IHIF's Road to Berlin: Meliá's global development head

IHIF Road to Berlin

Maria Zarraluqui, global development managing director for Meliá Hotels International, has big plans for the Spanish hotel chain, including openings in New York and Miami, among other global cities.

At IHIF, Zarraluqui will be part of the panel "Resorts: Creating Value Through Renovations and Conversions" alongside Horacio Alcalá, CEO of Alsotel; Ignacio Sanjurjo, partner, Deloitte Legal; and Marc Topiol, CEO of Sotogrande SA.

Here, she shares her thoughts on the collective global hospitality industry, Meliá's development strategy and hot topics of debate, such as consolidation and brand expansion.

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MariaIHIF: How do you foresee 2016 shaping up as it relates to the global hospitality industry: What will be the big stories or trends in hospitality development and investment?
Zarraluqui: As we have seen during 2015, the market is changing. We have bigger and stronger companies as well as brands originally from Europe or the U.S. positioning themselves in Asia, or Asian brands breaking through into Western markets. The competitiveness of OTAs and holiday rental sites is changing our clients' perspective of a business or leisure trip. As hoteliers, we need to offer something extra, not mere quality lodging and breakfast. We need to be ready to offer lifestyle experiences that will be part of our clients' memories forever—and we do this by improving our hotel brands and the value proposal they provide, as well as by getting closer to our customers through the digital world. Technology is not anymore adding value to a hotel, but it has become an essential part of it. Investment in technology is a must to be always ready to satisfy the up-and-coming generations that were born in the era of the app and social media. Technology is the key for our long-term sustainability and competitiveness as hoteliers, in a 100-percent connected world.  
 

IHIF: What are Meliá's global goals for development in 2016?
Zarraluqui: Our plan is to follow the successful growth path of the past Strategic Plan 12-14, in which the group signed more than 100 hotels and opened flagship properties in key markets such as Paris (Meliá la Defense), Dusseldorf (Innside Düsseldorf Haffen), Milan (ME Milano il Duca) and Ibiza (ME Ibiza), both focusing on traditional, consolidated markets for us, as well as on emerging markets. For 2016, Meliá will continue to grow in capitals and major cities in Europe, the Middle East and Latin America, and will fuel growth in resort areas and leisure destinations. The goal of development is also to increase our portfolio growth as a lever to generate brand recognition—that is why we are convinced that the openings of Innside New York and ME Miami will be key to our growth in the U.S. and will increase our brand awareness also for our Caribbean properties. As worldwide leaders in resort hotels, we are confident that our track record and know-how on mature resort destinations needs to go a step forward and we expect to operate the first Paradisus, the all-inclusive experience now only in the Caribbean, in Southeast Asia, as well as introduce our Sol brand, which has been highly successful in the Mediterranean, Caribbean and Southeast Asia.
 

 

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IHIF: What is Meliá's preferred growth mode? Are you focused on ownership or management?
Zarraluqui: Even though we started operating hotels 60 years ago under ownership of Gabriel Escarrer Juliá, our founder and current chairman, Meliá is currently based on an asset-light strategy, structured around a development plan through low-intensive capital formulas, enabling Meliá to become a management company and owner of specific core assets, thanks to strengthening the positioning in the upscale segment or by exposure to high-growth markets. However, our 60 years, being hotel owners and operators for third-party owners, has show us that flexibility is as important as having a strong “Meliá Management System.” We need to be flexible to understand what our owners are concerned about and being able to offer creative models of agreement according to each market or owners' preference.
 

IHIF: At IHIF, you are part of a panel on resorts and creating value through renovations and conversions. What do you expect to be the hot topics of debate and how does Meliá fit into it all?
Zarraluqui: It is an excellent topic as it is a concern of many owners today in leisure destinations. After some complicated years in Europe for the Mediterranean economies, many resort areas haven’t been able to invest in their assets to keep satisfying their clients. At Meliá, we learned that the resort concept, considered a commodity, needed to be transformed to today's traveler expectations. The transformation had to be dramatic in design, technology, service and experiences. This is the idea behind the evolution of our Sol brand and the creation of the four concepts that suit everybody’s kind of holidays (families with children, families with teenager or even the adults-only experience). This powerful idea and proven record gained us the trust of partners, such as London Regional, Avenue Capital and Starwood Capital, who, together with Meliá, converted and renovated more than 10 of our assets that after rebranding changed their performances figures completely. In some cases, even increasing ADR, RevPAR and GoPAR over 200 percent. We think these concepts have ignited a whole transformation within the resort industry, and will continue to be strongly successful in the Mediterranean and a great opportunity in the American and Asia leisure destinations.
 


 IHIF: 2015 was a year of consolidation—we saw it with the announced Marriott/Starwood and Accor/FRHI mergers, and IHG's acquisition of Kimpton—as hotel companies looked to grow scale, potentially as a way to fortify themselves against disruption (OTAs, Airbnb). Do you expect more big-scale M&A in 2016?
Zarraluqui: We don’t envision anymore such announcements in the immediate future, but when it comes to us, we feel comfortable with our current situation, with a solid balance sheet, a consolidated business model and a growing reputation and positioning of four international brands. Personally, I believe more on punctual agreements and operations, such as the ones we are promoting with partners like Starwood Capital–with whom Meliá created a new JV last year that began buying 80 percent of six of our best Mediterranean resorts, that are being transformed and repositioned.
 

IHIF: What do you look like to get out of an investment conference? Where is your best time spent?
Zarraluqui: IHIF is the meeting point of hospitality in Europe. It is the event where as operators we can meet with investors, developers and other important players in the market. It is also important to understand new trends in the market, new brands being launched and new topics being discussed in the panels. The best time spent is when meeting with an interesting network of active players in the market and understanding where hospitality in Europe is heading to.

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