HONG KONG—Meliá Hotels International, whose brands are staples in the European and Latin American regions, is on the move in Asia.
The Palma de Mallorca, Spain-based company is hoping to at least double its presence in Asia, where it has a 30-year history of managing hotels.
“The next development plan for the company is quality growth, and Asia is one of the markets we have strong growth opportunities,” said Maria Zarraluqui, global development managing director, during a break at last month’s Hotel Investment Conference Asia Pacific. “Thailand, Vietnam, Cambodia … it’s a natural playground for us.”
Brands in Meliá’s global portfolio include: Tryp (112 hotels, according to its website), Meliá (112), Sol (62), Innside by Meliá (17), Paradisus Resorts (13), Gran Meliá (12) and Me by Meliá (8). Meliá has 32 hotels open or signed up for future incorporation in Asia, according to its website.
The company in late October announced a strategic alliance with TCC Land Group to open 3,000 to 5,000 hotel rooms in Thailand. The two companies already partner on the Meliá Hanoi Hotel in Vietnam. It also announced plans to expand its presence in Indonesia as part of The Maj, a
development by Ancora Group. The Innside by Meliá hotel will be Meliá’s 13th property in the country when it opens in 2017.
Meliá’s portfolio includes more than 340 hotels located in 41 countries. The majority of the properties are in Europe and Latin America, and nearly all of its properties are operated under management agreements.
“In Asia, the market is good for management—it’s a type of contract everyone understands,” Zarraluqui said.
Expanding its footprint in Asia is a calculated process that begins with educating developers about what Meliá has to offer, she said.
“One of the biggest challenges in Asia is making people understand who we are,” Zarraluqui said. “We put a lot of emphasis on relationships. The first step is to know us; next is to experience us.”
The company will focus on deals such as the one with TCC because they are more efficient, she said.
“We prefer to have one partner rather than a thousand partners,” Zarraluqui said. “Even though we are (publicly traded), we are a family-oriented company.”
Less than 2% of Meliá’s worldwide portfolio is driven by franchise, according to the executive.
“We manage, and we have an asset-light strategy,” Zarraluqui said. “But we have flexibility based on opportunities that are presented.”
Focusing on its roots
Flexibility is carried over to the look and feel of each hotel in the portfolio, but guests do know when they are staying in Meliá-operated properties, she said.
“We try to accommodate the cultural needs of the location because of the clients that go to the hotel,” Zarraluqui said. “Design, marketing, communications, amenities, food and beverage … you have to understand who the client is.”
Meliá’s calling card is that clients know what to expect from its brands, according to Zarraluqui.
“Even though we go local, we want to bring our Spanish roots wherever we go,” she said. “We don’t like very much the cut-and-paste hotels. When people go to a certain place they want to experience a location, and our clients like that with a touch of our Spanish roots.”
One Meliá brand that could find its way to Asia is the Paradisus Resorts luxury all-inclusive brand, Zarraluqui said.
“We’re looking to expand that to the Asia market—Thailand, Vietnam, maybe Bali,” she said. “The all-inclusive (in Asia) is a new market. It’s not really even a market yet. We have done a lot of analysis, and there’s a lot for the market to absorb about the model.
“There is a niche of interest; it would be a learning curve,” Zarraluqui added. “The luxury all-inclusive concept that’s popular in the Caribbean is not what they are used to here.”
Other possibilities for expansion in Asia include the Me by Meliá lifestyle brand and the upscale Meliá brand.
Worldwide, the Meliá and Innside brands will lead the company’s expansion, Zarraluqui said.
“Meliá is the most recognized brand,” she said. “It has a large MICE component. Everything is linked to weddings, events, happenings. It has a good mix of business and leisure.”
The Cuba connection
The company also is looking for growth in Cuba, where it already is the biggest branded hotel player, the executive said. Meliá’s leaders are enthusiastic—yet cautious—about the impending arrival of U.S.-based companies to the island nation.
“Cuba doesn’t go as fast as people want it to go,” Zarraluqui said.
Meliá has been in Cuba for 25 years, and its 28 hotels represent 20% of the total supply, she said.
“It will bring more openness to the market and potential clients,” she said. “But you have to understand the market. At the end, the right approach is to have a global strategy with a local application of the strategy. If you try to standardize every space, you will have a big disaster.”
The company has added 17 hotels to its portfolio in 2015 and has 15,150 rooms in the pipeline—the highest number in its history, according to news releases. The business achieved an overall increase in average revenue per available room (11%) and earnings before interest, taxes, depreciation and amortization (28%) during the third quarter of 2015.