Spanish luxury resort chain Bahia Principe is expanding beyond its long-time business model as an owner/operator and casting about for partners who want to use its extensive experience to manage their properties, according to Chief Operating Officer Antonio Teijeiro.
“We’ll continue as owners of the 27 hotels we have in the world. Nevertheless, as we move forward we need agility and flexibility to expand,” he told Hospitality Insights in a telephone interview.
“We consider that our strongest asset is the know-how in the management of our own hotels, the know-how we have in all-inclusive vacation hotels and I think we need to capitalize on that,” Teijeiro said.
Bahia Principe, with 20 hotels in the Caribbean and seven in Spain, is part of the family-owned, Mallorca-based Grupo Piñero which also owns destination management and tour operator companies, and supplies electrical vehicles to the hospitality industry.
For over 40 years its all-inclusive properties have been a hallmark for luxury resorts and executives believe that reputation will help attract the attention of owners seeking management services while the company itself wants to sign up to the asset-light movement in the industry.
“This is a trend in the hospitality sector and there are only a few companies with ambitions that are not using the asset-light model,” the executive said.
“With all the economic crises and challenges, buying or building your own hotels is a very strong capital requirement so there is no doubt that for companies wanting to move and expand an asset-light model makes sense.”
Teijeiro stressed that Bahia Principe wants to remain in the resort business with its new partners even if a great opportunity in another sector of the industry presents itself.
“You need to follow opportunities according to your brand,” he explained.
“If tomorrow an owner of a fantastic urban hotel of 30 rooms knows that a big convention centre is opening next door and he’s going to have 100 per cent occupancy every day, that would be a great business opportunity but not necessarily a brand opportunity as it doesn’t go along with who we are.”
The COO also said the company is open to managing hotels under its own brand, a white brand or even the brand of another chain, as well as different types of management contracts.
“I would prefer management contracts but it’s true that the hotel management panorama is evolving very quickly so there’s a lot of owners who are looking for franchises,” he said. “What we want and what the owner wants may be different but we just have to come to an agreement.”
Drawing on his previous experience in other hotel companies, Teijeiro cautioned that successfully dealing with owners could be “a very big cultural change” for a company which has always had the last word in how its own properties were managed.
“During my career as a general manager, and especially as a pre-opening general manager, probably my biggest job in places like China and Dubai was to defend the brand from the excesses of the owners.
“Sometimes the owners have their own wants and expectations. For example, you have a four-star brand but the owner wants to pay for the facilities of a five-star,” he explained. “You need to manage those expectations.”
Despite its many years of experience in the Caribbean and Spain, Teijeiro said the chain would be interested in other regions with destinations that fit the brand and specifically those where all-inclusive resorts could be very successful such as Asia and the Middle East.
Amongst its resorts, the company operates two specialising in family holidays under the Bahia Principe Fantasia label, one in Punta Cana in the Dominican Republic and the other in Tenerife in Spain’s Canary Islands.
Teijeiro said he believed the concept would work in other locales.
“Asia and the Middle East are markets where our products, such as the family-oriented Fantasia model, could have a lot of success as these are societies where this type of themed hotel are very much valued,” he argued.
“Also important is getting out of our comfort zone which is the Caribbean and you do need to diversify. Nevertheless, when looking at brand opportunities if something came up in the Caribbean that was interesting we would no doubt have a look at it,” he said.
Another change for the chain in its new endeavour would be size. Bahia Principe properties range from 149 rooms to 1080 rooms with the average of 515 rooms, and the COO says the company is willing to go small.
“Obviously, if you’re looking for higher luxury, then there is a limited number of rooms but there’s other hotels with greater standardisation which is highly valued by the operator and the guests and in these you would be looking at a higher number of rooms,” he explains.
One of Bahia Principe’s most interesting properties is Cayo Levantado located on a private island in the Dominican Republic. It is under extensive refurbishment which includes reducing the number of rooms from the current 268 and will be aimed at a sophisticated audience when it opens late this year.
According to Teijeiro, the resort will be a showcase for future management projects whether they are two, three or four-start hotels, adding that the company has received expressions of interest in its new management services plan from potential partners.
“Once you announce to the world that you’re open, you start having a lot of contacts and we can’t complain,” he said. “We can see that the market likes Bahia Principe and they like our product. We’re opening up, things will come and I’m very confident.”