Grupo Hotusa had a record year in 2015. The Barcelona-based company includes a hotel consortium – the largest in the world – along with tourism and hotel arms. CEO Amancio López Seijas talks about the company’s growth trajectory in Latin America and elsewhere, and its priorities and challenges in the coming year.
HOTELS: What’s the growth plan for the hotels division?
LÓPEZ: Last year was a record for us, with over €955 million in sales. The biggest share is still in the tourism area, which generated over €573 million in 2015, a 23.7% increase. Within that division, Hotusa Hotels has consolidated its position as a very useful option for independent hotels worldwide, specifically in America, Asia and Africa, where we have a big growth margin.
Our hotel division, Eurostars Hotel Company, has maintained double-figure interannual growth indices over the last few years. In 2015, this branch recorded a turnover of €342 million, a 21% increase on the previous year.
So far in 2016 we have added 25 new hotels in Spain, Italy, Portugal, Czech Republic, Hungary, Colombia, Mexico, Panama, Ecuador and our first hotel in the African continent, the Eurostars Sidi Maarouf in Casablanca, Morocco.
Our fundamental and priority objective is to increase the Eurostars Hotels chain’s portfolio, which currently has 90 hotels. We don’t set out in stone what our preferred option is when it comes to growth although rental is the option we feel more comfortable with. We are open to other options such as hotel management or purchase. Indeed, we have decided to embark on a new line of growth based on hotel franchise.
We can break down the growth objectives scheduled for the next few years into purchase (20%), rental (60%) and franchise for a few destinations (20%). The U.S. is a market that we definitely want to grow in and we are looking at various possibilities. We believe that the pure hotel management option will enable us to expand organically in that country. However, we are not ruling out rental or even purchase of assets in the big cities in the U.S., to complement our current presence of two hotels in New York.
H: Do you own or have a joint venture with the new Bogota project, or will Hotusa strictly manage?
L: In the case of Eurostars Bacatá 5*, we have a small shareholding in the hotel, but basically it’s a usage rental contract. The project is owned by BD Promotores. We believe that in view of the iconic building that houses it, one of the highest in Latin America and its location, it will be a leading hotel not just in Bogota and Colombia but in the entire continent. And it will also be a flagship for our company’s expansion in these countries. The hotel is scheduled to open in late 2016 or early 2017.
H: Describe the new schemes in the Tourism division, including Hotusa Ventures, Hotusa Venture Builder and Hotusa Travel Lab. How much is Hotusa investing, and why?
L: These new initiatives stem from our desire to find business models that enable us to guarantee our company’s survival not just today but in the future, with scenarios we can’t even imagine at the moment.
Everything we are doing is intended to rethink everything we are and do, along with a certain concern about the future. Will our business model survive in the future, with the technological revolution and globalization, which are, in the end, both the result of each other? What Hotusa Ventures is seeking is to generate business models we think can be successful in the future and work in parallel.
We believe it is worth investing in startups that provide those projects with financial resources and strategic capabilities, whether they are detected by our team of experts or driven from our own business incubator. Furthermore, we have recently hired a venture builder in order to promote our own innovative business projects in the travel and lodge sector. Hotusa Venture Builder’s aim is to have its own teams formed by talented young people who this business unit supports and monitors in their development of innovative projects.
H: What do you see as the group’s biggest challenge and opportunity?
L: Our main challenge is to adapt to this future and guarantee our company’s sustainability. We believe there is still a lot to do in the hotel consortium business, offering more and better services to independent hotels.
On the other hand, another great challenge is to launch our hotel branch in China and Japan and increase our presence in the U.S.
H: What are your expectations on the impact of Brexit?
L: I am sure they will have an effect, as do all economic, political or social events whether they are structural or conjunctural. But even in one of the worst scenarios, like the 2008 economic crisis, our company didn’t record losses but even grew, and this has generated confidence in our resilience.
It may be a bit early to forecast the scope of the impact. If it affects British people’s purchasing power they will probably travel less, but as highlighted in the first few days after the referendum, a sharp fall in the price of land was forecast, which could be an opportunity for a company like ours to acquire hotel assets. We’ll have to wait.
What is clear is that the most important thing is security, meant in the widest sense. And if this security is endangered, investments falter.
H: What would you like to tell us about Grupo Hotusa?
L: In the last three years we have increased our EBITDA by 18% (from €58.2 million in 2013 to around €81 million in 2015) and BAI by 45% (from €18.8 million in 2013 to €40 million in 2015).