Horacio Alcalá founded Alsotel, a specialist hotel real estate investment and operating firm, in early 2015, after 20 years of international hotel experience in various countries. Alsotel invests in hotel assets across Spain and Portugal and operates them through third-party franchises.
Alcalá will participate in a panel on the hospitality potential to be found in the Iberian markets of Spain and Portugal at the upcoming Mediterranean Resort & Hotel Real Estate Forum, Nov. 30-Dec. 2, at the Fairmont Rey Juan Carlos, in Barcelona. Juan Gomez Vega (director of Lone Star Europe) and Angel Palomino (director of Azora) will also participate in the panel.
Ahead of the conference, Alcalá discussed the state of the hospitality scene in the Mediterranean region, opportunities for development on the Iberian Peninsula and the challenges the region still faces.
1) How would you characterize, overall, the state of hotel investment and development in the Mediterranean region?
Alcalá: It is a complicated puzzle at the moment. Fundamentals are strong, so long term investment is sound, but at the moment I would limit it to Southern Europe and in the mid term seize opportunities in northern Africa and Turkey. Spain and Portugal are my strongest bet.
2) What are the current hospitality investment and development opportunities as you see it across Spain and Portugal?
Alcalá: Quality three- to five-star hotels in vocational, good quality upper and luxury urban and budget/limited-service hotels.
3) How has the Brexit and other recent instability (terrorism across Europe) impacted hotel investment and development?
Alcalá: The impact has been very heavy for us. All investments where questioned for some six weeks, and those where the UK market has a significant component such as leisure and vocational hotels in Spain (Costa del Sol & Marbella), more so. There is a new risk component and business confidence and investor confidence in general is lower.
4) How would you characterize the state of lending in the Mediterranean region? And, does the mode of growth favor new development or acquisitions?
Alcalá: it is very poor. Lending is expensive or inexistent for new projects, where as for existing ones (new capex) it is easier.
5) You are based in Madrid, and we have heard about the state of Spain’s economy and unemployment. What kind of impact has that had on Spain’s major cities and also its secondary markets as it relates to hotel investment and development?
Alcalá: Madrid and Barcelona are hot markets, together with the mature coastal regions. However, the rest of the country is still getting out of recession, with unemployment being one of the major drawbacks. Secondary markets in Spain are some 12 to 24 months behind the major cities.
6) The resort market was hit hard after the global recession. Has it come back, where are we seeing the development and by whom?
Alcalá: We are seeing it bounce back, and it has more to go once the rest of the country’s economy and unemployment situation improves. New development is still slow—we are seeing the repositioning of assets on a very atomized market.
7) How have interest rates impacted investment in the region—good or bad?
Alcalá: For the moment, the impact is good.
8) As we move through 2016 and into 2017, what are the key issues people will be talking about as it relates to hospitality investment?
Alcalá: I think the short term uncertainty created by Brexit and terrorism will continue, mainly Brexit as the consequences are very unclear yet. The other one is being able to count on growth—for how much longer, is the question.
9) Why do you attend MR&H and how does it help your business?
Alcalá: It gives me visibility and allows me to see other major players and exchange views, get updated on what others are doing, and meet new people of course.
The Mediterranean Resort & Hotel Real Estate Forum will be held at the Fairmont Rey Juan Carlos, in Barcelona, Nov. 30-Dec. 2. For more information, the agenda and speakers, and to register, visit www.mrandh.com.