The Blackstone fund, the largest landlord in Spain, is also the country’s leading hotelier | Economy

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The Riu Plaza de España hotel, in Madrid, in a file image.
The Riu Plaza de España hotel, in Madrid, in a file image.Jaime Villanueva

One of the largest real estate funds on the planet, families that have made the Spanish hotel sector known throughout the world, little-known chains that host thousands of European tourists every year… everything fits in the classification of the largest hotel owners in Spain. At the forefront is the Blackstone investment fund, which manages more than 17,000 rooms in 58 hotels through the HIP platform. Despite occupying the first position, it is a weird notice among those around him.

In Spain, world hotel power, own chains still dominate. “We are the cradle of the main vacation groups in the world, the creators of this sector,” summarizes Laura Hernando, executive director of Hotels in the Spanish division of Colliers. The real estate consultant points out that 70% of establishments are owned by the brand that operates them. The rest are managed through platforms, franchises or other models. “The photo would be very different in other countries,” she recalls.

But the ranking also reflects the growing tendency to separate ownership and management: in ninth place is a socimi, Atom, which simply rents out the 28 hotels it owns. A sample of the strength of the real estate-hotel business, which according to calculations by Savills Aguirre Newman, moved around 3,500 million investment in 2021. The figure is above the historical average, which proves that foreign capital is hungry for brick tourist. “If we don’t have a setback with covid, a growth cycle is coming in which there are going to be many opportunities; and that is what investors are discounting, who are crazy about entering Spain”, values ​​Juan Garnica, executive director of the Hotels division at Savills Aguirre Newman.

Investor interest marries well with the inertia of the sector. “The evolution is in line with the Anglo-Saxon market”, explains Albert Grau, a partner at Cushman & Wakefield, “hotel companies are doing like American chains and are increasingly focusing their efforts on managing and less on buying stones”. The pandemic has also brought difficulties for tourism companies, which encourages them to seek liquidity with the sale of some asset. The great world investment vehicles are attentive to this: Brookfield bought four Selenta hotels last summer to put a stake in Spain. The 440 million he paid, according to market figures, make it considered the largest operation of 2021, although it is insufficient to enter the Olympus of owners. These are the companies that have the most hotels in Spain:

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1. HIP. Behind the initials of Hotel Investment Partners there is only one great acquaintance of the Spanish real estate sector: the Blackstone fund. The largest landlord of homes in Spain is also the one with the most hotel rooms (17,350). Its 58 establishments spread throughout the Spanish geography draw a map of the hot spots of tourism in the country. Most are located in the Canary and Balearic Islands, but there is no shortage of accommodation on the Costa del Sol, Costa Brava, Benidorm and three urban hotels in Barcelona and Madrid. Some are rented and in others the platform participates in the management. Externally, different brands appear, some as famous as Barceló, which does not enter the top positions because the classification does not take into account hotels abroad.

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Blackstone’s powerful bet helped other international investors set their sights on the Spanish hotel sector, analysts agree. But the fund of American origin has had, in reality, little prominence in that market in recent years. His portfolio comes from the large disbursements he made five years ago. In 2017, it paid 630 million for the purchase of HIP, then a hotel subsidiary of Banco Sabadell. But the real bet would come in 2018 when he launched a takeover bid to take over the entire Hispania socimi, in which he had 16%. This is where most of the establishments it owns come from and which, after a payment of more than 1,660 million, incorporated HIP. Since then it has hardly had any movement in the country, although the platform did begin an expansion to other countries in southern Europe: it has six hotels in Greece and one in Portugal.

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2.RIU. Archetypal example of the coastal hotel sector in Spain. The Riu family started their hotel business in Mallorca in 1953 and the brothers Carmen and Luis Riu, belonging to the third generation, continue to lead a chain that has expanded throughout the world, with a notable presence in the Caribbean. In their case, in addition, they maintain many properties in Spain: 26 hotels with a total of 10,824 rooms. Most are located in the Canary Islands, surpassing the Balearic Islands despite the fact that the origin of the firm is in this community. It is only present in two other communities: Andalusia and Madrid. In the capital, he bought the emblematic Edificio España, 117 meters high, in 2017 to add more than 500 urban rooms (a strangeness in his portfolio) and a listed roof terrace.

3. H10. An example similar to the previous one, although on a smaller scale. Change the Riu family for Josep Espelt and the Mallorca of the fifties for the Costa Daurada (Tarragona) of the eighties. Despite its power in Spain (48 hotels, 10,542 rooms) and being present in 22 countries, its global presence is much less significant. Its expansion model has been somewhat different from that of the Riu, Melià or Barceló and it has many urban establishments. 16 are in Barcelona, ​​which helps Catalonia to bring together more than half of its hotels in Spain.

4. Best Hotels. With 10,274 rooms and 31 hotels, it is not very far from the previous ones, although the brand is less well known. Perhaps because the Tarragona town of Salou, where he was born in 1994, and neighboring Cambrils account for more than a third of his portfolio. It also has a notable presence on the Andalusian coast, where it moved its corporate headquarters in 2017 during the flight of companies from Catalonia that caused the process independentist. ´

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5. Global Hotels. It is one of the “most relevant, solvent and powerful groups in Spain”, highlights Laura Hernando, from Colliers, but it is little known “because the hotels do not operate with their brand, they are allied with a tour operator”. Tens of thousands of tourists seeking sun and sand in Spain sleep in its 48 establishments (10,204 rooms) each year. The vast majority are in the Balearic Islands, where he was born in 1967. Its founder, José Luis Carrillo, became best known for the Air Madrid business fiasco. He took control of the airline in 2004 and in 2006 the government withdrew his license due to numerous delays and cancellations. The bankruptcy declaration did not affect the fruitful hotel business.

From 6th to 10th place… The five companies that close the classification of the ten largest hotel owners in Spain show profiles similar to those that precede them. In sixth position appears the giant Melia, the largest Spanish hotel company from the point of view of global business, although with less than 10,000 rooms (9,118 exactly) on Spanish soil. Another chain focused on beach resorts around the world and also born in Mallorca is Iberostarwhile grouptel It responds to a model more focused on the operation of coastal hotels in Spain through tour operators. the socimi Atom is perhaps the most original example: a vehicle to channel real estate investment to the tourism sector that was launched in 2018 by Bankinter and the asset manager GMA. The classification closes it mortgagesa more modest chain as a whole but with more than 6,000 beds in Spain and certifies the absolute dominance of family businesses of Balearic origin in the top ten positions.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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