A Barceló Hotel Group executive said the deal to buy back the 60% of Crestline Hotels & Resorts that it sold off four years ago comes at the right time, and is a logical step in the Spanish company’s plans to relaunch itself into the “enormous” U.S. hospitality market.
MADRID–In a move to re-enter the North American market, Spanish hotel and travel giant Barceló Hotel Group has bought back the 60% of United States hotel management firm Crestline Hotels & Resorts it sold off four years ago, the Spanish operator announced last week.
Barceló originally bought Crestline in 2002, and in 2013 sold the majority stake to New York-based investment company AR Global but held on to 40%. The new deal gives the Spanish company full control of Crestline.
During a recent interview with Hotel News Now, Barceló CFO Vicente Fenollar said the time is right as the company seeks a second chance to expand into the U.S. hospitality market.
“We’re in a really great position now with excellent results at a group level, with 2016 being a very good year for us across the board,” he said. “It’s a sweet moment for us and we want to continue our growth strategy in all the geographic areas where we operate. We’ve just opened new hotels in a number of Spanish cities as well as in Italy and in Latin America.
“And the Crestline purchase allows us to now grow in the United States through a company which is also doing very well.”
Based in Fairfax, Virginia, Crestline Hotels & Resorts manages some 112 properties with more than 16,000 rooms in 29 states and the District of Colombia for chains like Marriott, IHG, Hilton, Hyatt, Red Lion and Starwood.
Crestline executives declined a request for an interview with Hotel News Now about the deal, and AR Global did not return phone calls seeking comment.
It is Barceló’s second foray into the United States, where it currently does not operate. The same year it shed the stake in Crestline, the group sold four properties on the East Coast. But the company is now eager to return to the market with openings in major cities around the country.
“The United States is an enormous market and we want a presence in cities like New York, Chicago, Philadelphia and others. This year, we should be opening several properties under the Barceló brand but we can’t yet announce where they will be,” Fenollar said. “And they could be managed by Crestline as we’re very happy with the company because they have excellent people, and we know them and trust them.”
He added that hotels now managed by Crestline under an existing brand could be rebranded as Barceló properties if the owners agree and it makes sense from a marketing point of view.
Inmaculada Ranera, managing director, Spain and Portugal, at commercial property and hotel consultancy Christie & Co. in Barcelona, said it was a good move on several levels and further evidence of the consolidation taking place in the industry.
“Barceló originally bought Crestline back in 2002 when everything was going great but with the financial crisis beginning in 2008, which hit the Spanish hotel sector especially hard, they eventually unloaded their majority stake, and around the same time got out of an unpromising investment in the United Kingdom,” she said.
“This time around, they’re making a smart move. Their financials are strong, their domestic market is now doing very well and this is keeping with the group’s expansion strategy, which includes new hotels in the Caribbean and their incursion into China through the partnership with (Plateno Group) signed last year.”
Ranera echoed Fenollar’s remarks concerning the possibility of rebranding hotels through Crestline, saying the deal gives the Spanish group the chance to eventually establish Barceló as a name in the U.S. when current management contracts expire.
With the Crestline deal, Barceló now operates 228 hotels in 21 countries, totaling 50,300 rooms.
“Barceló has good experience in running urban hotels so there will be that opportunity," Ranera said. "The group is clearly back, spending money in the market and ready to tackle the U.S. market.”