Gustavo Jiménez
Expansion and Urban Hotels Director
Barceló Hotel Group
View from the Top

Spanish Chain Looks to Mexico

Wed, 11/01/2017 - 12:51

Q: What is Mexico’s position within Barceló Hotel Group’s business strategy?

A: Mexico is the most important country in our portfolio. Although we have many more hotels in Spain, Barceló Hotel Group has almost 8,000 hotel rooms in Mexico since the incorporation of the Barceló México Reforma Hotel. Our hotels in Mexico are responsible for the company’s largest growth, revenue and profit, with our five-hotel, 2,700-room Riviera Maya resort being the biggest contributor.

Having a presence in the country’s most important cities is integral to our strategy. The Barceló family’s business plan dictated that we focus on US beaches until the end of 2013 and then start focusing on city destinations. The growth Barceló Hotel Group has experienced on the other side of the Atlantic has been more balanced between beach and city destinations. Despite our growth in the urban segment in Latin American countries such as Guatemala, El Salvador and the Dominican Republic, Mexico is the country where we are most interested. The city destinations we are targeting are Guadalajara, Monterrey, Leon, Merida, Campeche city and some oil cities in the Gulf of Mexico, such as Coatzacoalcos.

Q: How does Barceló Hotel Group optimize the operation of assets like Barceló México Reforma?

A: We have a large number of assets. Of the 250 hotels we operate in 21 countries around the world, about 50 belong to the Barceló family. On the contrary, the Mexican hotel giant Grupo Posadas, with 150 hotels across all its brands, only owns about 10 of them. This means Barceló Hotel Group owns five times more hotels than its biggest Mexican competitor. This provides several advantages, including greater profits because there is no need to pay for branding. In terms of hotel operations, as a company policy, if we buy, lease or associate with somebody in a hotel deal, this hotel must carry one of our brands, whether that be Allegro, Occidental, Barceló or Royal Hideaway. It must also be operated directly by Barceló Hotel Group; no hotel operated under our brands is a franchise.

Q: What business model does Barceló Hotel Group follow when building new developments?

A: Barceló mainly follows two different models. The first entails associating with a fund and having it build a hotel for Barceló to operate. The second involves an investor offering to build a hotel and to lease it to Barceló Hotel Group. We would like to grow in terms of operating contracts, leasing contracts and co-investment instead of making so many new investments in terms of building new hotels. Part of the growth we experience in the short term will be by participating as a minority investor while having operating contracts with investors.

Q: What are Barceló Hotel Group’s key goals in the short term?

A: We want to establish in the city of Campeche, where we are building a new hotel. Barceló Hotel Group is currently exploring options for growth in Coatzacoalcos, Guadalajara, Leon and Monterrey. These are new projects that will involve the entire construction and operating process. Depending on the type of destination and size of the project, some hotels will take longer to complete. Building a new 125-room business hotel like that in Campeche can take 18 months while the Barceló 300- room project in Guadalajara can take up to three years.

We also aspire to have 30 percent of the company’s commercial activities carried out electronically. Barceló Hotel Group’s digital and e-commerce division has already achieved 20 percent of the business brought in. We need to let our usual customers know that they can now find the Barceló experience they know and love in city destinations too. Barceló Hotel Group hopes the Barceló México Reforma will be helpful in leveraging the urban hotel services we develop and in boosting our market share in this segment.