|
Insight Comment |
Spanish hospitality giant Riu Hotels & Resorts has opened its fourth city property in North America with at least two more scheduled to welcome guests over the next several years as the company continues its expansion beyond its original all-inclusive resort business model.
Debuting earlier this month, the four-star Hotel Riu Plaza Manhattan Times Square in a new building of 47 stories boasts 656 rooms and is the company’s second Big Apple property following its Hotel Riu Plaza New York Times Square that opened in 2016.
“We have a strong commitment to the United States as our guests are familiar with our brand in Mexico and the Caribbean so there is that connection which helps us in attracting leisure travellers to our city hotels,” said Riu Vice-President for Sales in the United States and Canada Oliver Samorey.
Founded in Mallorca in 1953, the chain now has 100 hotels in 20 countries specializing primarily in all-inclusive holiday resort properties. It is owned and managed by the third generation of the Riu family.
“We have already begun construction of our next North American hotel in Toronto which should open in 2023 and the Hotel Riu Plaza Chicago in 2024 where we’ve purchased a plot of land in Streeterville, the city’s commercial and cultural centre, with construction set to begin this spring,” the executive said.
The 350-room hotel will be housed in a 28-story building reflecting the styles of the Chicago School architectural movement of the late 19th and early 20th centuries which is credited with creating the world’s first modern skyscraper in 1885, the Home Insurance Building.
Once it opens, the Chicago hotel will bring the number of the chain’s urban properties to an even dozen.
“And we’re always looking at new destinations in the United States like Orlando, Los Angeles and New Orleans. Riu picks sites in cities which have strong tourism numbers as leisure travellers are our main focus, is easily accessible to the local airport and where we can build a hotel of between 350 to 500 rooms,” Samorey explained.
“But right now, there are no firm plans for more North American openings,” said the Miami-based vice president who has worked for Riu in various positions for 18 years.
“In Europe, we’re interested in Paris, Amsterdam and Rome but it is very difficult to find sites for a new build which meet our requirements. We were lucky enough to locate such a site in the British capital and our Riu Plaza London Victoria will open next year.”
Riu Hotels & Resorts favours the owner/operator model although it does have partners in some of its seaside resorts. The chain also prefers new builds to ensure the design takes into account its all-inclusive philosophy.
“All our urban properties include breakfast in the rates which we find our American guests are especially fond of,” Samorey said, “so we make sure that a large buffet breakfast space is included in the planning.”
The chain established its first urban hotel in Panama in 2010, then a year later opened Riu Plaza Guadalajara in that Mexican city. But it was a learning curve for the company switching from decades of operating vacation resorts to running city hotels.
“A major challenge was catering to the MICE sector as our main focus until then had been on beach hotels,” the executive recalled.
“At these new hotels we couldn’t rely only on tourists so we had to plan our hotels to include conference rooms of various sizes for large and small business events as well as for weddings, cocktail parties, etc.”
Riu now also operates city hotels in Miami, Berlin, Dublin, Madrid and San Francisco and faced a different challenge when in 2015 it opened Miami, its first U.S. property.
“In the United States, tour operators using charter flights were not the principle source for channelling guests to our hotels like they are for our resorts in Europe and the Caribbean,” Samorey said. “In the United States, people tend to book on their own.”
“Also, online sales were much stronger here than in what we were used to in Europe.”
During the pandemic, the chain used the down time to expand its outdoor terrace in Madrid, add dozens of rooms in Dublin and install a new restaurant in San Francisco.
According to Spanish press reports, Riu’s urban hotels are rebounding after the crisis and billed 200 million euros last year, an increase of 68 per cent over 2020 but still down by 38 per cent compared to pre-Covid 2019.
“Already this year we’ve seen strong numbers for our U.S. hotels and based on reservations for the second quarter beginning with Easter Week in April, it looks like we could see occupancy rates equal to the same period in 2019,” Samorey predicted.