The InTervIew : Federico González Tejera
NH taking the term
Hoteles CEO Federico González Tejera is
“ redefinition ” to a new level . Troubled , Madrid-based NH remains over-exposed in Spain and has inconsistencies with its brands and assets . The company bears the weight of excessive lease contracts , and until relatively new investor HNA Group of China bailed it out in November , NH had serious debt hurdles , which impacted its ability to grow in markets such as Latin America and Asia . But now with a new strategy in place , NH has space to implement its plan , and González Tejera is working fast to re-image the company .
In November 2012 , the former Procter & Gamble and EuroDisney senior executive took over the chain of some 400 hotels that was holding more than € 1 billion ( US $ 1.4 billion ) in debt in the middle of a steep economic decline in its local markets . After four banks cut their investment ties , HNA expanded its holdings to 24.1 % and could be in talks to take its share to 29.9 %. Despite the HNA infusion , suitors who would love to take over the NH portfolio are lurking .
But with a new debt structure comes a more flexible operating framework , clearing the way for funding of up to € 225 million ( US $ 304.4 million ) for NH to implement its five-year strategic plan . Priorities today range from building a new client value proposition to improving management capabilities and refining international growth plans . NH also plans to improve margins by transforming its distribution model , client relationship management and loyalty rewards program .
As part of the plan González Tejera aims to sell € 125 million ( US $ 169.5 million ) worth of assets , mostly in Spain , in pursuit of a more asset-light policy to help NH reduce its debt and improve its balance sheet . Tactical asset sales have already taken place as NH last year sold the iconic Grand Hotel Krasnapolsky in Amsterdam for € 157 million ( US $ 212 million ) while retaining management .
González Tejera is also leading the repositioning of the brand portfolio , focusing on three flags : the luxury NH Collection , core 3- and 4-star NH Hotels and emerging lifestyle brand Nhow . Separately , NH will continue to manage its vacation resort Hesperia brand .
Growth also is high on NH ’ s list with plans to expand further in Latin and South America with investment partners as well as develop in China with HNA , hopefully with the NH brand .
And yes , informal speculation has NH ’ s hotels and brands an effective fit for global hotel companies . “ It therefore remains to be seen whether and when some form of consolidation is achievable ,” says HVS London Chairman Russell Kett . “ In the world of M & A , as far as the hotel sector goes , there are rarely any true mergers . Someone is always dining , and someone is always dinner . I suspect NH could become the latter unless it really can strengthen its balance sheet .”
But González Tejera has an air of confidence and a belief if there is so much interest in the company from investors like HNA , there must be much untapped value in the company ’ s assets and brands .
HOTELS spoke with González Tejera in January , one year after he took over , to better understand his strategy .
HOTELS : What are your impressions of the hotel company ?
Federico González Tejera : You have a true consumer mindset in terms of serving the guests . That was a great surprise .
LasT yEar , NH maiNTaiNEd maNaGEmENT wHEN iT sOLd THE KrasNapOLsKy iN amsTErdam .
NH Hoteles CEO Federico González Tejera has published several books on cultural differences between countries and the experience of a manager being abroad . www . hotelsmag . com March 2014 HOTELS 41