RIU Seeks To Grow Its ‘Hotel Plaza’ Business Line

17 May 2017 – Expansión

RIU is on a roll. As it waits for the starting gun to fire on its Edificio España project in Madrid, the Mallorcan hotel chain is analysing other destinations in order to strengthen its Plaza business line, which is strategic for the group, whereby adding new locations to the Plaza brand.

The CEO of RIU and Head of Canary Islands, Morocco, Portugal and Cape Verde, Félix Casado, explained in an interview with Expansión that the group is considering destinations such as Barcelona, Paris and Rome to continue the business it started in 2010, when it opened its first RIU Plaza hotel in Panama. Since then, it has added another five Plaza branded establishments in Berlin, Dublin, Miami, Guadalajara and New York. But, for the time being, it does not have any in Spain. At the beginning of the year, the company announced its plans to team up with Baraka to manage and invest in the mega-hotel that the Murcian group is planning to open in Edificio España.

“We are very excited about the idea of handling this project in Madrid, in particular, in a building as iconic as Edificio España. The negotiations are not proving easy and now we have to wait for the purchase operation to be closed, which has been delayed for three months, before we can start construction”, said the Director. Casado said that his firm’s investment commitment with the Baraka Group “continues”, in line with expectations, with the aim of creating a joint venture to which the hotel chain will contribute 25% of the investment.

In terms of the possibility of undertaking a project on its own, in the event that Baraka does not manage to close the purchase within the scheduled timeframe – i.e. by June – Casado simply said that that option “is not envisaged”. And he added: “The other line would be a separate study that would have to be analysed from the point of view of the required investment and the return”.

Entry into China

Besides the urban business, the hotel group’s growth plan involves expanding into vacation destinations, both in America as well as in Asia.

The company, which operates in 19 countries with almost one hundred hotels, is considering entering China, starting out in cities such as Beijing and Shanghai. “We would be willing to invest in all of these destinations. RIU is going to attend the ITB Tourism Fair in China to consolidate its relations there and create new business opportunities”, said Casado.

In addition, RIU has not ruled out returning to Cuba, which it left in 2015, with the management of new hotels. “We are looking at various possibilities to return to Cuba. We have experience in that destination and if an opportunity arises that fits with out philosophy then we will explore it”.

Renovations

In addition, the hotel group is committed to repositioning its products through major renovation projects. Within the framework of this strategy, the Spanish group will spend €400 million this year on construction and renovations, of which almost €150 million will be spent on improving its hotel portfolio in Spain.

“We are diversifying the product and we are updating it, so as not to get left behind, with the aim of ensuring that our clients are happy, which is one of the priorities of RIU”, he said. Recently, RIU opened the doors to its Club Hotel RIU Costa del Sol in Torremolinos, after combining and renovating the RIU Belplaya and RIU Costa Lago hotels.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake