In the context of your expansion strategy, what have been the major issues you have had to address in order to invest in Jamaica?

Jamaica is a great place for investment in the hotel industry, especially in light of the positive image that Jamaica already has in the world.

We are planning to build a 400 to 500-room hotel in this area, and our market research shows that demand will be high enough to support such a large hotel. Our expertise in the Caribbean will be a strong asset, especially since we have had a great deal of success in other Caribbean destinations. Moreover, our main business is focused on beach resorts, and Jamaica has a tradition for all-inclusive resorts, so I believe that this is a great partnership.

Within the Caribbean we consider Bahamas, Puerto Rico and Jamaica to be the three most important places to invest in, especially since each market is mature enough for our investment to be recovered in a relatively short period of time.

European tourism has traditionally been linguistically segmented - Spanish tourists often go to Spanish-speaking islands, while British tourists mostly visit British islands… Will Barceló go against this trend by attracting Spanish speaking tourist to Jamaica? Or do you plan to concentrate your promotional efforts in the US and UK markets?

Barceló is a strong company in the Caribbean and although we work closely with the Spanish market, we also have many clients in Europe, Latin America, the US and Canada. In fact, the total percentage of Spanish guests in our Latin American hotels only account for 15% to 20% of our total occupation. Therefore, language should not be an issue for a Barceló hotel in Jamaica, since our demand is quite diversified.

From a marketing and sales point of view, I have to admit that we are one of the last companies to launch a hotel in Jamaica, so we have to position ourselves in the best way possible in order to successfully compete with them. I must admit that it has not been easy to find the right spot to open a Barceló hotel, yet we needed to have the best conditions in order to be competitive against multinational hotel chains that already operate in Jamaica.

What is your strategy for the development of new hotels and of new destinations, and how do you plan to develop demand for a new facility like the Barceló Jamaica?

We have around 140 hotels worldwide and work with the major tour operators of the world. First, we consult them and ask them their opinion as to whether they would be willing to support us in a new market. If we receive positive feedback, we can move confidently and develop market research that will examine the profitability of developing a new hotel.

We also need to expand our offer. Tourism is no longer a luxury and people feel compelled to go abroad and travel at least once a year. Cuba, Mexico and Dominican Republic are currently the hot Caribbean destinations, and Barceló is present in each of them. Yet after a few years of travelling, the customer needs new destinations. So we have to open up our portfolio of hotels and offer more destinations in the Caribbean, or we will lose the loyalty of our customers.

We are excited about expanding in Jamaica and we believe this island is going to be the new hot spot for European tourism in the near future.

Currently 72% of the tourists coming to Jamaica are from the United States. Considering that you already have 55 hotels in the United States, will you use your existing properties to market a new hotel to the U.S. public?

We already have partners in the United States who work with us to promote many destinations and to arrange charter operations. Our partners know our brand and we have established a close relationship with them in order to attract the final customer.

Even though brands like Hilton or Sheraton are more recognised than ours in the United States, they cater to a different segment. For example, Hilton people would not take a charter flight; so we are working with tour operators who can generate demand, market our image and arrange charter flights to our destinations. It is a close-knit partnership.

It is true that, as a Spanish hotel chain, our expansion strategy in the Caribbean is more challenging. This is one of the reasons for which we often purchase and build the operations ourselves. Yet it is a snow-ball effect - customers who feel comfortable in a Barceló in Mexico will definitely feel comfortable here in Jamaica too - this is part of our branding strategy.

According to you, what are the investment opportunities in some of the smaller islands of the Caribbean?

Every single Caribbean island, from a government point of view, wants to have Barceló in their country. They treat us like kings because they want our company to be there - they want us to go there, build and manage the facility and market it through the extensive Barceló network worldwide, yet they also want us to assume all of the business risk ourselves.

Considering that a 400-room hotel translates to an investment of approximately US$40 million, the investment incentives given by some of the smaller islands is not attractive enough. In order for us to be interested we need a support equivalent to 70% of the investment, and at that point it becomes interesting.

Having said this, we are eager to expand in the Caribbean, but in risk-sharing partnerships with local governments. Government officials in the Caribbean should realise that building a Barceló hotel will attract a great deal of tourists from Europe. A strong support in the initial stage of development can also help us increase our presence in the long run, like in Cuba where we are already building a third Barceló hotel.

Local governments have to determine what kind of market they want to focus on: the exclusive, upscale market or massive, medium market. If they want massive tourism, Barceló is definitely the answer. We have been in this business for more than 20 years, and once we sign on to a new destination, we make sure that the tourists will come.

Are we going to see many more Barceló hotels in the Caribbean in the next few years? What are your expectations?

Worldwide we currently have 140 hotels, but I expect that we will have 200 hotels in the next 10 years. In the Caribbean area I anticipate that we will open 20 more new Barceló hotels, acquired through management, leasing or building agreements.

What do you consider to be your best achievement this year?

We are currently building a 1000-room hotel in Mexico and a third hotel in Cuba - we keep expanding! Meanwhile we are streamlining our operations, improving our 3-star hotels and creating more new opportunities.

The new Barceló brand is also one of our greatest achievements this year. We have had the same brand for 50 years and we have just improved it. As a recommendation from our tour operators, we have decided to get rid of the star-ranking system, since the levels are very different in every region of the world. Now we have three levels called Comfort, Barceló and Premium. All of our hotels are star-free and categorised by one of those three names, which has helped to ensure the quality and dependability of our establishments.

Copyright © 2004 World Investment News