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Expansion on agenda for Spanish hotel chains
January 26 2012

Chief executives from Meliá Hotels International, NH Hoteles and Barceló Hotels & Resorts provide detailed company updates during last week’s FITUR travel trade fair in Madrid.

Highlights
  • Meliá Hotels International has signed 38 new projects through 2014, 87% of which are outside Spain.
  • NH Hoteles has 21 hotels with 2,620 rooms under construction.
  • Barceló openings scheduled in the coming months are in Hamburg, Germany; Marrakech, Morocco; and Brno, Czech Republic.
By Benjamin Jones
HNN correspondent
jonesbenjamin@hotmail.com

MADRID—Modest optimism among Spain’s largest hotel operators is spurring expansion in the country and especially abroad, as they work to capitalize on rebounding tourism around the globe.

What follows are updates from Meliá Hotels International, NH Hoteles and Barceló Hotels & Resorts:

 

Gabriel Escarrer

Meliá Hotels International
“We think there will be a very positive evolution in the Caribbean and in Latin America, and our vacation properties continue to do well in Spain partly due to (a shift in inbound travelers who would have otherwise visited turmoil-plagued) North Africa and the Middle East,” Gabriel Escarrer, the CEO of Meliá Hotels International, said at last week’s FITUR travel trade fair in Madrid.

 

But, he cautioned, the chain was concerned about the uncertain evolution of the domestic urban market and in the rest of Europe where last year Meliá properties registered only a moderate increase in revenue per available room.

Escarrer said total RevPAR for the group’s more than 350 hotels under eight brands was up 9% last year over 2010, while room rate performance was largely flat with an average increase of 0.2%.

Last year, Meliá registered what he described as “positive results” with 80% of income from outside Spain and investment of around €45 million (US$58 million). The same growth is forecast for 2012.

“Between now and 2014, we have already signed 38 new projects with 87% of those outside Spain, and Latin America will be the focus with 17 hotels in Brazil alone,” Escarrer said. “There is this emerging middle class in Latin America, which is traveling now, and we want to tap that market.”

There also are openings planned in other emerging markets like Colombia, Costa Rica, China, Vietnam, Indonesia and the United Arab Emirates, as well as the established destinations of the United Kingdom, Austria, Italy and Germany.

“There are another 240 projects under study,” Escarrer said. The majority of Meliá properties are under management or rental contracts, and the CEO said the chain would pursue those models in its newest ventures.

 

Mariano Pérez Claver

NH Hoteles
NH Hoteles, Spain’s leader in urban hotels with 400 properties in 25 countries in Europe, the Americas and Africa, is counting on between 3% and 4% growth in its markets next year, following a good 2011 with earnings up 7% and net profits of €25 million (US$32.4 million).

 

In 2010, the company registered a loss of €40 million (US$52 million).

“We want to grow in Latin America and are now in talks with a group in Brazil about expanding there as we have nothing in that booming market as yet,” NH president Mariano Pérez Claver said.

“There are also plans for new properties in Argentina, mostly in Buenos Aires, and we have two hotels under construction in Mexico, which we will manage,” he added.

NH has 21 hotels with 2,620 rooms under construction.

Peréz Claver put on a brave face when asked about the collapse late last year of the company’s agreement with HNA of China, under which the latter was to acquire a 20% holding in NH for €431.6 million (then US$594 million).

The agreement also would have allowed for the two groups to pursue a joint venture for managing hotels in China and would have provided the Spanish chain with much needed funds to ease its debt of €1.1 billion (US$1.5 billion) owed to a syndicate of banks.

“I think the Chinese looked at the situation in Europe with the financial turbulence and Spain’s debt crisis and things probably seemed horrible,” he said. “And in retrospect, China was never really our natural market anyway.”

Following HNA’s pullout, the president said NH had proposed to its creditors a refinancing plan spread over five years, which would have the company sell off assets to raise €300 million (US$390 million).

 

Raúl González

Barceló Hotels & Resorts
At Barceló Hotels & Resorts, the company is seeing a “certain recovery” in its global operations with more bookings at its tropical properties enjoying an increase in visitors from developing markets.

 

“Russia, for example, was almost nothing several years ago, and now we’re seeing strong demand from that part of the world at our Caribbean resorts,” said Raúl González, CEO for Europe, the Middle East and Africa.

“We expect a recovery in prices this year, and our income in 2011 was around €1.1 billion ($1.4 billion), or close to that of the previous year,” he said.

Barceló openings scheduled in the coming months are in Hamburg, Germany; Marrakech, Morocco; and Brno, Czech Republic. An additional four hotels are scheduled in Italy through a management agreement with Aran Hotels.

González said that negotiations were continuing in the United Kingdom, where the Spanish company is seeking to revise its £32.5 million (US$50.5 million), 20-property management contract with owner Puma Hotels.

Barceló is seeking to reduce its rental payments agreed in a 2007 contract that runs until 2042.

“We signed the contract when times were good, but now it is not sustainable,” he said. “We’re hoping for a solution soon, maybe in two months or six months, but whenever it happens it will be an improvement on the current situation.”

In a related development, the Spanish government reported this week that overnight hotel stays during 2011 were up 6.4% over the previous year. Stays by foreign guests increased by 12.7%, but stays by Spaniards were down 2.2%.

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