In a few weeks' time, Covivio is preparing to complete the XXL consolidation deal signed with AccorInvest, and is today launching the WiZiU hotel management platform, designed to further strengthen its exposure to the European hotel industry. In an exclusive interview, Covivio's CEO Tugdual Millet explains to Business Immo the roadmap for the company, which is headed by newly-appointed CEO Estelle Séguin.
Business Immo : Covivio today announced the reinforcement of its hotel management platform, giving it a new identity: WiZiU. What role does this new dynamic play in the Group's development?
Tugdual Millet Tugdual Millet: 2024 was an important year for Covivio, particularly in terms of our desire to strengthen our position in the hotel sector and accelerate the development of our hotel platform. Firstly, our acquisition of a stake in our subsidiary Covivio Hotels, which took place in thefirst half of the year, means that around 20% of our assets are now devoted to the hotel sector, compared with 15% two years ago.
At the end of June, we also signed a firm commitment to a business-funds consolidation operation with AccorInvest. Completed by the end of November, it will enable us to continue to develop our profile in the hotel sector, gradually moving from that of an investor to that of a hotel operator. We are convinced that the combination of these two areas of expertise will enhance our ability to improve hotel performance, reposition them and create real estate value. The development of WiZiU is fully in line with this new dynamic.
BI: What does this platform involve in concrete terms?
TM: In 2016, we bought a small hotel management structure - Société lilloise d'investissement hôtelier (SLIH) - which until now had managed ten establishments. By becoming WiZiU, this platform is set to grow and take on the day-to-day management of the hotels we own directly, including some of the assets that will be re-membered following our transaction with AccorInvest.
By the end of the year, WiZiU will thus manage 24 establishments in France and Belgium, operated under various brands such as Accor, IHG, Hilton or Marriott, and totaling nearly €150 million in sales. WiZiU's historic hotels are iconic 4- or 5-star establishments in excellent locations. The hotels to be taken over are positioned in 3 and 4 star categories, and offer significant growth potential.
To implement our roadmap, we have recruited Estelle Séguin as Managing Director. She has extensive experience in managing 3 to 5 star hotels, having previously worked at Indevho, notably as Vice President and Director of Operations. She joined us at the end of September, and joins a management team that has been renewed over the last 12 months.
BI: What motivated this new ambition in hotel management?
TM: We decided to add Covivio's historic expertise to real estate investment, an operator logic that we had already applied a few years ago in the office sector with the launch of our own flexible office brand, Wellio. In order to reach the end of the value chain, we felt it was important to do the same in the hotel sector, by being able to directly manage part of the portfolio. This new subsidiary will enable us not only to continue developing our know-how, but also to become increasingly agile in the way we manage our hotels and seize opportunities, so as to capture both real estate and operational value.
BI: What is your roadmap for the development of WiZiU?
TM: With this platform, we will master all the levers for optimizing hotel performance, and therefore value creation. WiZiU's aim is to be able to manage more hotels in the medium and long term. Our priority over the next two years will be to reposition the hotels joining the portfolio this year. Several of them will undergo renovation and/or rebranding. At the same time, we will be working on the development of the platform and studying potential acquisition opportunities.
BI: Why does Covivio place such a strong emphasis on hotels in its strategy?
TM: We have had this strategic focus for some years, and reaffirmed it in 2024. We benefit from a leading position in hotel investment in Europe, which allows us to be mobile enough in the current market environment and credible enough to continue our development. We are convinced that the hotel industry is based on extremely solid fundamentals. The real-life test we experienced with the Covid-19 pandemic showed that this asset class is very dynamic and that the need to travel, to move around and to stay in hotels is extremely strong.
The post-crisis recovery has taken place much more quickly than anticipated. This gives us confidence that this industry will enjoy many more years of growth. All the statistics and forecasts for tourist flows, particularly in the major European capitals, are very positive for the coming years. That's why we want to develop our know-how and accelerate our exposure in this sector.