Meliá Hotels International announced the sale of seven of its largest resort hotels in Spain to Starwood Capital Group for €176 million. According to a binding agreement, a controlled affiliate of Starwood Capital Group will take a majority stake in seven hotels currently fully owned by the Spanish hotel company. The final completion of the transaction is subject to the final approval of bank financing, and clearance to be obtained by the EU Merger Control Office.
The assets will be held by a new joint venture company in which a controlled affiliate of Starwood Capital owns 80% and Meliá 20%. The agreement also includes the continued management of the properties by Meliá under the Sol Hotels brand.
The deal between Starwood Capital and Meliá Hotels International marks the beginning of a fruitful relationship as part of a plan announced a few months ago to transform and reposition the Sol Hotels brand, which includes a large number of the company’s resort hotels. Meliá has created new and innovative concepts to adapt hotels to the needs and expectations of modern travellers and transform traditional “sun and beach” hotels into something more inspirational and competitive, just as it has already done with other brands such as ME by Meliá, Paradisus Resorts, or Innside by Meliá and other city hotels.
This association will create unique opportunities to grow, and expand these new concepts throughout different locations and markets, and the transaction confirms the strong interest of global investors in having a presence in the Spanish hotel market. The fact that this deal has borne fruit on the basis of a joint venture to re-launch the Sol brand confirms the investment market´s interest in Meliá, and represents a unique opportunity for growth for both parties, both domestically and internationally.
The seven hotels included in the deal represent 2.933 keys, comprising the Sol Príncipe in Malaga, the Sol Lanzarote and Meliá Gorriones (Fuerteventura) in the Canary Islands, the Sol Ibiza and Sol Pinet Playa in Ibiza, and the Sol Mirlos and Sol Tordos (Palmanova, Mallorca). The hotels will all be fully refurbished, the two companies having designed a joint investment plan starting this winter that will see the renovation of hotel facilities and their adaptation to the new Sol Hotels product and service standards to bring about their immediate repositioning and provide a better response to the needs of modern leisure travellers.
After the changes, the Sol Príncipe, Sol Lanzarote, Sol Mirlos and Sol Tordos will continue to operate under the new Sol Hotels brand (with the Sol Mirlos and Sol Tordos being renamed as the Sol Palmanova). Sol Ibiza will become Sol Beach House Ibiza and, in 2016, Sol Pinet Playa will be renamed Sol House Pinet Ibiza. The main portion of the Meliá Gorriones property will continue to operate under the Meliá brand, and the current annex shall be rebranded to Sol Beach House Fuerteventura.