MADRID — Spain's hotel executives believe their country remains one of Europe’s best markets for hotel investment and operations, but continuing to be successful requires more diligence.
Spain undoubtedly kickstarted the resurgence of the Mediterranean hotel industry before and after the pandemic, said Ana Ivanovic, JLL's executive vice president for Europe, Middle East and Africa, hotels and hospitality capital markets at the recent Atlantic Ocean Hotel Investors’ Summit.
Emilio Iráculis, CEO of Hoteles Silken, or Silken Hotels, agreed, and added “the challenge is growth.”
Competition has grown, said José Rodríguez, CEO of Sercotel Hotel Group.
“Spanish hotels were known for margins and controlling costs. … We have now to understand how to manage pricing. [Sercotel has] invested a lot of money into [capital expenditures] to protect our pricing, not just our demand, and this has helped our [profit and losses] with the same number of rooms,” Rodríguez said.
Rodríguez added hotels in Spain still offer good value for money thanks to this new discipline in Spanish revenue management.
Ivanovic said a new level of “re-engineered sophistication” is needed to escalate domestic revenue management practices in Spain's hotel industry to match international standards and to resist international pressures.
Iráculis, whose company has 30 hotels all in Spain, said Silken has improved its tools and discipline around customer relationship management.
“Marketing has become a definite cost line,” he added.
Jordi Ferrer Graupera, CEO of Grupo Inversor Hesperia, said 70% of his business is digital, and the quality of the company's data is much better.
“Our offerings are tailor-made, too, and that was not the case,” he said.
Dominating discipline
Spain's best hotel investment opportunities arise when partners each have skin in the game, Graupera said. Other routes to adding value include hotel repositioning and renovations.
“We think we can grow in Spain with our own capital,” he said, adding that Hesperia has levers to pull within its hotel funds.
Sercotel’s Rodríguez said keeping up with new regulations in Spanish law and finding the right alignment with partners are other challenges.
Other panelists said staffing and family office ownership supplement the list.
“[Staffing] is not just a Spanish problem. We have 1,500 employees. … We see 25% rotation per year,” he added.
Graupera said not all family offices in Spain have up-to-date thinking in connection with hotel exits.
Spanish owners and operators are looking beyond Iberia, too.
“One challenge is to go abroad with our model of white-label brands. We see excellent opportunities in markets not far from [Spain],” Graupera said.
Iráculis said Silken also is now looking at external opportunities.
“Initially in Portugal, it being the closest neighbor, and then perhaps in Morocco,” he said, adding news on this might be announced in the next few months.