LATAM e-News – June 2018
Interview: Arturo Mario Navarro Ithuralde

Interview
Arturo Mario Navarro Ithuralde
CEO, Aadesa


1- How do you define AADESA and what are the main services provided by the company?
Aadesa is a Latin American company involved in the hospitality industry helping to create, conceptualize, operate, commercialize and manage hotels and is organized into three divisions:
Aadesa Hotels: is the division of the company in charge of the commercialization of all the hotels of the group, using the hotel brand or using national or international brands, as the case may be. Aadesa Hotels is the unit that is in contact with the market offering the entire portfolio of hotels and brands.

Aadesa Capital Hotel Management: is the division of the company that provides services to investors from the beginning of the investment process, such as preliminary market research to evaluate the convenience of investing in a hotel in a specific location, to the services required in the pre-opening stage of the hotel. At the same time, it is the business unit in charge of executing the day-to-day management contracts of the administered hotels. This area is also in charge of the relationship with investors who own the assets after the opening of the hotel. Aadesa Capital Hotel Management is the unit that interacts with property investors.

Aadesa Rewards: is the group’s customer loyalty system. Today it has over 30,000 members travelling through all the group’s hotels.

2- Is AADESA’s business model based on developing its own brands and operating other international brands? Why?
With the objective of providing peace of mind and security to investors, achieving efficient and profitable operations, we independently and carefully choose the best formula to ensure the success of the hotel.

That is why in many cases we choose brands of great importance and trajectory, such as the Wyndham group, as in the case of the 5-star property in Buenos Aires Nordelta where we have the franchise for Argentina of Wyndham Hotels & Resorts, while in other cases we choose newer and fresher brands such as Cyan Hotels or Don Hotels, where the two brands already have more than 18 properties in the market.

In the case of Don Hoteles, the growth of the brand is focused on franchising in the “Soft Branding” model, helping investors who have unique properties, sometimes with difficulties to be profitable.

Both the ‘CYAN’ and ‘DON’ brands were created by Aadesa out of identifying a need to be able to group existing properties into a homogeneous group in order to achieve scales in marketing and operation.

Nowadays these brands can be used by hotels, even in cases where Aadesa is not the operator in charge of the property. The accelerated growth gave us the possibility to broaden their working scope.

3- What are the benefits of the strategic alliance with the Brazilian company Vert Hoteis?
The alliance with Vert Hoteis has been very fruitful for us in only one year. It meant integrating us commercially, so that both groups, in both countries, could offer their clients the entire portfolio of over 37 hotels together with the aim of selling more, paying less marketing costs and unifying a loyalty program for both countries.

A few weeks ago, Vert Hoteis announced a similar alliance to the one with Aadesa Hotels with Atlantica Hotels of Brazil, and we are currently discussing the possibility of integrating our platforms in more than 100 properties owned by them in Brazil.

In addition, these alliances increase our negociating power with all stakeholders in the hospitality industry and give us access to global agreements with companies. We see this as a smart way to grow by joining partners with innovation and technology.

4- In terms of hotel investments, what are Aadesa’s next goals?
The Aadesa Capital division has a development team that structures and collaborates on hotel development projects.

In March we opened a 109-room development in downtown Buenos Aires called Le Petit Suites with the aim of attracting the public for temporary tourism rentals. This property is a “Condo-convertion”, a former hotel that was subdivided into a horizontal property together with UEFIC development group.

In May we opened a hotel in the city of Neuquén with the CYAN brand. The project involved construction of 69 rooms that was commercialized to investors under the Condo – Hotel format, in partnership with BPC development group.

In July / August, we will be inaugurating a 40-units hotel under the “DON” brand in the city of San Carlos de Bariloche. The investment was over USD 3,000,000. It is a high-end product with all rooms overlooking Lake Nahuel Huapi. It is an investment made by Argentines living in Patagonia.

In the coming months we will be inaugurating in the city of La Plata a 100-room hotel with convention center with an international chain. For 18 months we have been collaborating with the pre-opening process of this property, which promises to be the best hotel in the city. The hotel belongs to the Caja de Médicos de Previsión y Seguro Médico de la Pcia. de Buenos Aires.

In the second semester we will open a hotel of the “DON” chain in the 600 hectares Reserve, in the city of Puerto Iguazú. The hotel will have 40 rooms with a 5-star level. The investment is made by a group of Argentine investors.

Aadesa’s objective is to be able to find properties in any destination in Latin America with the purpose of continuing to grow the hotel portfolio. The growth format may be through management contracts or franchises. We are analyzing projects in Puerto Madryn, Ushuaia in Argentina and also in Paraguay and Chile. We aim at being the largest independent Hotel Group in Latin America, always focused on adding value to investors.

5- In which destinations do you think are the best development opportunities and in which segments?
We find opportunities in all destinations, as the growth in demand exceeds the supply within the market.

We find opportunities to transform and improve existing properties or develop hotels in areas where they are not yet available, such as in new roads or highways that are being constructed. We see an opportunity to build a network of road hotels, mainly in Argentina and Colombia, similar to “SUPER 8” style of the United States.

We also see possibilities in setting up a holiday club for families.

As for destinations in particular, there are destinations such as Buenos Aires where it is necessary to structure a better quality offer, since for many years the industry did not invest in new hotels or in renovation of existing ones.

At the same time, we identify opportunities to improve hotel operations in destinations such as Colombia, where there are no longer any tax benefits for new hotels and where there is now a range of very good products with prestigious brands where there are many beds available and it is difficult to make them profitable.

Another city where we see opportunities is Rio de Janeiro, since there is a lot of hotels on offer as a result of the over construction of beds because of the World Cup, and demand cannot grow enough to cover the supply.

In many secondary cities of the region we see opportunities to develop limited service hotels with second brands and growing in the soft branding segment to capture more than 50% of the independent hotel market that exists today.

6- How do you assess the evolution of the hotel market in Latin America in the last years and what are the prospects for growth in the region?
After two years of moderate growth, we understand that years of sustained growth are ahead. Tourism works with stable or turbulent variables. Traveling is already part of life.

7- What do you expect from your participation in SAHIC South America 2018, this year for the first time as a sponsor? In your opinion, how does this type of conference contribute to the hotel industry?
We expect to become known throughout the region. Today we have administrative and commercial offices in the city of Bogotá, Colombia and we hope to be able to operate and commercialize hotels in this country.

The conference contributes to the continuous updating and at the same time to be able to continue growing the network of relationships that are the source of the growth and recommendation of our company.

8- Which social network do you use most often and why?
LinkedIn as it is oriented to human and professional development. Instagram for social and family use. Facebook to show fans the attributes of our hotels.

9- When you travel for pleasure, where do you choose to stay: hotel or airbnb?
Hotels or Houses. Depending on travelling for work or with family or friends. I haven’t chosen Airbnb yet. I actually am an Airbnb Host on a family property, where I allow myself to learn from the platform as a user. We also use a platform called Thirdhome that consists of home exchange between owners.

Profile:

Arturo Mario Navarro Ithuralde is CEO at Aadesa, a company founded by him and his partner Iñaki Gonzalez Arnejo.

Argentinean. He graduated from UCA with an MBA in Business Administration and specialization in Strategy and Marketing.

He worked for companies such as OSDE, FORD and MOVISTAR, and then worked for his own business more than 10 years ago.

Father of 3 children, Justina, Elena and Félix, married to Jimena. He is in love with Patagonia where he practices the sports he loves, such as golf and skiing. He is a River Plate fan and passionate about his work and company.

To contact Arturo Navarro Iturralde: arturo@aadesa.com.ar

To learn more about AADESA, visit: aadesahotels.com