The B&B Hotels chain has begun negotiations with fifteen independent hotels in Spain to join its technological platform and take on the group’s new brand, Inspired by B&B Hotels, according to Jairo González, the firm’s long-standing director who will be the responsible for piloting this initiative at a global level. This is a new line of business that aims to complement the French company’s main line, based on lease contracts (asset light).
B&B wants to take advantage of the high atomization that exists in the hotel park in Spain and in other European countries, especially in the segment of one to three stars, to attract new establishments. Specifically, in the Spanish market two thirds of hotel beds, around two million, belong to independent hotels.
Inspired by B&B seeks to satisfy that need “to have the best hotel operation technology to minimize costs and be profitable”
“In the market the need for concentration in the hotel sector is always in the background and, in reality, there is none, but when you have a hotel business you need infrastructure and technology and being a small hotel it is very difficult to reach the market”, explains the CEO of the new division.
Inspired by B&B seeks to satisfy that need “to have the best hotel operation technology to minimize costs and be profitable and, in addition, provide the capacity to reach the guest and, ultimately, sell more”, he abounds in an interview with elEconomista .it is. “Being independent is very complicated and in a cutting-edge platform like B&B they can sell much more and with low costs,” says Jairo González.
The company estimates that the income of the independent hotels that join will be able to grow between 25% and 30%
The hotels that join Inspired by B&B will take on the brand, will be able to take advantage of the chain’s platform with the same technology, hotel, channel and price management, and will join “a very powerful network in Europe that is growing.” . and in France more than 300. González emphasizes that with the management of income on the platform “it will boost the income per available room.” He estimates that revenues will be able to grow between 25% and 30%.
The Goldman Sachs-owned chain currently accommodates 15 million guests a year in its more than 650 hotels around the world, and loyalty is a hallmark. “Half of them repeat three or four times each year with us,” underlines González. In this way, the B&B platform represents an opportunity for thousands of independent hotels. “The more hotels that join the network, the stronger it will be because guests have more choices,” he says.
The manager sees “enormous potential in Spain” and in other countries such as Germany, France or Italy, where it is “even greater”. Spain accounts for around 14,000 hotels, of which 73% are from one to three stars, according to the latest data collected by BoldData in 2019. In Italy there are about 33,000 establishments, in France almost 19,000 and in Germany more than 17,600.
To join Inspired by B&B, the chain imposes minimum quality requirements that are in line with the services offered by its hotels today.
However, to join Inspired by B&B, the chain imposes minimum quality requirements that are in line with the services offered by its hotels today. “They have to be hotels that share values and serve customers in products and services like B & Bs,” he says. “They can be brand new hotels or hotels that have been running for some time and are about to be renovated, that have a modern product or that are easily convertible to modern,” he adds.
González, however, avoids encrypting the hotel incorporation objectives. He foresees that the process will be slow initially, “but, given the potential, he considers that” the path is exponential “.” We prefer not to give numbers so as not to be slaves to them, “he warns.
In the future, the expectation is that this platform will host even more hotels than there are B&Bs in the world today – more than 650.
For the moment, the initiative has been launched as a pilot test that will start in Spain. “In the fall we will have a more realistic idea of business plans that we can put on the table,” he says. For now, “we are negotiating with 15 hotels” in Spain and the plan is to “start shooting it with five or 10 hotels and fully understand the feedback from our teams before launching it massively.” “We want the first hotels to have a purpose, that certain processes can be demonstrated so that later they can be industrialized,” he explains.
In the future, the expectation is that this platform will host even more hotels than there are B&Bs in the world today – more than 650. “We should get many hotels and easily exceed that figure,” says González. “The growth of this route is not about hotels that have to be built. Going from external management to own leasing has difficulties and this is a much simpler model,” he explains. Plus, “the on-off barriers for hotels are very small,” he adds.
Complementary business
The project is born without an expiration date and “is very complementary”, which is the priority of B&B. Initially, the operational base is located in Madrid, although in the future, when it is scaled to other countries, “it remains to be seen how we organize ourselves, but each one has full operational independence, so there will be global coordination and commercial development local”.
For B&B, this new line of business will generate additional income through initial connection fees and a percentage of the sales of each hotel that joins Inspired, which could be between 8% and 10%, approximately. The contracts will be between five and ten years, although with a model that can be adjusted. “We don’t want to capture anyone,” he says.
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