The threat of recession will not prevent 2022 ends up being a banner year in terms of hotel transactionsaccording to the CEO of GAT management, Ramon Garayar. Opportunities will continue to be created to increase the portfolios of investment and the attractiveness of Spain remains.
“The hotel operations market has been particularly active for a few years in different circumstances, even if this first half was record. After the ceiling reached in 2018 and the success figures of 2019, the two years of pandemic crisis marked a turning point. moment when Spain and its tourist destinations have become the targets of an interesting trend for investment”, explains Garayar.
“There have been a lot of changes. many movements, there are still some and many funds are still betting on entering Spain“. And he cites as an example the sale of the Sareb asset package or the entry of Stoneweg. “It is true that the news and the forecasts speak of a recession, especially given the inflationary trend that all countries , transmitters and tourist receivers, how this will affect the fixed costs of the operation, they are already doing this throughout this year… but this This will result in greater opportunities in the short to medium term to increase trading volume. We believe that this year the transaction record will be broken“.
From GAT Management, they point out that, in trends, it is necessary to distinguish what is the purchase of hotel assets from the operation of the hotel business.
In hotel investing, “we believe that with rising interest rates and the drumbeat of recession whether there is going to be a near-term slowdown in investment momentum, although structurally the trend is already irreversible, given that the holiday hotel industry has become a class asset of the institutional real estate investment strategy”
And he adds that “the market is likely to polarize, in which prime assets in the right destinations, both urban and vacation, will continue to receive strong demand with significant investor turnover based on their respective investment strategies. . Consolidated tanned destinations or less positioned assets may see their potential investment interest decline sharply and be at least for some time unclear.
As for the hotel industry, “it is clear that after the end of the summer season, major consolidation movements will begin in the Spanish market, both for strategic reasons and for financial and commercial needs”.
“Operators’ accounts have suffered a lot during the Covid, and balance sheets are bearing a lot of debt, in an environment of rising costs, uncertain demand, and particularly notable operational problems on the human resources side. All of this forms a cocktail that favors the trend towards business consolidation and the repositioning of operators”
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He affirms that “GAT is very attentive to all these developments, because it has done its homework over the years and is in a consolidated financial situation which allows it to aspire to become a relevant player in these processes, given its clear vocation for growth and expansion”.
New constitution
Regarding the latest asset incorporated by GAT in Cabo de Gata, he comments that “Hotel Don Ignacio has been open and fully operational since last June. On this occasion and for this asset, we operate as an independent hotel. It is a hotel very special asset to us that we have come to stay for a long period of time which will allow us to reformulate and completely rethink the product, position it as a reference in a destinationCabo de Gata, with a strong personality, aimed at an audience that seeks the goodness of tranquility, of what is authentic and natural, who likes to enjoy the unique natural heritage that this wonderful corner offers.
With this hotel, the company pursues a “zero concept”, approaching the concept of “passive, sustainable hotel, integrated into the environment of the park and with a concept of returning to the origins where the continent coexists in harmony with content based on experiences and a different way of relating to the environment”.
“We continue to work, betting on expansion and sustained growth despite the permanent scenario of complexity and volatility. At the moment we are very attentive, focused, on the summer campaign, which is already showing good figures. , figures and objective data that demonstrate the recovery and that consolidate us in the market”
“We can, in the middle of summer, talk about a 30% increase in turnover compared to the previous year and an average general occupancy rate of our assets of around 70%. We will have to wait for the evolution of the month of August, very marked by reservations last minuteto have an accurate picture of the season”.
International expansion
When it comes to making the leap out of Spain, he comments that “it’s on our radar, on our expansion roadmap…these are projects that require a significant period of maturity, all the more so, given the current economic and geopolitical panorama. We have experience, and ambition too, we will see how the circumstances that do not depend so much on us take hold. archipelagos and southern Portugal mainly“.
Currently, the company manages 16 assets under different formulas, representing more than 7,000 beds450,000 overnight stays and an average of 1,700 direct jobs.
Latest news from GAT Management:
–GAT becomes a co-investor in the Hotel Don Ignacio, in Cabo de Gata
–GAT reopens the Antequera Hills Hotel after an investment of 2 million euros in its renovation