Hoteles Catalonia: a Catalan sun for international radiance?

Hoteles Catalonia, created by the Vallet brothers and now directed by Felix Navas, was not expected to become an important actor on Spain’s accommodations market. The group began by investing in the real estate sector and then in the 1980s made a shift towards the hotel industry. It needed a base, and Catalonia became the chain’s anchor point. Barcelona thus established itself as its preferred destination, and today International addresses have joined the Catalan properties as proof of the chain’s development with an affirmed identity.

Key Data:

• Hotels: 63
• Rooms: 9,573
• Brands: Catalonia Hotels, Vueling by HC
• Creation date: early 1980s
• First hotel: 1983
• CEO: Felix Navas

An expanding and diversifying portfolio

With Hoteles Catalonia, Barcelona has an ambassador with local roots. After a career in real estate investment, the Vallet family decided to enter the hotel industry, making the Catalan capital the starting point and basis for developing its chain Hoteles Catalonia.

The first property operated by the group opened its doors in Barcelona in 1983 under the name Catalonia Atenas Hotel. Its opening was followed by the inauguration of six hotels in the same city in the 1980s. Today, the chain continues to grow in the Catalan city, where its hotel supply counts 29 properties (counting Barcelona city and its suburbs) and some 3,000 rooms. Generally speaking, the group has close connections to Catalonia as one third of its global portfolio is established in the region. And local growth is not coming to a halt any time soon: the chain's most recent hotel opening in the city was celebrated in February 2014 with the Catalonia Square.

The hotel group's development followed a classical scheme, expanding from the city to the region, and then to the country for the first hotels outside Catalonia, in Seville in 1988. Hoteles Catalonia then expanded in many Spanish autonomous communities, opening in the Canaries with three hotels, in the Baleares (five properties), in Madrid (six 4-star properties) and Andalusia with four hotels. It now has 54 Spanish addresses, constituting about 70% of its portfolio.

The vast majority of the remaining rooms within its portfolio may be found in the beach and leisure supply of Spanish-speaking countries in Central America, such as Mexico and the Dominican Republic. The chain opened its first hotel abroad in 1998, in the Dominican Republic. The Catalonia Bávaro Beach, Golf & Casino Resort is, moreover, its biggest property with 711 rooms. The chain's expansion continued and the chain now has seven hotels in the Caribbean (four in Mexico and three in the Dominican Republic) for a total of 2,701 rooms. These 4- and 5-star complexes are profitable to Hoteles Catalonia, and in recent years they generated around 40% of all the chain's revenues. Europe is not out of the game, however, and in 2014 Hoteles Catalonia celebrated the opening of a hotel in Berlin, its second property in Europe outside Spain, after a property that was inaugurated in 2001 in Brussels.

The current total supply of accommodations of Hoteles Catalonia is 63 properties, 54 in Spain, a property in Berlin, one in Brussels, as well as seven resorts in Central America & the Caribbean. The vast majority of the chain's hotels are three- and four-star, but it also has three five-star properties (two in the Dominican Republic and one in Mexico). Thanks to this portfolio, the brand is present on several markets, which it defines as urban, vacation and Caribbean. Thanks to recent openings, Catalonia Hotels & Resorts has more than 9,500 rooms.

Varied strategies to expand its footprint

The diversification of the chain's supply is not just at the level of destinations, but also through partnerships that give rise to new hotels for the group. Recently, a partnership with the airline Vueling made it possible to open the first hotel under the new brand Hotel Vueling, in the city of Barcelona. This first property will be sold jointly by Vueling and Hoteles Catalonia and reservations will be possible directly from the websites of the two companies as well as Vueling points of sale. While they have not announced goals for new hotels, Vueling and Hoteles Catalonia have suggested a desire to expand the new brand to Madrid, Seville and Valencia, where the airline is present. Hoteles Vueling by HC seeks new infrastructures as well as leasing and management contracts.

Other partnerships exist, for example with Marriott International for the Renaissance Barcelona Fira Hotel, formerly Hotel Catalonia Plaza Europa. Hoteles Catalonia continues to own the impressive building, and has delegated sales and management to the American group. The chain is thus opening up to new horizons in terms of operations and management of its hotels. If 90% of hotels are owned by the chain, 10% are operated through leasing or management contracts.

The rehabilitation of signature buildings is another solution encouraged by Hoteles Catalonia to strenghten the group's presence in key cities. This type of strategy was undertaken with the Catalonia Berna, in a building erected in 1864 and classified historic monument, and with the Catalonia Portal de l'Angel, a neoclassical palace built in 1872, also in Barcelona. And the Catalan capital is not the only city to see the chain's hotels open in refreshed buildings. In Madrid, hotel Catalonia Plaza Mayor has a façade dating from the 20th century, and symbolizes this will to associate modernity and local tradition to certain properties in the chain.

Going global without dismissing local roots

Hoteles Catalonia plans to continue to grow in the Spanish kingdom, particularly in Barcelona with the opening of a new urban hotel scheduled for 2015, the Catalonia Magdalenas. Moreover, the chain's development division is looking for ways to establish its presence in major European capitals such as London and Paris, and to position itself on the urban hotel segment in South American destinations, where as of today the group is only present on the leisure and beach segment.

Hoteles Catalonia chose to associate its attachment to its native city by expanding towards the Spanish speaking world and Europe. While future projects may lead it to other European capitals and Latin America, the opening of a new property in Barcelona in 2015 shows that the chain is not forgetting about its roots.