Meliá Hotels International was founded in Mallorca in 1956 and today has more than 370 hotels in 43 countries. We spoke to CEO Gabriel Escarrer about Spain.
Talking to Gabriel Escarrer
Meliá invested more than 200 million euros in Magaluf’s seven-year transformation. What about other parts of Spain?
Magaluf had an undeserved situation of unprecedented degradation and, with 11 hotels and more than 3,800 rooms in the area, we had the critical mass and capability to influence its transformation.
Our project extended beyond the hotel portfolio, producing a quality modern destination, with the ‘cherry on top’ being the new Meliá The Plaza hotel and next-generation shopping and dining destination, Momentum Plaza. Magaluf is now a more profitable destination, with a customer segmentation of greater purchasing power: families and adult couples make up 70 per cent.
We have also renewed all our properties in Torremolinos, and parts of the Canary Islands and Ibiza. In Menorca, we are still fighting the council to make a 45 million investment in the entire renovation of the island’s largest hotel, in Son Bou.
Since 2012 Meliá has invested nearly 600 million euros in our Spanish urban and holiday hotels, in line with our strategic focus on positioning ourselves increasingly in the upper and deluxe segments.
How was 2018 for Melia?
Certainly atypical in climate and other specific factors, such as the World Cup – which discourages certain sectors from travelling. But the main impact has undoubtedly been the ‘recovery’ of destinations that went into decline following the Arab Spring and rise in terrorism. Turkey, Egypt, and Tunisia are now attracting tour operators with very aggressive offers and government support.
This recovery was desirable and expected and some Spanish companies and destinations should have been better prepared. At Meliá Hotels International, we have been repositioning our product towards less-price-sensitive independent travellers who appreciate our brands’ added value.
In your opinion, what should Spain do to maintain its appeal?
Spain is the second most important international destination and a leading country in tourism competitiveness, according to the World Economic Forum. Our country has the necessary attributes to maintain this, despite the re-emergence of North African and the Eastern Mediterranean destinations. Spain does need to define its tourism model and create a strategy and mechanisms for it.
Spain should concentrate on the following: increase in the quality and category of the offer (so as not to compete for price with emerging destinations); irruption of digital technology; new players – such as those in the so-called collaborative economy, and changing demands and expectations of increasingly diverse visitors.
How has the Palau de Congresos de Palma de Mallorca fared?
With revenues of 9.4 million euros and almost 200 events, our first-year expectations were exceeded by more than 18% but, above all, I’d like to emphasize that the wealth generated by the Palau is redistributed – so what we call ‘the social cash flow’ goes to different interest groups: suppliers, employees, public administrations, and the management company. We have events taking up practically all the rooms in Palma de Mallorca in ‘low or very-low season’ months and have turned Mallorca into a reference for congress tourism.
Future innovations for Meliá hotel guests?
In terms of digitalization, we are very clear that all innovations must provide guest value, without affecting the personalization of our relationship and service.
The new melia.com and Meliá App make purchase an easier and friendlier experience from any device. Already available in some hotels are a wide variety of enhancement devices – such as wristbands chip-connected to the Meliá App, removing the need to carry cards, keys, or money.
Meliá has been named “third most sustainable hotel company in the world”. What does that mean for guests?
This recognition is the result of our company’s great effort in all areas valued in the Dow Jones Sustainability Index, which include the environment, citizenship, transparency, corporate governance etc.
Customers are increasingly aware of the environment when choosing their hotel, and like, for example, that our value proposition includes hotels with ‘zero plastics’.
What do you think are the biggest hotel industry challenges in 2019?
We have so many! In the first place, improving mature destinations and repositioning in order to compete. Secondly, digitisation, because of risks such as cybersecurity – but the biggest risk to our industry would be not to transform.
Third, unregulated or uncontrolled supply of holiday-rental platforms, which harm destinations and their image, and generate numerous social dysfunctions in terms of housing, urban saturation, gentrification, etc.
Brexit is another risk for tourism in Spain and throughout Europe. It’s a nightmare from which I’d like to wake up to find a miracle had happened, because I think we shall all lose if it materialises. The British market is one that we want, and that loves us very much.
The biggest challenge – one we must deal with most urgently – is climate change, which is finally on all political and social agendas. It’s one to which I and our company are seriously committed and, almost 10 years ago, we adopted voluntary commitments against climate change. Thanks to a solid environmental strategy, Meliá is one of the world’s top-level companies in the prestigious Carbon Disclosure Project index.
What are you most proud of at Meliá Hotels International?
I am tremendously proud of our team and the way we have directed the group’s profound cultural transformation in recent years (towards a more global more ‘asset-light’, diverse, and responsible company).
With more than 60 years in the tourism business, it is not only an honour, but also a great incentive to continue surpassing ourselves every day.
Photos courtesy of Meliá Hotels International