One of the biggest brands in business hotels entered the Mexican market just over six years ago. Today, NH Hotels is looking beyond business travelers by expanding its portfolio of luxury and vacation destinations in Mexico. Peter Krupa reports.
Hotels aren’t supposed to feel like home – hotels are supposed to feel nicer than home, with things like complementary bathrobes and those little bars of soap wrapped in wax paper that magically rejuvenate after you’ve used them once. Beds get made, room service raps lightly on the door, and whether designed for business or pleasure, hotels these days strive to offer the grace notes that make traveling a little luxurious.
What travelers don’t want, however, is a luxurious price. The industry is getting mixed up as guests demand more for less. They want to be met somewhere in the middle – where the spa comes included, but no thank you on that $1,500 bottle of champagne. That’s the niche NH Hotels is seeking to fill with its Mexican brands, both on the business and the pleasure side of things.
With a total of 16 hotels in the country, Spain-based NH Hotels is rather new to the Mexican market, but it is quickly extending its NH brand, as well as opening a new line of luxury resorts, to be known as Edenh. With the value of the euro soaring, NH’s expansion in Mexico is just getting started.
THE NH SUPREMACY
NH Hotels is the third-largest business hotel company in Europe, with 340 hotels in 21 countries in Europe, Africa, and the Americas. A publicly-traded entity, NH’s sales revenue has grown to 1.087 billion euros for the first nine months of 2007 – a 43.8 percent increase. Worldwide, the company has 45 new projects under construction, which will add some 9,000 rooms to the nearly 50,000 the chain is operating at the moment.
NH already had hotels in South America when it decided to enter the Mexican market in 2001. The entry point: Chatwell Group, which at the time had a portfolio of five Hilton-brand hotels and four Krystal hotels. Through a partnership formed with Chatwell, the group was renamed NH Mexico. Then in 2005, NH bought out the remaining shareholders, leaving the group and its hotels 100 percent in the hands of the Spanish company.
Today, the NH Mexico hotels gross (own and operated) about $100 million in sales annually and employ 3,000 people. Both of those numbers are set to increase.
NH Hotels operates a total of 16 hotels in Mexico, basically broken down into two categories: The business traveler category (traditional for NH) and, a developing market, the luxury beach hotel category. Three of NH’s flagship hotels are located in Mexico City – one, NH Mexico City, in the city, one in the city’s historic center, and one, NH Santa Fe, next to the country’s newest financial and commercial district. That last one, just opened this March, is one.
“It’s a very pretty hotel,” said Francisco Medina Elizalde, NH’s director for Mexico and the Caribbean.
The NH Santa Fe is an extension of NH’s business hotel brand in Mexico, and NH business-class hotels can be found in nearly every other major city in the country: Puebla, Guadalajara, Nuevo Laredo, Juárez, and Monterrey. Some of these are NH hotels, while others, though owned by the company, are still operating under the Hilton brand.
The hotels feature all the amenities one would want in a business hotel: wireless Internet, in-room services, and business workstations where travelers can take care of business while on the road.
BRANCHING OUT FROM BUSINESS
While business hotels are NH’s specialty, the company branching out from there in Mexico and the Caribbean. NH’s purchase of the Chatwell Group, which included four 4-star Krystal hotels, was an initial foray into the world and leisure hotels. Located in Veracruz, Ixtapa, Cancun, and Puerto Vallarta, the hotels feature swimming pools, fine dining, golfing, and beachfront locations.
But the plan in the near future is to extend NH’s experience with leisure hotels by constructing a series of luxury resorts under a new brand: Edenh. The first of these hotels opened in January in the Dominican Republic. Edenh Real Arena, a five-star resort concept on Punta Cana, will have 660 rooms, six restaurants, and six bars. Medina called the new, all-inclusive resort.
The next step will be to finish similar Edenh projects in Mexico, such as a “super luxury” resort to be located in Puerto Morelos, on the Riviera Maya, set to be finished sometime in mid-2008. That resort will have 550 units. Another resort, to be known as Edenh Venitian Bavaro, with 375 units, is set for completion in late 2008.
INVESTING IN 2008
The luxury side isn’t the only thing NH is expanding. Medina noted that the particularly strong euro is making investment in Latin America an attractive option for European companies, and NH is no exception. Along with the founding and expansion of the luxury Edenh brand, the company plans to build more of its flagship NH Hotels through the country.
The aggressive expansion plan will play out over the course of the next two years. In February, NH will be opening a new hotel in Monterrey, as well as one more in the international airport in Mexico City, where currently NH operates a Hilton hotel. Other hotels will be going up in Guadalajara and Querétero. A total of five new hotels are scheduled to open next year.
“I would say (they are) mid-range,” Medina said of the hotels. “They’re not super luxury or limited service.”
That, at least, is one trend Medina said NH Mexico is trying to address with its new construction. Business travelers are expecting more services, a bit more luxury in their hotels. NH is making an effort to give the new hotels a better design, better restaurants, and better service options – for example, by putting in technology centers and fax services. At the same time, prices will remain reasonable at a little over $100 a night.
On the luxury side of things, NH is also adjusting itself to the market, Medina said. Vacationers are no longer content to settle for the agglomerated all-inclusive resort with its all-you-can-eat buffet and packed beaches. Things like spas used to be exclusive.
“These days, they’re a commodity,” Medina said.
Vacationers now are looking for value-added activities like spas and fusion cuisine, and are arriving at the resorts with more complicated, sophisticated tastes, Medina said, “not this idea that people are going to go and play volleyball all day.”
In addition to its expansion and adaptation to the new trends in vacation travel, NH continues with its value-added products that have been successful in the past. The company manages its own line of amenities products for its guests, known as Agua de la Tierra. The designs are fresh and creative, Medina said, and the products are imported from Spain. Likewise, the company has a world-famous chef on board as its gastronomic advisor – Ferran Adrià, whose restaurant, El Bulli, has three Michelin stars. Adrià helps design the menu for NH’s Nhube restaurants, one of which is located in the company’s new NH Santa Fe hotel in Mexico City.
Other ongoing initiatives at NH Hotels include work to make the hotels more environmentally friendly. Hilton Guadalajara recently became one of the first hotels in the country to get an environmental certification, and Medina said the company is working toward reducing the environmental impact of all of its hotels. “It’s not easy,” he said, because of the high level of investment required, but he expects to see results within the next few years.
As NH Hotels continues to grow and expand in Mexico, the local division can count on the international support of the company’s “NH University,” where employees can go for training courses that can last from one week to eight months. Trends may force changes in strategy, but the quality of the services, Medina said, is bound to stay the same.