Grupo Pestana, Portugal’s biggest hotel operator, has partnered with Madeira-born soccer star Cristiano Ronaldo to develop four boutique hotels in Portugal, Spain and the U.S. The projects, which are expected to have a total of 400 rooms, will involve a €75-million investment—reportedly the largest ever for the athlete.
Ronaldo will reportedly invest half of the sum and own 50 percent of the joint venture. Under the name of Ronaldo's 'CR7' brand, the hotels will open in four cities that are "closely linked" to Ronaldo's life: Funchal, Madeira, where he was born; Lisbon, where he first started his youth career; Madrid (where he plays on the popular soccer team); and New York where he is considering playing Major League Soccer in 2018, when his Real Madrid contract expires. The first hotel is scheduled to open in summer 2016 in Madeira, and will be followed by Lisbon with the Madrid and New York City openings planned for 2017.
Pestana, founded in Madeira in 1972, has a presence in 16 countries across Europe, Africa and America. Its portfolio includes 87 hotels, six golf courses and two casinos, with an annual turnover of $240 million.
Another Kind of Football Hotel
The deal is Ronaldo's first investment outside of fashion and sport, but he is following a well-established path. Investing in hotel real estate is a popular method for athletes to protect their fortunes, and several other sports stars have been involved in major hospitality projects in recent years.
Last year, Manchester United stars Ryan Giggs, Paul Scholes, Gary & Phil Neville and Nicky Butt invested in the 133-room Hotel Football just outside the stadium, and the club itself has expressed interest in buying the property.
In the U.S., football Hall-of-Famer Bruce Smith has been connected with the industry for years, purchasing the Red Lion Inn site in Blacksburg, Va. and developing a Hilton Garden Inn Hotel in the same city. Earlier this month, Smith announced his participation in the development of a new-build upscale hotel at the Football Hall of Fame Village. Crestline Hotels & Resorts will co-develop and manage the hotel, part of a $500-million development on the Hall of Fame’s campus that launched this past September. The hotel, which should secure a brand in the coming months, will cost an estimated $100 million and is expected to have 250 guestrooms. Construction will begin early next fall, with a planned opening in the summer of 2018. Bruce Smith Enterprise LLC is a partner in several other Crestline hotels.
Basketball icons have also gotten involved in the business: Years ago, NBA star Shaquille O'Neal's formed The O'Neal Group as a joint venture with M.D.M. Development Group to help develop the Metropolitan Miami mixed-use project, which includes the JW Marriott Marquis Miami.
Tips for the Pros
This past summer, legal website Lexology offered some advice for athletes looking to invest in real estate, including building a "team" to help select assets and acting as a co-developer with a real estate professional.
The article cited former Houston Astros first baseman Glenn Davis, who owns two Hilton-branded hotels in Columbus, Ohio, and former NBA Hall of Famer David Robinson, whose Admiral Capital Group, owns three hotels in Texas and Las Vegas. "Professional athletes have unique perspectives on many different industries due to their lifestyles, which provide a foundation of research when investing in various areas," the essay noted. "Of course, simply staying in hotels does not make one a real estate expert, but it can add a valuable perspective when partnering with other real estate experts in the hotel industry."