Thomas Cook has secured €40 million for investment in its own-brand hotel portfolio in the Mediterranean.
The funds, following a first round of debt financing, will be provided by Piraeus, Greece’s largest bank. The company will invest the proceeds in properties across its key Mediterranean markets, with this round of funding aimed at Greece. It also will invest more than €7 million into its Sunwing Kallithea hotel in Rhodes over the winter and is opening a new Casa Cook in Ibiza next summer. Other investments include hotels in Majorca and Spain.
According to the company, its own-brand hotel strategy involves acquiring “underperforming, distressed and underinvested” hotels in core destinations and turning them into own-brand properties.
Thomas Cook announced its expansion into hotel ownership last year, forming a joint hotel-investment platform with Swiss investment group LMEY. The pair launched the fund with five owned and directly managed hotel properties, with a combined value of around £150 million and has since added three more sites. “We have now put all the seed assets that we have planned into this fund and we have big ambitions to have by 2020, 10 to 15 managed hotels in the fund,” said CEO Peter Fankhauser on an earnings call earlier this year.
Thomas Cook Hotel Investments currently includes hotel properties on Rhodes, Crete, Mallorca, Ibiza and mainland Spain. The investment arm was established in March to support the growth of Thomas Cook’s own-brand hotel portfolio as part of the company’s plan to maintain greater control over its hotel inventory.
“This first tranche of funding is an important step to help us accelerate the growth of our hotel fund,” said Enric Noguer, CEO of Thomas Cook Hotels & Resorts, in a statement. “In acquiring more hotels that we fully manage, we aim to generate better returns for the group and deliver higher customer satisfaction. We continue to seek further funding to enable us to acquire hotels around the Mediterranean where we can bring our hotel management expertise combined with the distribution power of our tour operator.”