This week we talk to PHG Hotels & Resorts, a hotel assets advisory firm co-founded by a Chicago Booth grad and responsible for launching Hilton Worldwide in the Moroccan city of Tangier!
PHG Hotels & Resorts was founded in 2009 by Ivar Yuste and Javier Torres. Ivar is a graduate of the Chicago Booth EMBA which, he says, "opened many doors" for him. He has held several business development roles in the travel and hospitality space: immediately before founding PHG he was Managing Director of Corporate Development at BlueBay Hotels & Resorts, part of Marsans Group, the largest tourist conglomerate in Spain.
Javier was the Hotel Investment Officer for Spanish real estate group Metrovacesa for the past 13 years, participating in the acquisition and management of more than 40 hotel properties in Spain and France. and responsible for the roll out and management of the first Holiday Inn franchises in Spain.
Ivar shares his insight on Africa’s best investment opportunities, the Arab Spring and why Brazil and Columbia are their next markets for growth.
Tell us a little bit about PHG Hotels & Resorts and how it was founded
Our company was established in Spain in 2009 by my self and Javier Torres. Javier has spent his entire career in the hotel sector. Prior to founding PHG he spent 13 years responsible for the design, development and management of the entire hotel portfolio of Spanish listed real estate group Metrovacesa.
I have held various business development roles in the travel and hospitality space. Prior to founding PHG, I was Managing Director of Corporate Development for BlueBay Hotels & Resorts, the hotel division of the Marsans Group. I joined BlueBay from the US-listed company Wyndham Worldwide, the largest hotel franchise group in the world.
Our skill set combines an understanding of the capital markets and of the hotel and real estate industries. Our portfolio of services goes beyond consulting or advisory, and ranges from asset feasibility analysis, to solving investment and financial needs, through to managing those assets as hotel operators. Our clients include listed companies, REITs, investment funds, multi-national companies, banks, family offices, real estate groups.
We started in the Spanish market and have grown into Europe, North Africa, the US and Latin America. We typically follow our European and American clients wherever they go.
Which countries in Africa currently offer the best investment opportunity within the hotels sector?
Before the Arab spring I would say Morocco, Algeria, Cape Verde, Tunisia and Egypt in the leisure hotel segment. In the business hotel segment Morocco continues to be strong, although only local or Middle East investment is still active.
The focus is now on the resource-rich countries of Sub-Saharian Africa: Nigeria, Ghana, Gabon and Ivory Coast in West Africa, and South Africa. There's some activity in Rwanda and Kenya. To be more precise, 54 per cent of the investment pipeline is going towards Sub-Saharian Africa versus North Africa.
Have any of your projects been affected by the Arab Spring?
Yes, prior to the Arab spring our firm was about to be awarded a project on the Atlantic Coast of Morocco, part of the Plan Azur, a government initiative to develop the tourist infrastructure of the country. This was a leisure development where investment was required for a luxury hotel project. The project is so far on stand-by.
What makes your firm unique?
The main differentiating factor is personalised service. Since we are a small firm, we are able to offer a totally customised service to our clients. The two partners of the firm lead the projects and follow up in person thorugh all the different phases of our operations and transactions.
In the previous phase of the economic cycle, when money was flowing for projects, the big consulting firms where throwing junior consultants in all directions to capture projects and run feasibility studies. This is no longer possible. These days nobody commissions a feasibility study if there is no prior commitment for investment.
What are the benefits of working for your firm?
Working with our firm means becoming an entrepreneur. Long gone are the days were you could sit at your desk waiting for projects to land at your table. We do not hire employees, we hire collaborators or partners. Our approach is totally results-driven and as a result totally reward driven.
You recently attended the Invest in Africa event. How has PHG Hotels & Resorts has invested in that region thus far?
This year we closed the search and selection process for the largest city hotel project in Africa, in Morrocco. We advised private equity group Inveravante in the selection of Hilton Worldwide as the operator for the project. The Tanger City Center project is worth over 190 million Euros and involves the construction of 800 apartments, two hotels, a large office block covering 10,161 m2 and a shopping and leisure centre covering 32,000 m2.
Located within Morocco's modern business district in the heart of Tangier, the two properties, Hilton Tanger City Center Hotel & Residences and Hilton Garden Inn Tanger City Center, represent the first Hilton Worldwide hotels in Tangier, one of the country's fastest growing commercial cities.
How has your education at Chicago Booth helped your career?
I graduated from the Chicago Booth School of Business with an EMBA in 2000. At that time, having an MBA was already becoming a must amongst executives in large corporations. I was working in London at the time and decided it was the right time to do it. The first thing I did when I completed the course was change to a more challenging position in a different company, so the immediate rewards were clear.
Later on in my career I've seen even more benefits of the programme. Chicago is a highly respected institution in the financial markets and opens many doors. I would say the strongest aspect of my Chicago Booth EMBA was being able to network with an amazing group of people.
What qualities are needed for a candidate to work for PHG Hotels & Resorts?
At PHG we look for results-driven individuals or partners who are able to hit the ground running and add value to the company right away. The business environment in Europe at the moment is very aggressive: growing our team only makes sense if we can grow our results exponentially.
What’s next for PHG Hotels & Resorts?
We are growing organically in regions that are natural expansion areas for our activity. We are targeting Sub-Saharan Africa, leveraging the Tangier project and other hotel projects we have within the region.
We are also growing in Latin America, where some of our clients are developing projects. Brazil and Colombia are the two specific markets where we are active and we hope to close our next opportunities.
The mix of our clients is growing amongst financial institutions - we now work with more banks and savings banks. Credit is scarce in Europe and we are focusing on the only asset holders that can provide credit - the banks.