MEXICO CITY— Santa Fe Grupo Hotelero is banking on the continued evolution of Mexico’s hotel industry to grow its presence across multiple segments.
During the past 12 months, Mexico City-based Santa Fe has grown more than 50% by adding 1,134 additional rooms to its portfolio, including 680 rooms that it owns, said CEO Francisco Zinser Cieslik. The company, which counts Nexxus Capital, Walton Street Capital and Grupo Chartwell as its partners, has 11 hotels in its portfolio. It owns 90% of the 3,327 rooms it manages.
The recent growth is just the beginning of the four-year-old company’s expansion plan, Zinser said. SFG will focus on the acquisition and conversion of hotels as well as signing third-party management agreements.
“We believe in the Mexican market,” Zinser said. “We know it very well in terms of what the market demands. The largest share of demand—about 80%—in Mexico is local.
“Where we see our opportunity is branding,” he added. “Mexico is clearly a conversion opportunity for the hotel business.”
Zinser said a little less than 20% of the rooms in Mexico are chain affiliated, so there’s a tremendous conversion potential.
“Our growth will mostly be conversion,” Zinser said.
Zinser, the former chief strategy and development officer for NH Hoteles, joined SFG in April 2013 to work with longtime business partner Carlos Ancira, with whom he founded Grupo Chartwell in 1996, and hotel operator Francisco Medina Elizalde, SFG’s former CEO.
While SFG is open to managing any branded property, it is putting a specific focus on rejuvenating the Krystal Hotels & Resorts brand, which has six hotels open. Krystal Grand is in the 5-star category, Krystal Hotels & Resorts is the 4-star offering and Krystal Beach is the 3-star brand, Zinser said.
Santa Fe also has branded properties such as Hilton Hotels & Resorts, Hilton Garden Inn, Hampton Inn & Suites and Mosquito Beach and is a preferred operator for several brands in the Starwood Hotel & Resorts Worldwide portfolio.
“The Krystal brand has been present for over 35 years in the Mexican market, and it does very well in the destinations it is in,” Zinser said. “We are now taking it into the urban segment and into the 5-star segment as well.
“We believe it is a brand that has very good positioning and recognition in Mexico,” he added.
A different focus
Zinser said the Krystal Grand brand will increase its focus on technology—which is a requirement in today’s environment for guestrooms and meeting space—as well as the gastronomic experience.
“We will have ample capacities for our guest in their Internet experience,” Zinser said. “Today the most annoying thing that can happen for guests in a hotel is inadequate Internet access.”
The Krystal Grand brand will not be all big-box facilities, Zinser said.
“What will drive the DNA of the brand is the quality of the guest experience. That can be both urban and resorts,” Zinser said. “Time poverty is everybody’s issue. We think of our hotel as providing more time for yourself. It’s a concept of making our guests’ stays as hassle-free as possible.”
Zinser said the plan is to have 15 to 20 Krystal properties—either through management or ownership—in the next five to seven years.
“We see the Krystal brand mostly as a conversion brand,” Zinser said. “There are some destinations that our brand will work as well as or better than international brands, proving us the potential to grow our brand.”
Santa Fe announced in early March is managing the former Meliá Reforma Mexico City Hotel and has reflagged the 492-room property as a Krystal Grand Hotel. The hotel will undergo a complete renovation of all guestrooms and public spaces, Zinser said.
“This is the spearhead of our Krystal Grand brand,” he said. “In just three months we have announced two Krystal Grand properties in key destinations in Mexico, and we have other projects in the pipeline.”
SFG acquired the Hyatt Regency Cancun from Westmont Hospitality in late 2013 and will rebrand it as a Krystal Grand property on 1 May 2014.