – following its acquisition of Testa from Sacyr -, Axiare and Obsido have invested in hotels and so the Socimis have become the most active investors in the hotel investment market. In 2015, a record year, assets amounting to €2,614 million were sold and Socimis accounted for 40% of those purchases.

Occidental

This panorama has encouraged BlueBay to design its own vehicle, which will allow it to free up resources to finance growth and continue to manage its hotels under lease agreements.

The chain, whose name comes from the former hotel brand used by Viajes Marsans, which filed for bankruptcy in 2010, jumped to the forefront last year, after taking over the management of Hotel Miguel Ángel in Madrid.

Owned by Nadhmi Auchi, the iconic five-star property had been without an operator since January 2014, when Occidental – now part of Barceló – left the management in the hands of the owner after 25 years at the helm. The Iraqui-born British investor and BlueBay agreed to co-finance the €35 million renovation to modernise the hotel and, since then, have strengthened their ties even further.

Two weeks ago, during the Feria de Turismo (Fitur), BlueBay announced that it will bring together the 10 hotels from Le Royal brand, which is owned by Auchi. Following this operation, the chain will have 60 properties and 50,000 beds in Europe, America, North Africa and the Persian Gulf. BlueBay, which focuses on the holiday segment, will incorporate 17 hotels into its portfolio. Over the medium term, it will look towards China and South-East Asia, the new growth centre of the tourism sector, along with Cuba, now that its relations with the United States of America have thawed somewhat.

Original story: Expansión (by Yovanna Blanco)

Translation: Carmel Drake

Colau Suspends 35 Hotel Projects In Barcelona

26 October 2015 – Expansión

On Friday, the Town Hall of Barcelona revealed the final impact of the hotel moratorium in the Catalan capital. The mayoress Ada Colua’s star initiative has left 35 projects up in the air, although it will not effect some of the most iconic projects, such as the hotel that Amancio Ortega is planning to build in Plaza Catalunya or the project proposed by Meridia Capital for the former Henkel headquarters.

The future of the 35 projects now depends on the special urban plan for tourist accommodation (Peuat or ‘plan especial urbanístico de alojamiento turístico’), the regulatory framework that governs the (tourism) sector in the city. The town hall expects to approve the framework in March, just before the suspension of the licences expires. “We still have time to put in order and regulate tourism”, said the fourth deputy mayoress, Janet Sanz, at a press conference.

The 35 projects affected include 30 hotels, three youth hostels and two halls of residence. Some of the most well known projects include the property that the Hotusa group, owned by Amancio López, plans to build on Avenida Vilanova (close to the Arc del Triomf) and the building that Meliá wants to convert on Calle Casp.

During the press conference, the councillor revealed that 51 projects have run their course unaffected by the moratorium, since they were approved when the previous government was in office, i.e. when CiU led the Town Hall. Those 51 projects include 36 licences, 9 obtained due to non-opposition and 6 that have urban use certificates (a document that allows a licence to be requested during a six-month period).

The opposition, led by CiU, criticised Colau’s policy and accused her of making a lot of fuss and then taking little action. They asked the mayoress to show “rigour and seriousness”.

Original story: Expansión (by Gabriel Trindade)

Translation: Carmel Drake

Unemployment Rose By 26,000 In Sept To 4.1M

5 October 2015 – Expansión

The unemployment rate always increases at the end of the summer following the end of the holiday period as the abundance of temporary jobs linked to the tourism sector comes to an end. Other sub-sectors also tend to be hit, for example, catering, trade and leisure activities.

And that is exactly what happened last month (September). For this reason, the number of unemployed people registered at the Public Employment Service increased by 26,087. However, if we discount the effects of seasonality, the number of people on the dole actually decreased by 9,746 people.

In any case, the increase in the unemployment figure is in line with the previous two years. Unemployment grew by 19,720 people in September 2014 and by 25,572 people in the same month in 2013.

It could be said that with the economic recovery, the evolution of unemployment in September is tending to become more normal. During the economic crisis, unemployment rose by 95,000 people during that period.

It also true that, according to the Bank of Spain, QoQ economic growth weakened by 0.2 p.p. between July and September. GDP increased by 0.8% in Q3, compared with 1% in the second quarter of the year. This was due primarily to the impact of the crisis in China and Brasil on the global economy. Nevertheless, activity in Spain is also suffering from the moderation in household spending and residential investment.

For these reasons, the YoY rate of reduction in unemployment has fallen below 8% once again, after exceeding that threshold in July. Thus, in absolute terms, unemployment decreased by 353,808 people in September, i.e. by 7.95% in relative terms. The total number of unemployed people stands at 4,094,042. A (low) level not seen for five years – since 2010. (…).

By sector, unemployment in the construction sector has now recorded 35 consecutive months of decreases. (…).

Original story: Expansión (by M. Valverde)

Translation: Carmel Drake

Barceló Doubled Its Profit In 2014 To Generate c. €50m

12 February 2015 – Expansión

Barceló recorded a profit of c. €50 million in 2014, whereby doubling its result from the previous year. The co-chairman of the hotel chain, Simón Pedro Barceló announced the result yesterday (the group’s definitive results for the year are still pending) and attributed the increase to “a significant increase in EBITDA (from €183 million to €215 million) and the incorporation of ten new hotels in Mexico and the Dominican Republic. Moreover, 2014 was the first full year to include the results of its new travel division.

Turnover exceeded €2,000 million, of which €1,100 million was generated by the travel sector and €900 million from hotels. The total figure amounted to €1,800 million in 2013. The co-chairman of Barceló said that it is too soon to say how the tourism sector will evolve over the course of the year, but he noted that “the Caribbean and Mexico have had a strong start to the year and although we do not know what will happen during the summer months, we believe that we will outperform the results recorded in 2014 by 10%”.

According to the latest information released by the Mallorcan company, Barceló has 140 hotels in 17 countries containing 37,380 rooms. Half of them are located in Europe and the remainder are in America, primarily in the US and the Caribbean. It also has 400 travel agencies operating in 22 countries.

New acquisitions

The group, which returned to the travel agency segment last year through its acquisition of Orizonia, together with Globalia, has not ruled out growth through further acquisitions. Yesterday, Simon Pedro Barceló confirmed that “new corporate transactions have not been ruled out” in the travel agency sector.

The family business owns 39% of its hotels outright, and leases or manages the remainder. Its goal is to be “a great hotel company”, said Barceló yesterday, which is why the company is continually adding new hotels to its portfolio. “We have just signed an agreement to lease a new 4 star hotel with 250 rooms in Berlin”, he said.

Barceló, who was giving a lecture at ESADE, was very optimistic about the future of the economy and the tourism sector in particular and encouraged employers to work together with entities that are independent and able.

Original story: Expansión (by Marisa Ángeles)

Translation: Carmel Drake