BERLIN — Resorts throughout the sunnier destinations of Europe are becoming far more important to hotel portfolios as the segment gathers guest demand, price premiums and investor appetite.
No longer are resorts solely the plaything of package-travel and charter-flight firms and all-inclusive rates structures.
European resorts are moving beyond all-inclusive models and trip packages, said Miguel Casas, managing director of hospitality at Madrid-based investment firm Stoneweg Hospitality. During a session at the International Hospitality Investment Forum EMEA, Casas said resorts have more room to add value than other hotel types, such as urban hotels, which was the firm’s previous investment focus.
“There is more control. We are the investment and asset manager, and now it is not just the case of having [a hotel management agreement] and letting the operator get on with it,” Casas said.
Founded in 2021 as part of parent Stoneweg Asset Management, Stoneweg Hospitality currently has 10 hotels with a room count of more than 1,600 and a value of assets under management of approximately €500 million ($547 million).
Casas added Stoneweg Hospitality is now starting on a “second adventure” in Southern Europe.
One example Casas gave was of the 195-room Kimpton Los Monteros Marbella, which it has co-owned with Bain Capital since April 2023. Following a renovation the hotel — formerly the Hotel Los Monteros — the property was affiliated with IHG Hotels & Resorts’ Kimpton Hotels & Restaurants brand “to get the business model to its maximum levels.” The resort has added value via the creation of a Dolce & Gabbana-branded beach club, La Cabane, and a Michelin-starred chef, José Carlos García.
David Vely, vice president of development at Paris-based resort owner and operator Club Med, said his firm continues its journey of moving up the hotel segments. He added Club Med invented the resort concept in 1950 and the brand currently has 70 resorts.
“We were hovering somewhere in the midscale, the most expensive, terrible place to be. … COVID-19 was the penny-dropping episode. The moment people became deprived of spending time with their families, demand surged,” he said. “The bounce-back was very strong and very early, it has not ended and, since we started, it has been experiential. The proof is that now a lot of the mainstream brands have moved into the space, where before they were not even thinking of the space.”
Developing in-house resort brands and co-branding in the food-and-beverage space are crucial steps to adding value, said Stephane Baghdassarian, senior vice president of hotels and restaurants at family office Groupe Barrière. Founded in 1912, the company has 19 hotels and resorts and has been owned by the same family for four generations.
“We do have stand-alone F&B, but we also have acquired third-party brands to incorporate them into our ecosystem, some of which we can operate as franchises,” he said, adding that such moves help creates a destination.
As a result, Groupe Barrière's hotels have raised average daily rates by 5%, Baghdassarian said.
Lasting flavor
James Chappell, global business director at business advisory Horwath HTL, said resort investment was far from being the main game before the pandemic.
“Now it is flavor of the month,” he said.
More and more institutional investors are turning to European resorts, Casas said.
“We’re long-term investors, but [we’re seeing others] buying in with leases. That is different to what we do we do. We do [hotel management agreements] and take the full risk,” he said, adding there was an emphasis in his division to shift to new assets and reallocate capital.
Investors such as Swiss Life and Covivio are new players in the sector, Casas added.
“I have too many urban hotels, and too few hotels in relation to office. We continue to look at resorts, and we have co-invested in such deals. We’re not partnering with permanent capital, but that might change. We did well after COVID-19 when prices were opportunistic, but that does not mean our transactions will not continue,” he said.
Baghdassarian said his firm’s new generation of owners has an appetite for new development of European resorts, which bodes well.
“In Lapland, in the desert in Saudi Arabia, at AlUla. We are very curious,” he said.
For Club Med, there is more interest in mountain resorts, Vely said.
“Mountain resorts are very difficult to replicate,” Vely said, adding in early 2025 Club Med unveiled its renovated 350-room resort Club Med Serre Chevalier.
“One trend we’re trying to push is summer mountain,” he said, referring to the broadening of mountain resort seasons beyond the traditional winter season.
There are other options to boost value, panelists said. Co-branding with wellness providers and niche brands and adding tailor-made services for guests have shown good results, Baghdassarian said.
One hotel Stoneweg acquired in the Canary Islands has dropped the asset’s all-inclusive component from 90% to 30% and provided different booking options, Casas said.