HomeHotelCape Verde and Jamaica, two destinations in the focus of HM Hotels

Cape Verde and Jamaica, two destinations in the focus of HM Hotels

HM Hotels It has 24 hotels open and in the last two years they have achieved record results, thanks to the recovery in demand and efficiency in cost management. The chain is confident of maintaining momentum and projects a 2024 with more occupancy and better rates. That optimism pushes Toni Horrach, general director of the company, to analyze projects to strengthen itself in some destinations, but also to disembark in new cities and take the proposal beyond Spain, Mexico and the Dominican Republic. The interview is part of the latest HOSTELTUR magazine.

Interview with Toni Horrach, general director of HM Hotels

What is your assessment of 2023 and what do you expect from 2024?

We have had two and a half very good years. Since the end of COVID, which made sense to go out almost vertically, there have been record numbers. 2022 was the best year for us, and for many, and 2023 has surpassed the previous one. These have been two years in which things have turned out even better than we expected and we are optimistic, trusting that the trend will continue in 2024. Proof of this is the ADR, occupancy and the expected increase in turnover.

At the occupancy level we expect to make six points more than the previous year and 14% more sales. We have 23 hotels and we expect an occupancy of more than 81%, an ADR of 145 euros and a RevPAR of 120 euros. We have learned that you cannot venture into anything, because then reality falls on you, but if nothing strange happens, we are within a very good inertia and tendency.

Has 2023 also been good at the profitability level?

Given the rise in electricity costs, water costs, and purchasing from suppliers, we have had to improve a lot in that aspect and buy better and better to be more efficient. That know-how We have done it thanks to the crises we went through and it has resulted in an improvement in the way of doing things. We are trying to be very demanding with the numbers. Profitability has recovered. Ebitda, the operating result, from 2022 to 2023 has risen 17.5%, which is a lot.

Has this situation been the same in all destinations?

This is more in Majorca, where we have 15 hotels. We have one in Tenerifeanother five in Dominican Republic and three in Mexico. Mallorca has been going like a shot for two and a half years; Mexico not as much as before, but it is going well because we have very particular hotels on the island of Holbox that have obtained the highest returns of the company, in terms of housing, but now the result is stabilizing. We landed in Tenerife in June 2023, with 260 beds, it is a hotel with low-cost operations and we are very happy.

In the Dominican Republic we are more affected, because 7 out of 10 of our clients were Russian and with the war we lost that market. Now we are trying to compensate, not with the Dominican client, as we did originally to make a quick change, but rather look for Latin Americans as natural clients of those hotels. Then we are a lot with online and specific agreements with Canadians and French. We are having a really hard time getting the price that we get in the Dominican Republic.

Toni Horrach, general director of HM Hotels at the HM Palma Blanc hotel, the most sustainable establishment in the chain. Source: Hosteltur.

Due to this difficulty, have you decided to reposition the hotels in the Dominican Republic?

He Whala! Bayahibe we have turned it into HM Alma de Bayahibewe have raised quality standards and prices, and the hotel Whala! Bavarian It is still Whala, but part of it is now the HM Bávaro, which is above the beach and is a bed and breakfast, which is very new in the Dominican Republic, because it is a destination where it seems that everything must be all-inclusive. This is one of the changes we made and we think it will be very good to reverse the Dominican trend.

More information

– HM Hotels repositions and rebrands 2 hotels in the Dominican Republic

Are there changes in the sending markets to Mallorca?

Yes, but the natural customer is still the German. The most notable changes are in French, Nordic and American. Also in that, increasingly,The all-inclusive has gone further back and now almost everything is breakfast, only accommodation and some half boardand 80% is online.

Do these new habits and markets bring operational improvements?

We have made a commercial change in nationalities and in the way of selling, which also has to do with this change in the diet, which means lower costs and better operating results. Because, on the one hand, you have the labor cost that all-inclusive entails, and on the other hand, you go to online sales, which allows the price to change every day and, in the end, the difference is big. In the past, you agreed on prices a year before, they were static and now they are dynamic, so you can change them every day in all the hotels. It is a very obvious thing, but it is relatively recent and we are doing it better and better.

The great challenge of the year

Beyond the good results, what has been the great challenge of the year?

The biggest challenge has been maintaining standards with purchases, choosing the best options and the best suppliers at the best price. But Personnel management, by far, is the most notable thing in the last two years. We have a percentage of sick leave that we have never had before and the problem that they go to their neighbor because they give them a little more, or accommodation. It had never happened to me before and in 2023 seven people left a hotel kitchen at once. Fortunately, we have more hotels in Mallorca and we solved it, but by removing people from establishments that also lacked staff. This is happening across the board.

You mentioned that they leave because they are paid better elsewhere, but there is also the difficulty for workers to find housing

The thing is that tools should be put in place or a way found to make the issue of accommodation easier for us in certain municipalities.

I would have no problem making modules for staff in my own hotel, but it is prohibited. In a hotel you cannot do them because the use is tourist, not residential. There is a new government and I think we have to find a formula to facilitate that

Qualitative growth

What expansion plans do you have at HM Hotels?

I am more concerned about qualitative growth than quantitative growth. The quantitative too, because we were born in 2002 and we already have 23 hotels. Growth has always been one hotel per year, we have maintained it and I am always looking at projects. In addition, of the 23 hotels we own 22, so that means that growth cannot be so rapid. If we prioritized taking franchise or management hotels, each year we would have 10 more hotels…

Why not management?

I like to buy what I use and what I dedicate myself to every day. It is true that management would allow for greater growth and I do not renounce that.

Cape Verde and Jamaica, two destinations in the focus of HM Hotels

The whala!tenerife hotel will open its doors on April 1, 2024. Source: HM Hotels.

What destinations are in focus for HM Hotels?

I’m looking at a hotel on the Salt Island in Cape Verde, in Jamaica, in Tenerife, in the Dominican Republic… but to make one I have to look at maybe 50. In Italy I’m also looking, but it’s very expensive. And in the end it depends on whether the operation is interesting, but you discover it as you progress. We have flags in Mallorca, the Dominican Republic, Mexico and now Tenerife, but I wouldn’t mind studying things in other places, in fact I do, I looked at one in bali and I would love Maldives.

More information

– HM Hotels bets on the Canary Islands market with a new hotel in Tenerife

Is there news for hotels in Mallorca?

At the Whala! Isabella, we are going to raise the standards, without changing the brand. We hope it will be open in June, with the same name, but 4 stars and 27 more rooms.

Mallorca tourism

We thought that after the pandemic the phenomenon of tourismphobia would not return, but it is still present, do you think there is a solution?

It’s very complicated. We Mallorcan hoteliers are frowned upon here, whether we stay or go away, and so do tourists. It is an issue that saddens me greatly because of everything that tourism brings to this community. Tourism really is one of the most productive sectors, and I’m not saying this because I dedicated myself to tourism, I can think of few sectors that generate more for so many people.

What is needed to improve the image of the sector?

Value all the good things about tourism, of which there are many, and that is one of the keys to employment. Many people do not want to work in the sector when we are actually the ones who have increased salaries the most in all of Spain.

Source: Hosteltur



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