Luis Riu: “2021, the year in which we started to turn a profit again, is coming to a close and 2022 is full to the brim of exciting projects”date_range 21 January, 2022 question_answer 3 Comments
When I wrote in February 2021 the post on the RIU Hotels evaluation of 2020 and told you about the plans we had for this year that we have just closed, I never thought that in the article of a year later I would still have to talk so much about the pandemic. There’s no denying that the situation is much better than in 2020, but we can’t avoid the fact that the COVID-19 crisis is far from over. Nonetheless, you know what we are like, we are a company of action led by highly driven people.
2021, a good year for RIU Hotels despite the difficulties
With this positive outlook, we can talk about many important projects that were completed in 2021 and our eagerness to take on the great challenges awaiting in 2022. Last year was full of ups and downs, but we also managed to get back to a positive operating result after a 2020 that’s best forgotten.
RIU ends 2021 regaining activity in all countries
To kick off our review of 2021, I’d like to mention the reopening of our hotel RIU Sri Lanka last December. As an exotic long-haul destination that doesn’t have sufficient local demand, this country was strongly hit by the crisis. With this reopening, we were finally back up and running in every country where we have hotels after being forced to close all our establishments in March 2020.
This was easier said than done. It took us one year and nine months to get there. What’s more, we are still learning from the pandemic. Just when we thought that closures were a thing of the past, as a result of the most recent wave and the subsequent restrictions, we had to close our hotels in Morocco once again. Nonetheless, we are ready to restart operations as soon as allowed.
Opening of the chain’s largest Riu Palace hotel in Cape Verde
During the hardest months of the crisis, we continued with construction work at the Riu Palace Santa Maria, the largest Riu Palace hotel in our portfolio, providing employment to 1,000 people for a period of 18 months. The hotel opened its doors in March, defying bad business forecasts. We have managed to continue operations thanks to the magnificent team in charge of the hotel and the customers who continued to travel from countries like Poland or Luxembourg in those first few months.
All of our six hotels in Cape Verde are open. This destination suffered a great deal during the crisis. One of the key aspects of our service is safety in the event of COVID-19 and any other incident, and this must be offered both inside and outside the hotel. Therefore, improved health infrastructures were needed to regain operators’ trust and recover the number of passengers. We mustn’t forget that this requirement is here to stay, not just in Cape Verde but in all other destinations throughout the world.
RIU relaunches newly refurbished hotels in the Canary Islands and the Caribbean
Riu Palace Maspalomas
The Riu Palace Maspalomas was fully refurbished this summer. We presented the renovation in the first week of July and it was a very proud moment for us as this hotel deserves the best, and I think that we gave it just that with this project. When it opened in 1989 it was the first Riu Palace hotel and represented a big step for the company. At that time, we had to overcome our partner TUI’s lack of trust.
We had ample experience in 3-star hotels in Majorca. We had opened the Riu Palmeras, and that was already a big leap in terms of quality with its 4-star service, but TUI didn’t think that we were sufficiently specialised to welcome Palace customers. That just gave us even more reason to show everyone, ourselves included, that we could do anything. We put the best people from each of the chain’s departments at the helm to get this architectural jewel off the ground, and it has been a real benchmark in terms of elegance and good service in the south of Gran Canaria since it opened.
Riu Paraiso Lanzarote
The Riu Paraiso Lanzarote was our other big refurbishment project in 2021. We presented it in December and I think it turned out really well. I’m very pleased with the results because it wasn’t an easy project. We had to join two hotels and needed a project that unified the style, improved the fluidity of services and took full advantage of the synergies created by shared dining and leisure spaces. We managed to reach these goals and the hotel’s customers, who are particularly loyal to this establishment, have given us great feedback.
This project has an interesting story behind it. In my last visit before the project started, I thought that the best course of action would be to demolish the hotel and build a new one, just like we did with the Riu Playa Park. We started to study the viability of the project but it would have taken too long, so, when the pandemic struck, we looked at selling the hotel. However, taking into account the considerations of our teams and the local authorities, soon after we decided to take on this great refurbishment to boost the hotel’s quality.
Riu Palace Antillas
In 2021 we also refurbished all the rooms and bathrooms at the Riu Palace Antillas. This hotel in Aruba has an ideal location on Palm Beach, right next to the Riu Palace Aruba. We bought it in 2014 and carried out work to renovate the communal areas and swimming pools and join it to its sister hotel. At the time, we decided that the rooms were in a good state and that we didn’t need to invest in the entire building. However, as the years went on this refurbishment became necessary.
It was a long and complex project as the building has 16 floors and work was carried out in stages, so I’d like to congratulate the project and operations team. I think the result is fantastic and our guests are going to love it.
RIU’s second hotel in New York, a pending project for 2022
Lastly, I would have liked to close 2021 by presenting our second hotel in New York, but in the end it wasn’t possible. The construction work is complete and the opening is imminent, but we know from experience that the process of obtaining permits is very complicated and this is currently ongoing. This is a new milestone for the company. Buying a plot of land just a stone’s throw from Times Square and building a new skyscraper, all directly financed by the company, should make us feel proud of what the Spanish hotel sector is doing around the world.
