Founded in 1956 in Palma de Mallorca, Spain, Meliá Hotels International has more than 350 hotels worldwide in 40 countries. Now, with its 60th anniversary taking place this year, the company is making big moves to assert itself in the U.S. marketplace. Meliá has 25 hotel openings planned this year, and in the first half of this year it is opening its first two hotels in North America.
Meliá debuted its first U.S. hotel with the opening of the Innside New York NoMad at the beginning of March. The hotel, located in New York City’s NoMad neighborhood, is a 313-room boutique hotel that is not only the first Innside hotel in the city, but also Meliá’s first in New York.
According to Andre Gerondeau, EVP of hotels for Meliá, the company is confident enough in its knowledge of the New York market to plant its flagship hotel there, having once been partial investors in the Paramount Hotel. Being a business lifestyle hotel, the property’s location had to be carefully chosen.
“It was a combination of strategy and opportunity,” Gerondeau said. “Manhattan is a hot destination any way you look at it. Furthermore, we felt it was the perfect building, built from scratch.”
More importantly, Gerondeau said that it was not difficult to develop the property in New York due to the current interest in bringing European brands stateside. The Innside New York NoMad was developed with the assistance of an undisclosed private investment fund, one with interest in foreign brands. This demand is fueling what looks to be a future of active development from Meliá in the U.S.
“Our vision is to have three to four hotels in New York under different brands,” Gerondeau said. “We want to be in five to six key cities in the country with two to three brands in each. California, Texas and Florida all factor into that, which leads us to Miami.”
Open in the sun
In addition to opening its first New York hotel, Meliá is also opening its first Miami property, the Me by Meliá, which is to open its doors this spring. The location was chosen not only because Meliá’s American headquarters is located in the city, but also because Miami’s many microenvironments mirror that of New York.
Meliá chose the Me brand for the 129-room property because of its emphasis on music and events. “The hotel has a Latino flair that is important in both New York and Miami,” Gerondeau said. “It’s also the first hotel in the states for the brand. We are excited not only for the hotel but for the brand.”
This strategy of slowly rolling out select brands in tier-1 cities, picking the initial brand based on the location and then filling in the blanks with other brands, mirrors Meliá’s expansion into Germany. The company is similarly and simultaneously moving into the U.K., Colombia, Chile, Brazil, Indonesia and China with the same strategy. In addition to its U.S. investment, the company is involved with U.S.-based brands that are developing in Meliá’s home country, Spain. The company recently signed a deal with Starwood Capital Group for seven hotels in the country.
Marina Carrillo, development manager for the Americas at Meliá, said that the company is opting to be flexible rather than focus on either ownership or management. “We need to understand what our owners are concerned about," Carrillo said. "Our owners and partners are key to our present and future; a pillar of our strategy as a group is to enhance alliances with strategic partners to fuel quality growth."
“We see an interesting trend in the global investment environment; there were more [hotel] transactions in 2015 than ever before both in Europe and globally,” Gerondeau said. “The ones with the strongest footprint will be the ones that generate the most, and will be the more resilient.”
It is Meliá’s cautious streak that has led to the development of its first two U.S. hotels in markets that can withstand a downturn and thrive in the limelight. “We have a solid footprint between urban and leisure; strong, safe destinations,” Gerondeau said.
On expectations for the future, Gerondeau said Meliá forecasts strong summer seasons for the next three to four years, followed by uncertainty as to the strength of the market. Gerondeau is waiting to see the results of Q1 2016 before making predictions for this winter, but caution is the word that comes first to his mind.
“After Sept. 11, U.S. companies changed their strategies, adding a lot of volume,” Gerondeau said. “We went through a crisis in Spain that similarly taught us a lot. We are happy [the economy] came back but ever since we are cautious. 2015 was probably our best year.”