HomeHotelJavier Coll, Hyatt: "Institutional capital provides and energizes the market"

Javier Coll, Hyatt: “Institutional capital provides and energizes the market”

Inclusive Collection closed the year 2023 with more than 110 hotels open, maintaining the leadership of Hyatt as the largest all-inclusive chain in the world. Last year they signed an agreement with Globalia to manage their hotels in the Caribbean, at the end of the year they will open two establishments in Mallorca and Tenerife, and they are still active looking for management companies to grow. Javier CollGroup President of Hyatt Hotels Inclusive Collection, explains in this interview with HOSTELTUR how he sees the business, the opportunities and strategies for Europe.

How is Inclusive Collection’s expansion strategy defined?

For the business to work, destinations have to have a minimum size, quality and tourist influx. We see the potential of the destination to grow and then we filter. We are growing in cities and on the coast. In the south of Spain we see that there are destinations in which one can build or change the brand, but then there are others that, no matter how much money one puts into it, have physical limitations or moratoriums. That limits the brands you can use, due to the type of asset and the size of the rooms.

What plans are there for Europe?

We are in Spain, Greece, Bulgaria and Portugal. Our intention is to continue growing in these countries, given that we already have structure and organization in terms of resources, but also expand to Italy, Türkiye, Croatia. We have a lot of room for growth in Europe. And if we talk about EMEA, we look at North Africa and the Middle East. We are actively working on closing agreements and we see opportunities in Asia-Pacific, in destinations such as bali either Phuket.

Expansion in Europe comes hand in hand with generational change in companies, but they are also betting on inorganic growth.

Hyatt closed several operations in recent years: an agreement with Linder, an agreement with Mr. & Mrs. Smith and we have agreements with families here in Spain. We are always actively analyzing two or three acquisition operations of management companies, who created their own brand and have an attractive number of hotels. It is one of our growth strategies. We have put more resources and dedicated a special team for inorganic transactions. It is important, especially in Europe, because there are more hotel portfolios than in America, where the market is less atomized.

More information

– Javier Coll (Hyatt): “One of our objectives is the purchase of management companies”

The goal is to maintain the leadership position in all-inclusive, gained after the purchase of Apple Leisure Group.

We are already the largest all-inclusive chain in the world, with about 110 hotels in 40 countries, but our intention is to have a global presence. The idea is to consolidate that position and continue. It is not because we are the largest, but it is a matter of scale, because it makes operations much more efficient and makes us more profitable. Our idea is to offer products in any destination that our customers are looking for. Our plan is take the formula that has worked for us in the Caribbean and expand it in other places. Fortunately there are opportunities.

Javier Coll, Group President of Hyatt Hotels Inclusive Collection. Source: Hyatt.

We also see the formula of replicating the model that worked in the Caribbean among Spanish chains, which increasingly have a presence in exotic destinations. For what is this?

The part of the profit, of Ebitda, that comes or came from America was enormous. Very quickly it surpassed the share they generated in Spain, because the country has physical limitations to grow, but also limitations such as labor costs or competition. When they entered America there was a very strong demand, low costs, including labor costs, and the benefits were higher than what they could find in Spain. So, they grew very quickly in those areas and the profit percentage became very important.. Chains need to expand to continue increasing that Ebitda.

What are the options? America, where everyone is, and markets relatively similar to what the Caribbean was 30 or 40 years ago. The entire Asia-Pacific part is not behind, but it is not at the same level of progress in the leisure and all-inclusive business, and the costs may be favorable. It is a double issue, growth and profitability. That is the reason why we are all seeing those destinations

The contribution of funds to the hotel sector

What is the reason for the funds’ interest in vacation hotels?

If the sector was not profitable, no one would have gotten involved, because the analyzes are exhaustive when investing. This started a few years ago. The funds were not interested in leisure and invested in city chains. Alúa Hotels & Resorts It was one of the precursors of working with funds and that was the main attraction we saw when analyzing its acquisition (by Apple Leisure Group at the end of 2018). They had that ownership segment, it was un know how very interesting in Europe and served as a platform for us to grow here. Institutional owners realized that, after having gone through all the crises, leisure came out very well. Therefore, they saw this as a way to diversify their portfolios and reduce risk.

What does the presence of investment funds in the hotel market imply?

It is very important that this institutional capital is present in this business, because it provides, it is a source of financing and growth for the chains. This generates a transformation, it makes the market more dynamic because you have more competition. And competition generates innovation. It’s good for everyone

Funds and international chains usually go hand in hand, so it is no coincidence that large hotel companies are investing in vacations. Hyatt’s purchase of ALG was a kick in the pants.

Most of these chains are urban. Hyatt’s DNA is urban and the acquisition of Apple Leisure Group was an impressive commitment to leisure and diversification. The mixed formula is a crucial part of the company’s strategy. They realized that all-inclusive is very profitable, that it has a very strong demand and that it is a way to offer diversity to frequent customers. We are self-feeding, because those who travel for work to urban hotels throughout the year can spend their loyalty program points in the all-inclusive segment. Complementarity is being demonstrated.

Javier Coll: 'Institutional capital provides and energizes the market

The Zoëtry Mallorca hotel is a 5-star hotel located in a 14th century house. Source: Hyatt.

The luxury market in Spain

Hyatt, and Inclusive Collection in particular, is characterized by having luxury hotel brands. How are you seeing the segment in Spain?

In Spain, luxury has had very important growth percentages, because when the sectors are small and grow, it is noticeable on a percentage basis. There is still a lot of interest because the costs are relatively similar in a 4 or 5 star hotel, but the rates are much higher, which allows you higher returns. Many chains have understood this and luxury tourism has begun to push.

The costs are similar, but the marketing strategy changes

The takeoff period for the hotel when you convert it into a 5 star is longer than it would be in a 4 or 3, because you need to consolidate the product and make it known. Marketing is not the same: in the 5-star ones there is business from tour operators, but you have to push the direct and knock on the doors of more specialized agencies. That means that our large volume will be in 4 stars, because we will find more hotels and they are easier to market.

However, Spain is becoming a global benchmark in the segment, which is perfect for us because we grew up with luxury brands, but the market is what it is and many times not even putting all the money in the world into CAPEX, You can convert the hotels, because they do not have the bones of 5 stars

What happens is different in destinations where there is more construction.

Each destination has its particularities in terms of luxury. There are destinations that have a number of hotels that are more convertible into luxury and others that have less. There are markets that are already completely built, there are moratoriums and you have to convert what is there. We have plans in the Middle East, in countries that want to develop areas and become important tourist destinations. There we will see more 5-star opportunities and hotels built from scratch, designed by us and in which you end up with an ideal product for the luxury client. That has been part of the success we had in America. In Europe that is more difficult, simply because there is not the same terrain or the same access to that type of product..

Learn more about Hyatt

– The second Thompson hotel in Spain will open its doors in 2026

– Hyatt strengthens its luxury portfolio with more than 35 new hotels and resorts

– Inclusive Collection will open 6 hotels in the Caribbean until April

Source: Hosteltur



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