Pestana Hotel Group, a Portuguese operator, celebrated its 50th anniversary last year and intends to stick with the formula that has brought it to its current position as a global player with significant recent expansion.
That formula, according to Chief Development Officer José Roquette, is to operate only four- and five-star hotels, to own or lease every property and to maintain a strong balance sheet.
Named after its founding family, which still owns the company, Pestana has seen the most intense growth in its history in the past decade, even though things were slowed by the pandemic, according to Roquette.
He said hotels that were under construction were completed and then opened once the crisis was over. At this point, there are multiple projects in Portugal and Paris, and the company is back to being active in seeking development opportunities in Europe and elsewhere. The operator currently has more than 100 hotels with more than 12,000 rooms under multiple brands.
The priority, Roquette said, is to establish brands in major cities in Europe. But Pestana claims to be the first Portuguese hospitality company to open a hotel in the U.S. and this market is also on the radar. There are now three hotels in North America — two in New York City and one in Miami with several options under consideration. Roquette said new proposals are coming every week.
While the focus has been on cities, “We could be doing more on the leisure side, and hope to do so in the future,” Roquette said.
Pestana’s brands include:
- Pestana Hotels & Resorts: the core 4-to-5-star brand, with more than 50 properties in Europe, Africa and the U.S.;
- Pestana Collection: A five-star hotel brand that now has a portfolio of seven — five in Portugal and others in Amsterdam and Madrid;
- CR7: In a partnership with soccer legend Cristiano Ronaldo, whose uniform number is 7, these are lifestyle hotels targeting younger travelers;
- Pestana Pousadas de Portugal: Formerly government owned, these 34 historic inns were privatized and taken over by Pestana in 2003. They are all in Portugal, but the company would be open to locations in other countries if similar historic properties are available, according to Roquette.
Roquette said no matter the brand, all hotels are four- or five-star, although some of the four-star properties might lean toward limited service in markets such as New York, where costs call for it.
“We always have a lot of flexibility,” he said, “because we own most hotels and don’t have to explain ourselves to owners.”
While Pestana has no franchises and no third-party management arrangements, 15-20% of hotels in Europe are leased, an arrangement that is more common on the continent. In some markets, for legal and other reasons, ownership is not possible and leases are the only option.
Pestana’s Portuguese heritage does not have a strong influence on operations.
“We are a universal brand,” Roquette said.
There might be Portuguese-created artwork or some culinary influence on the menu, but that is not a predominant element, he said, adding that it is more important to highlight the specific market.
Pestana had more hotels in Brazil at one point, but now has only three because of economic conditions in the country. The company is open to expansion in South America, but does not necessarily look to serve Portuguese-speaking communities or countries.
Still, Roquette said, Portugal’s current popularity with tourists, expats and digital nomads is a positive for Pestana as it shares in the country’s strong traditions around service and safety.
What makes Pestana work is value for money and great locations, he said. The Pestana Collection brand boasts ”very special locations and unique buildings like palaces.” These will only be developed when it makes sense to invest a bit more in that segment. Many of the group’s properties are conversions.
With the CR7 brand, Pestana decided to “refresh” its four-star approach with a specialty lifestyle hotel positioned somewhere between a W Hotel and Radisson Red. Ronaldo is a 50-50 owner although Pestana handles all management.
The athlete has a major contribution to make on the marketing side because of his visibility, Roquette said. There is a lot of interest in this brand, including in the Middle East where Ronaldo is now playing. (He joined Saudi team Al Nassr earlier this year.)
Pestana has vertical expertise in a lot of areas — including construction, Roquette said. With its ownership model, the company is able to quickly develop an investment budget that makes sense in a market.
“We are not dependent on talking to investors and trying to negotiate for the land,” he said.
A strong technical team is also in place, including architects. However, local consultants are contracted in each market to provide developers with a clear picture of the situation on the ground.
“Our objective is to diversify as much as we can while staying with our original base and business model,” he said.