Apple Leisure Group to push deeper into Europe

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T1216SECRETSLANZAROTE_HR
The Secrets Lanzarote Resort & Spa.

On the heels of its foray into Europe, Apple Leisure Group (ALG) is bullish about further expansion there this year. 

“Our growth in Europe has been incredible in just one year,” said Javier Coll, ALG’s executive vice president and chief strategy officer. “We’re going to be very focused there in the short term. Our goal is to open 30 hotels in Europe within the next two years.”

ALG’s AMResorts arm is already roughly halfway to meeting that target. The company made its big leap into Europe at the start of 2019 with the acquisition of Spain’s Alua Hotels & Resorts. The Alua portfolio, which plays in the midscale space, spans roughly a dozen resorts in the Balearic and Canary islands.

In May, AMResorts opened its first Secrets resort in Europe, the Secrets Mallorca Villamil, while a second location, the Secrets Lanzarote Resort & Spa in the Canary Islands, opened this past December. This year, sister brand Dreams plans to make its European debut with the opening of the Dreams Lanzarote Resort & Spa.

All three Secrets and Dreams outposts are part of a strategic partnership AMResorts has forged with Spanish hospitality group Hesperia Hotels & Resorts.

“We’re going to continue to develop Alua, which is a very well-established, four-star brand,” Coll said. “But when it comes to the five-star level in Europe, we’re going to focus on growing Secrets and Dreams. We’re also going to be more flexible in terms of the product. Depending on where the hotel is, we may have a mixed product that’s not just full all-inclusive.”

Select Alua properties offer bed-and-breakfast, half-board and all-inclusive options. Likewise, the Secrets Mallorca Villamil offers bed-and-breakfast and half-board packages as well as AMResorts’ Unlimited Experience all-inclusive offering. 

Coll said ALG is eyeing opportunities in Portugal, Turkey and Greece. Longer term, he said, the company is plotting inroads into the Asia-Pacific region. 

“We’re not going to be going into places where there are no flights or markets of size,” Coll said. “We’re not looking to be explorers. We’re going to follow the strategy we had in the Americas, which is to follow the market.”

AMResorts’ European expansion comes as the company finds itself facing challenges in its core Caribbean and Mexico markets.

AMResorts has 10 resorts in the Dominican Republic, where visitor numbers had taken a hit after a spate of tourist deaths last summer drew international media attention. The deaths turned out to be the result of natural causes.

Coll said the destination “is seeing a recovery,” with AMResorts experiencing what he called a “stabilization” in bookings. 

In Mexico, where AMResorts has more than 30 properties, the group is up against sluggish revenue growth, caused in part by an ongoing supply/demand imbalance, among other issues. In December, ALG executive chairman Alex Zozaya announced at a press conference that four to five AMResorts developments in Mexico were being put on hold.

“We don’t own those hotels, so when those properties don’t open or get delayed, it’s not down to us,” Coll said. “Some owners may have delayed projects because they’re not sure of the direction Mexico’s new government is going to take. … But Mexico is still the backyard destination for many Americans. In the long term, I don’t think there’s need for concern.”

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