Pestana Hotels Continues Expansion

REPORT FROM PORTUGAL—It’s time to hit the ground running after some challenging years for the global economy, according to a development executive at Pestana Hotels & Resorts, a Lisbon-based hotel owner and manager.

José Roquette Member of the Board, in charge of Development

The company’s pipeline puts it in a prime position in some hot hotel markets. Pestana was able to accomplish this because it had the investment capacity at the right time and made fast decisions in markets “where pessimistic visions were ruling,” said José Roquette, member of the board, in charge of development, Pestana.

Pestana’s portfolio has 87 hotels with more than 9,000 beds in nine countries: Portugal, England, Brazil, Argentina, Venezuela, Mozambique, South Africa, Cape Verde and São Tomé e Príncipe.

“All crisis brings opportunities for those who managed to stay fit and have not over invested, over leveraged or grown too fast,” he said.

In March, the 4-star and 5-star brand opened its first hotel in London—the 216-room Pestana Chelsea Bridge Hotel and Spa.

High priorities for growth at Pestana are Europe and South America, according to Roquette: “In Europe, we will focus on opportunities primarily in Madrid, Barcelona and Brussels, but also in Paris and Amsterdam. In South America, Chile will be the next step. After that, we shall look at Bogotá and Lima (Peru).”

Most development has been accomplished by using operational cash-flow (earnings before interest, taxes, depreciation and amortization of approximately €100 million, or US$135.8 million) and combining it with long-term debt, Roquette said.

“In specific market situations, we have co-invested with some local partners, and we have also had some positive experiences with some real-estate funds,” Roquette said. “Besides from cash-flow generated by operations and having a solid asset portfolio, we hold the capacity not only to get stable debt structures but also to do sale and lease backs, should there be a specific deal that requires a larger amount of capital.”

Pestana’s sole shareholder is Dionisio Pestana, who also is chairman and CEO of Pestana Group.