With the Mercure Benidorm scheduled to open in June, the hotel will be the first non-Spanish branded hotel in the coastal market.
As a conversion of the independent Benilux Park hotel, the 186-room hotel will also be the first Mercure in the autonomous community of Comunitat Valenciana, with rebranding discussions beginning before the onset of the COVID-19 pandemic.
The Mercure brand is part of Accor, a global hotel brand based in France. A few Spanish hotel brand companies have hotels in Benidorm, including Meliá International and H10 Hotels.
With a population of 70,000, Benidorm gained popularity after the opening of an international airport in nearby Alicante in 1967, after which hotels began to appear along the Costa Blanca coastline.
About 90 minutes south of Valencia, Benidorm has long been a favored destination for northern Europeans – especially Britons – for package holidays, which typically combine airfare and hotel stays.
According to the Spanish data and statistics company Statista, in 2019 Benidorm recorded 11.3 million overnight stays, and British travelers accounted for 76.3% of these stays.
Now Britons and travelers from other countries are returning to Benidorm following the relaxation of COVID-19 rules in the UK and across Europe. The Association of Hotels in the Benidorm, Costa Blanca and Valencia region – referred to by its Spanish initials HOSBEC – reports that hotel occupancy for the last two weeks of February was 65.8%, compared to 54.2% for the same period in January and up 42.9% for the same period in December 2021. Just over 50% of these occupancy figures were international visitors.
However, international tourists may not buy as many all-inclusive Spanish vacation packages. Instead, visitors to Spain are looking to stay in branded hotels, something Spanish hoteliers have observed in other mainstream destinations across Spain.
Cristina Ramos-Fernandez, director of franchise hotel operations in Southern Europe for Accor, said destinations such as Benidorm and Torremolinos – which is further south on Spain’s Costa del Sol – are now attracting guests who book their hotels and flights separately and don’t want to book vacation and all-inclusive packages.
“Overall, in the hotel market in southern Europe, there is a tendency to change the market offer of mass tourist destinations to attract more individual customers and break with the exclusive distribution of tour operators,” he said. she declared. “The seasonality of certain destinations and the repositioning of hotel assets support the development of projects in certain localities such as Benidorm. This trend has caught the attention of international channels.”
Ramos-Fernandez said hotel brands are looking for opportunities in other mainstream destinations in Spain. She added that markets such as Benidorm and Magaluf – a Mallorca hotspot known for attracting party-loving young adult travelers – are reinventing themselves with more mature hotel offerings.
“Several owners of hotel assets have invested in modernization and renovation to reposition their hotels as good quality 4 and 5 star hotels, differentiating themselves from the existing market offer and satisfying international ‘premium’ customers”, said Ramos-Fernandez. “In this scenario, international brands such as Mercure, considered attractive for international premium customers, have taken advantage of this advantage to adapt to given brand standards.”
Ivar Yuste, partner at PHG Hotels & Resorts, which is the asset manager and owner representative of Mercure Benidorm, said the maturity now seen in the Spanish market opens up more opportunities for new hotel brands.
“These sites are controlled by local owners, [with hotels] that work quite well as independents or as national regional brands. In those markets, there’s usually no international brand penetration because brands don’t have relationships with owners,” he said.
Yuste said the biggest opportunity for value creation in hotels in Spain comes from repositioning, acquiring an existing, obsolete property and transforming it into bringing an international brand.
“Classic mass market resort destinations such as Magaluf, Benidorm, Torremolinos, Lloret de Mar and Salou are on my list of resort destinations with the highest turnover potential,” he said.
Yuste said these “classic” stations are very counter-cyclical because they attract the largest market share among the European and Spanish middle classes.
“They’re not hot or dynamic, but they’re resilient,” he said. “For example, during the previous financial crises of 2009, Benidorm [revenue per available room] recovered much faster than that of Malaga.”
It’s an opportunity for local hotel operators, third-party management companies and operations consultants, including Madrid-based PHG Hotels & Resorts, Yuste said.
“Getting to know these owners and introducing them to the value creation story of introducing a global franchise and transforming their business model is easier,” he said.
Yuste said there was huge interest from international brands, and when he led the Benidorm hotel selection process, almost every international hotel brand “wanted to be there”.
Ramos-Fernandez said younger generations of hotel owners in Spain are more inclined to place a hotel brand flag above the door.
“The Mercure Benidorm operation was born from the search by two generations of owners for potential solutions to consider whether and how to continue the operation of the existing hotel. Their readiness to invest in modernization and renovation to reposition the hotel has facilitated the development of the project in line with an international brand,” she said.
From those discussions, a new management team emerged with the aim of putting the hotel “the top Benidorm offering”, she said, adding that she was also targeting local guests and diners and a business customers.
Ramos-Fernandez said the Mercure Benidorm will benefit from a new design, the creation of five rooftop penthouses, a duplex bedroom and landscaping with a garden of vegetables and aromatic plants.
The hotel restaurant will also enhance the food and drink offering in Benidorm, which has always been “pretty average”, Ramos-Fernandez said.
“The restaurant will operate independently from the hotel, so we will also be able to appeal to the local market and generate business synergies,” she said.
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