Gabriel Escarrer Jaume is CEO of Spanish hospitality company Meliá Hotels International. He shares how the company's roots in leisure hospitality have helped focus its recovery strategy, ahead of his participation to the International Hospitality Investment Forum (IHIF).
Hospitality Insights: What makes hospitality a strong sector despite the very difficult time the market is going through?
Gabriel Escarrer Jaume : Despite the impact of Covid crisis in the hospitality industry, or I would say, “thanks to it”, the industry has demonstrated its solid fundamentals, and the resilience of tourism demand. The travellers’ reaction to the vaccination progress and to the lift of travel restrictions in the main source markets has been strong and immediate, as shown by the evolution, almost back to normal levels, of airline passenger numbers in the US, whilst European traffic rose by one-third in the past month, as recovery continues.
That´s why quality assets in key leisure or bleisure destinations, especially when combined by a hotel management company of international prestige, are really attractive and highly sought after by investors.
Hospitality Insights: What is Meliá Hotels International’s main area of focus to drive recovery in 2021 and beyond?
Escarrer: Meliá Hotels International is a leading group in leisure hospitality, with 60% of our room portfolio in the resort segment. Therefore, we are taking advantage of the fast recovery that leisure hotels are experiencing, after so many months of confinement and such a large contained demand, and we have evolved our value proposal to prioritize health safety, whilst ensuring a whole and seamless holiday experience. For 2021, thus, our main focus is on the leisure hotels, with commercial efforts concentrated on domestic travellers (given the global trend to prioritize domestic travel) and on those feeder markets with higher vaccination rates.
Although Corporate and MICE travel are beginning to resume activity, recovery will be slower.
Hospitality Insights: The pandemic has had a strong impact on the relations between operators, owners, lenders and all stakeholders in hospitality. What do you expect to be the lasting effect of this change?
Escarrer: As we said in our last shareholders meeting, this crisis has made us strengthen the commitment and cooperation that as a family business we have maintained at all times with all of our stakeholders. Therefore, we sought collaborative solutions with our hotel owners and other partners to help re-balance our operating agreements within a no-income scenario, and we stayed closer than ever to our customers, to maintain and even increase their engagement and loyalty. I believe that we have learnt a lot from this dramatic crisis, which has helped us to build stronger and long-lasting relationships, based on trust and collaboration.
Hospitality Insights: The leisure segment is hailed to be driving hospitality recovery. What are the keys to succeed in this market?
Escarrer: At Meliá Hotels International we use to say that we have “leisure at heart, and business in mind”. As the only one among the top 20 international hotel groups with an origin -65 years ago- in the leisure segment, we know how important is to address families, to mix entertainment with lifestyle, to provide life-enriching experiences, and of course, to connect our customers to the local environment, with the local communities and their culture, etc.
It is also key to understand how to deal with customers that stay with us for one or two weeks, and for whom their stay represents the aspiration for a well-deserved rest after a whole year of work, especially this year, after so many months of confinement and struggle against the pandemic.
Hospitality Insights: How have you responded to the new ESG requirements from customers and partners?
Escarrer: The pandemic has accelerated the social and environmental awareness of citizens, and companies will have to live up to their demands, betting on sustainable tourism, communicating it better and making our customers participate in good practices, and betting on coherence and rigor, avoiding greenwashing, a risk and a trend that reduces our credibility.
Now more than ever, in addition to producing a positive impact on the environment, tourism companies must be an engine for social development, equity and inclusion. The great challenge today is to integrate sustainability throughout the value chain, helping to fight against climate change, and taking advantage of our potential to create and redistribute wealth and generate employment and social cohesion in the communities in which we operate. Meliá Hotels International’s strategy for the post-pandemic focuses on strengthening our resilience, efficiency, growth and profitability, whist keeping our leadership in sustainability within our industry.
Hospitality Insights: What are your looking forward to with regards to your participation to IHIF?
Escarrer: Above all, we are looking forward to sharing our views with the industry leaders about the evolution of the market after the pandemic and the new trends that could arise. Moreover, we would like to share our General Strategy and, specifically, our Development Strategy which emerges stronger after such difficult times.
Meliá Hotels International is a Patron Sponsor of the International Hospitality Investment Forum (IHIF) taking place in Berlin, Germany, on 1-3 September.