With the first hotel, we had to learn many lessons before we started, during construction work and also when the hotel was up and running. In fact, I thought that this investment of time and money would pay off in this second project, but reality was one step ahead of us once again. This hotel has cost a lot of in terms of both angst and money, and not even just a bit more than the first one because, even though we were able to benefit from our previous experience, COVID-19 and material shortage came along to complicate things again. But if you asked me if I’d make another hotel in New York, I’d say “yes” without a moment’s hesitation.
A year of contrasts: record numbers in the Canary Islands and closures in Asia and Africa
Last year was full of ups and downs and there were many contrasts between our various destinations:
- In Americawe have recovered activity since the beginning of the year and most destinations have worked very well. In Mexico, Jamaica, the Dominican Republic and Costa Rica, we have counted not only on North American customers but also local guests. They have saved us from closing and going into the red many times throughout this crisis.
- The situation was worse in Europe.
- Nonetheless, Asiaand Africa undoubtedly suffered the brunt of the crisis.
In Spain, our international markets have performed unequally. Germany has sent a stable flow of travellers since the summer, but openings and closures in the United Kingdom have been very detrimental to us. Our most loyal and stable customers were from the national market and they have been key in Andalusia and the Canary Islands.
We have already mentioned that Cape Verde, Morocco and Sri Lanka suffered a great deal and their hotels were closed for many months. The same is true in Mauritius, although the Maldives and Zanzibar were exceptions to the rule with good occupation figures.
Some extraordinary things happened during these months, such as hitting record revenue in some destinations, as was the case of the Canary Islands in November, at the same time as low occupation rates or closures in others.
Growth in RIU hotel bookings through direct channels and OTAs
Another trend that started in 2020 and carried on in 2021 was the increase in the percentage of bookings made through our direct channels and OTAs, which was 15% up on 2019 at the end of last year. This increase includes customers from other channels who will return to their travel agent of choice when operators get back to normal, as well as new, mostly local customers that book on short notice, who we think will stay with us.
One hundred hotels in 20 countries and more than 28,000 employees: RIU’s 2021 results
In summary, 2021 was a highly complex year that marked the start of our recovery, but we have yet to consolidate this progress. By all means, we started to make a profit again following losses in 2020, and we recovered a large part of the jobs we lost during the pandemic.
At the end of 2021, we had 100 hotels open in 20 countries, 49,832 rooms and a workforce of 28,004. Over the course of these months, we welcomed a total of 4.2 million customers and gross sales rose to 1.375 billion euros, a 66% increase compared to 2020.
RIU approaches 2022 with hopes of recovery
And this year looks promising. It’s not going to be plain sailing, but I think we have all accepted that we are going to have to live with this virus and we want to start travelling and going on holiday again, or maybe even do so more often. I hope that in 2022 we can consolidate the recovery we worked so hard to achieve over the past year.
We will also have to live with uncertainty, but if one thing’s for sure, we won’t have time to get bored at RIU. On top of corporate projects that include strengthening the direct channel and improving management in several areas, we have several refurbishment and new-build projects (my personal favourite) on our hands. I don’t want to give away too many details, so I’ll just briefly mention them.
Renovation projects planned by RIU Hotels for 2022
As for refurbishments in 2022, we’ll renovate these hotels:
- Riu Palace Madeira in Portugal
- Riu Karamboa in Boa Vista, Cape Verde
- Riu Santa Fe in Los Cabos, Mexico
These are three big challenges, and we’re looking forward to adding the Riu Oliva Beach in Fuerteventura to that list soon.
In Mauritius, we have some very ambitious plans for the Riu Le Morne and Riu Creole. We will keep the zones we built a few years ago unchanged, but the current buildings will be demolished to make way for a new modern and attractive complex.
RIU Hotels’ new hotels construction projects in 2022
As for new builds, our star project this year is the Riu Baobab, which will be RIU’s first hotel in Senegal. The inauguration is planned for April and will be very special as the Riu Baobab is a pioneering all-inclusive beach hotel in the area. We also think it will be very popular with local customers as it will have event facilities. The Splash water park will be another pull for the local market, while European customers will also really enjoy this new destination. The local government is making an outstanding effort to encourage tourism. It knows that the area is blessed with an amazing natural environment and that the locals have a special charm. They have given us their full support to ensure this project gets off the ground within the deadlines.
This year we will also open:
- Two more hotels in Mexico: the Riu Latino in Costa Mujeres and the Riu Palace Kukulcan in Cancun.
- In Zanzibarwe will inaugurate the Riu Jambo.
- While in Jamaica, after celebrating the 20th anniversary of RIU’s landing, we’re planning a new hotel in a new destination that we’ll reveal soon.
We have three big projects under way in cities. On top of the hotels in Toronto and London that are already at an advanced stage of construction, we have a new plot of land in Chicago where we will lay the cornerstone in spring, although we won’t be able to open the doors of any of these new Riu Plaza hotels until 2023.
Despite all of these changes, one thing remains unshakable: I will continue working restlessly alongside my sister Carmen to ensure this company remains strong and keeps on growing to provide stable, quality employment and opportunities to our teams. As always, I would like to thank all of you who keep this machine running at full power.
Fdo. Luis Riu