The InTervIew : Federico González Tejera
There are significant opportunities to build a truly homogeneous company with a new segmentation of the properties . Secondly , the company has grown significantly and has not looked at areas that are able to deliver great synergies — from standardization of operations to property management strategies . There was no strategy to sell assets to reduce debt . H : What are your strategies for brand standards , segmentation and brands ? FGT : The first thing we tried to do is set up an ambition that whenever anyone
“ Being a target is always great Because that means someone finds more value than the value you show in the market . what i would like to Be is a moving target — a target that keeps growing and improving .”
– Federico González Tejera
contemplates a trip they will always ask themselves if there is an NH Hotel in their destination . That sets the bar very high because if the consumer is going to think like that , we cannot have such a different portfolio of experiences . NH originally was an idea of being a 4-star hotel — that makes the 5-stars redundant . That leads us to review all of our hotels and say , “ Which of these are true NH , and which should be leaving the portfolio because they are not in line with the standards ?” In those hotels that stay with us , there is a
As pArt of A systemwide renovAtion , nH Hotels Are being outfitted witH new beds , plAsmA tvs And sHower experiences . level of investment required . Capex investment of around US $ 220 million will put all the assets in line with consumer expectations . And then you look at the operational promise of NH Collection , NH and Nhow . H : Is the NH Express brand going away ? FGT : We decided we don ’ t want to play in the economy sector . There are around 35 to 40 . Five to 10 can be converted to other NH flags , and the others will leave the portfolio over the next 18 months . H : Tell us more about Nhow . FGT : It is a design brand . We have three hotels : Milan , Berlin and Rotterdam . It ’ s upscale , upper-upscale and will become a key driver of growth and expansion because these hotels have a very good experience and very good ADR . Depending on the location , we ’ ll look to different investment partners . We are not aiming to build or own .
H : What happened to NH ’ s asset strategy that put it into this poor position ?
FGT : Acquisition was the sole strategy . What it missed was a very clear growth plan to drive return on investment , return of capital employed . You need to have a very solid plan that will take you there without acquisitions . So , we need to have a much more proactive view toward property management .
If we find there are assets where we don ’ t see a high return on capital employed and we think that money could be doing better somewhere else , we will sell . We were able to reduce our debt last year from nearly US $ 1 billion to US $ 700 million . Today , there is a need for further asset sales of 120 , but it will be more driven by how we play with the returns on the capital employed in the different locations than by an urgency to sell .
H : Are you planning to retain management when you sell these assets ?
FGT : Yes . We will try to focus on building the brand and the presence of the company . This is what we did , for example , with the sale of Krasnapolsky .
42 HOTELS March 2014 www . hotelsmag . com