8 June 2015 – Expansión
Interview with Simón Pedro Barceló, Co-President of the Barceló Group / Having acquired a 42.5% stake in Occidental Hoteles from minority shareholders, Barceló now wants to take control of the chain. It will invest €180 million refurbishing its hotels.
Barceló is stepping on the accelerator. Having used the crisis to refurbish its hotels and make a return to the travel business, the hotel group is now looking to expand. With this objective in mind, Barceló joined forces with the Socimi Hispania at the beginning of the year, to create the first dedicated hotel listed investment vehicle.
Through the creation of the Socimi, Barceló will complete several milestones in one deal. On the one hand, it has opened the door to growth, since the investment vehicle aims to double its size. On the other hand, the Mallorcan group will reduce its real estate exposure, which had reached the highest value in its history. Barceló will transfer 16 hotels and two shopping centres worth €421 million to the Socimi, and will retain a 19.5% stake in the company. “The operation reduces debt and frees up resources”, said Simón Pedro Barceló.
Barceló has already started to use some of those “freed-up” funds. In May, it acquired 42.5% of Occidental Hoteles from Amancio Ortega, owner of Inditex, and other minority shareholders. The next step is to sign an agreement with BBVA, which owns the remaining shares. According to Barceló, “Occidental’s shareholders launched the process and that means they want to sell. Barceló is willing to acquire 100% and that is feasible in the short term”.
The acquisition of Occidental will increase Barceló’s portfolio to include 14 additional hotels and 4,584 rooms in the Caribbean: “It strengthens our business in Mexico, the Dominican Republic and Costa Rica, and it opens us to new markets, such as Aruba”. Nevertheless, the operation will entail an investment of USD 200 million (around €180 million) to modernise Occidental’s hotels.
In addition to the deal with Occidental, Barceló’s other objective is to improve its results. In 2014, its gross operating profit (EBITDA) amounted to €216.7 million and its net profit was €46.4 million, up 85.6%.
This year, “we hope that EBITDA will reach €250 million and net profit will double to €100 million; that would make us the leader in the market in terms of profitability, ahead of Melia and NH”. (..)
Regarding the good times that the Spanish tourism sector is currently experiencing (the number of international visitors make break historic records this year), Barceló says that “Spain is a volume destination and that cannot be ignored; from there, we seek to make the market as profitable as possible”. (…).
Original story: Expansión (by Yovanna Blanco)
Translation: Carmel Drake
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Source:: AURA Real Estate Experts