With a large number of hotels on both sides of the Atlantic, how is the Barcelo Group's hotel business developing?
Raùl Gonzàlez - The situation varies greatly from region to region. In Mexico and the Caribbean, our hotels are doing very well. The figures are identical to those for 2019 and, in some cases, we are even recording more bookings for the first part of next year than before the pandemic. With long-haul travel limited, this market has fully recovered with record months for our leisure hotels thanks to the US market, domestic tourism, but also Canadians who are starting to come back.
We can assume that in Spain, and more generally in Europe, the situation is less buoyant?
R. G. - People started travelling again eight months ago, but over short distances. Today, distances are tending to increase. If you look at the results of airports focused on international travel, such as Paris CDG or Heathrow, their activity is low, whereas local airports are in a much better situation. As a result, the first airports to recover were budget hotels, then leisure hotelsThen there are the tertiary and secondary cities. Conversely, a destination like Barcelona, dependent on international tourists from Asia and the Americas, is in the most difficult situation on the Spanish market.
What about business travel?
R. G. - Within our group, we have two divisions, one devoted to hotels and the other to travel agencies, tour operating, etc. . It is interesting to note that today, it is the corporate part of our travel agency (editor's note: Barcelo manages the Spanish subsidiary of BCD Travel) that is recording the highest sales. better performance than the leisure section. This is the complete opposite of our hotel division where, in Europe, the Middle East and the Americas, it is the leisure hotels that are posting the best results. Here's my explanation: as the clientele for our leisure hotels is mainly domestic, tourists don't need to go to a travel agency to book a hotel near their home; they do it mainly on the Internet. As a result, for our agency business, the corporate segment is the most active today.
Are meetings and incentives also in the recovery phase?
R. G. - Although we are seeing a gradual return of this clientele - for example, we recently hosted an event for 1,500 people at one of our hotels in Seville, the MICE segment will be the last to recover. Faced with the spread of the virus, company top management is still reluctant to bring their teams together. But the incentive will come back, I'm sure of it. Employees need personal relationships, and companies need to stimulate and motivate their teams. We need to give the sector time to stabilise the health situation.
In the short term, in 2022 and 2023, we will still see a decline in the corporate market, but it will exceed the 2019 results within two to three years.
Do you think business travel will fully recover from the pandemic?
R. G. - For some, it will return to 100%. Others, who are more negative, expect it never to return to the levels we have seen. For my part, I think that in the short term, in 2022 and 2023, we will still see a fall in the corporate market, but that it will never be the same again.it will exceed the 2019 results within two to three years. I remain optimistic. With exchanges on Teams or Zoom, no doubt 20% to 30% meetings will be abandoned But, at the same time, with the rise of teleworking, many companies are limiting the number of employees coming into the office, or even reducing the size of their offices. As a result, they will have to organise more meetings, more team buildings to keep their employees engaged. If employees work all day behind their screens, in two or three years' time they won't know where or for whom they are working. Another point in this direction, business trips will last longerwith a more bleisure dimension. As a result, the length of stay will increase. Today, for an urban hotel, it is 1.4 to 1.6 nights. This could rise to 2 or even 2.2 nights.
Faced with the various trends that have been reinforced by the pandemic, have you adapted your hotels' offer?
R. G. - During the pandemic, we took initiatives to adapt to the situation, for example by transforming bedrooms into offices. To be honest, we sold very few.. We are also looking into long-stay accommodation solutions with property partners, but here too we are not seeing strong demand. What is clear, however, is that with the pandemic, we have made significant technological improvements and we are now ready to welcome more and more hybrid meetings in our hotels. This trend is set to continue over the long term, with organisers looking for a top-quality service to provide a seamless link between their teams spread across twenty or so different locations.
Now let's talk about your group, whose activities are not limited to the hotel business. What are its different facets?
R. G. - The Barcelo Group is celebrating its 90th anniversary this year, with, as I said earlier two business units, one in hotels and one in travel.Avoris, the result of last year's merger with the second largest travel agency in Spain, Globalia. We now have more than 1,500 travel agencies in Spain and Portugal, all of which, as I said, also include a corporate travel agency in partnership with BCD Travel. We are also present in tour operating and air travel with Iberojet. In a normal year, our group turnover amounts to 5 billion euros, making us the market leader in Spain.
As for your hotel division, can you tell us about your overall offering?
R. G. - As far as hotels are concerned, we have three models. Even though none of them carry the Barcelo brand, the majority of our hotels - around 115 out of the total - are Barcelos. the 250 we have in the worldare in the United States. 20 years ago, we acquired a listed management company, Crestline, which was a spin-off from the Marriott group. All these hotels are managed on behalf of brands in the Hilton, Hyatt or Marriott groups. At the same time, in Central America and the Caribbean, another of our main markets with around forty hotels, we own almost all our establishments, most of them large resorts like the one we have in the Riviera Maya, with over 3,000 rooms. Which makes this resort one of the largest in the world. Finally, in Europe and the rest of the world, we have around a hundred hotels operating under our brands, under all types of management. All with the exception of one hotel in Madrid, for which we have signed an agreement with Blackstone to turn it into a Canopy by Hilton.
Could your band one day appear in France?
R. G. - It's clearly one of our objectives. I'd be more than delighted to be in France, the world's leading tourist destination. However, entering this market is complicated. We are in discussions about a small portfolio of hotels in Paris to become their managers. We'd love to have hotels in ParisBut the problem in this market is property prices and rents. We always try to ensure that our hotels generate good revenues. And in Paris, that's difficult. It's not the only city: in Madrid, for example, Barcelo had no presence until recently, even though we are one of the leading Spanish groups and one of the top 30 in the world. The opportunities there weren't good enough, until we found one.
What are your development objectives outside your original market, Spain?
R. G. - In Germany, we have a hotel in Hamburg and we would also like to have one in Berlin. In this market, we signed an agreement with an owner who went bankrupt before building the hotel. In Poland, we have signed a hotels in Warsaw and Poznan due to open by the end of next year. In Central Europe, where we already have hotels in Budapest and Prague, we will have another in Lubljana next spring. Finally, we also have a good presence in Morocco and Turkey, with two hotels in Istanbul, and in the Middle East with five establishments in Dubai and one in Oman.
So your development strategy is region by region?
R. G. - We don't want to have a flagship hotel in every country, but first to develop a critical mass from which to expand a network of hotels. This will also be the case for Sri Lanka and the Maldives where we have signed a partnership agreement with an owner who is developing hotels in these two countries. We have a huge project with them in the Maldives in particular. Over the next few years, this part of the world is going to grow faster than Europe, which is why we want to be big enough in these markets.
Your group has moved from a single brand, Barcelo, to a multi-brand strategy. Why is this?
R. G. - For a long time, we grouped our offer around a single brand, Barcelo, named after the family that created the group. Today we have four brands following the acquisition of Occidental Hotels, a group based in Madrid but with all its establishments in the Americas. This group had several brands, three of which have been retained: Royal Hideaway luxury resorts, Occidental upmarket hotels and the Allegro brand in the lifestyle budget segment. As a result, our offer is evolving towards a multi-brand strategy and some of our Barcelo hotels are being rebranded under one or other of these brands. Depending on the opportunities that present themselves and the financial interest that each brand can bring, we will use one or the other in our development.
