NH Hotel Group said on Monday it has agreed to buy Colombian chain Hoteles Royal for €65.6 million (US$74.9 million), after deducting €21.5 million (US$24.5 million) collected last month from the sale of the NH Bogota Parque 93 hotel.
NH added that with its recent sale of Sotogrande, it will not need to increase the group’s debt to acquire Hoteles Royal, which includes 20 hotels and 2,257 guestrooms across Colombia (15 hotels), Chile (four hotels) and Ecuador (one hotel). These hotels are currently operated by Hoteles Royal under a mix of ownership arrangements (three hotels), long-term variable leases (12 hotels) and the management regime (five hotels). NH stated that the mix of contracts used by Royal fits with the asset-light growth model.
Six of the hotels have been flying the Radisson flag, but will be rebranded under NH flags. Radisson recently announced it is taking back control of its franchising in Latin America.
Madrid-based NH Hotel Group said it will buy 80.77% of Hoteles Royal in the early stage and then the offer will be extended to the remaining 19.23%.
“This acquisition delivers growth in Latin America, one of the core objectives contemplated in our business plan, without implying any deviation whatsoever from our stated commitments,” said NH Hotel Group CEO Federico González. “We are certain that the process of integrating the Hoteles Royal properties into the NH portfolio will be natural and easy given the product and positioning match. We are confident that the integration will be successfully completed during the course of this year.”