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Meliá Hotels International: Positive review of 7 years of investment in the transformation of Magaluf

In 2012, the Executive Vice President and CEO of Meliá Hotels International, Gabriel Escarrer, presented a Meliá project which would transform Magaluf, highlighting the need for a strong investment of capital and know-how (over a number of years), exemplary public-private sector cooperation, and the involvement and onboarding of other companies.

Thanks to the drive provided by Meliá and the fulfilment of all those premises, the Company can now report very satisfactory results in terms of the degree of transformation achieved in the destination. Seven seasons have gone by since the project was presented, with Meliá Hotels International having invested together with partners almost 250 million euros in its 11 hotels in the destination.

Gabriel Escarrer believes that “we Mallorcan people can feel proud again of Magaluf, a destination reborn which once again brings together all the ingredients that make a destination attractive for travellers, investors and workers in the tourism industry”.

The Company has renovated and repositioned 10 of its hotels and completely rebuilt the old Jamaica Hotel, rebranding all of them and introducing the most innovative concepts and prestigious international brands such as NIkki Beach. Meliá has also managed to attract the MICE segment to Magaluf by creating a range of state-of-the-art meeting rooms in several of its hotels.

In this review of the seven seasons, the Company highlights:

Regarding the tourism model:

  • More than 3,500 repositioned rooms in 11 hotels.
  • Improved customer segmentation with a notable increase in the number of families, adults and seniors (80% of the total) with greater purchasing power to the detriment of youngsters and students (the most conflictive segment).
  • Improvements in sales channels with an increase in direct sales (16%) and OTAs and travel portals (33%) bringing new nationalities to the destination and the maintenance of tour operator visitors together with a reduction in their programmes for students
  • Extension of operating periods, also positively impacted by the year-round opening of Calvià Beach The Plaza and 3 other hotels.
  • Increase in direct employment in hotels and indirect employment in construction, renovation, urban planning, services, etc.
  • Earthcheck Sustainability Certification in all the Meliá Group hotels in the destination
  • More than 2,000 square metres of facilities for congresses and meetings

Given the critical mass and proportional importance of the Meliá rooms in the area, the progress reported by the Company has been critical for the spectacular transformation of Magaluf, now the destination with the highest percentage of 4 and 5 star hotels in Mallorca (currently 66% and expected to rise to 70% once current hotel upgrades are completed). The promotion and diversification of the Company’s brands has also been fundamental in attracting a new type of customer to the destination.

Regarding the sustainability of this new model, the Meliá Group also points out the improvement in financial results for renovated hotels as well as greater social and economic profitability for what it describes as the “new Magaluf” for the entire community, as seen in the following indicators:

  • Improved hotel results with an 11% annual increase in RevPAR between 2011 and 2017 and annual occupancy at over 70%
  • Increase of 54% in jobs up to 2017 and a further 15% increase in 2018
  • Annual increase of 8.2% in number of days open between 2011 and 2017

Thanks to the efforts to bring about the transformation, the Meliá Group believes that Magaluf is now a more solid and competitive destination that will continue to improve results year on year despite the growing competition from destinations such as Turkey, Tunisia or Egypt.

With a view to the future, the Meliá Group is asking the City Council to be more resolute about security (even though it has improved very noticeably in recent years) and in improvements to complementary facilities. Now that the type of visitor has changed, it is time to change other businesses (shopping, dining, etc.) to adapt to the needs of increasingly discerning travellers and families rather than youngsters in search of cheap alcohol. Meliá and other private companies have already opened superior-quality restaurant and shopping areas with top brands such as Mango, Women’s Secret, TGB, Urban Food, Tast, Udon, etc.

 

The “icing on the cake” of the New Magaluf: The Plaza Hotel and Momentum Plaza

Meliá Hotels International ends its review highlighting its most recent major investment and the one that has had the greatest transformative impact on the destination: Calvià Beach The Plaza Hotel, built on the site of the former Jamaica Hotel in the very heart of Magaluf. This project has brought about a transcendental urban change by opening up the interior of the destination to the sea and providing Magaluf with the central plaza it has always lacked. Momentum Plaza, located on the ground floor of what was once the old hotel and is now a shopping and dining area with famous brands and superior quality standards, has also brought about a transformation in “Magaluf lifestyle”, allowing tourists and residents to spend more of their free time doing their shopping or dining in a nice, modern, and safe space.

Momentum Plaza hosts international fashion brands (Mango, Women’Secret, Koala Bay), gifts and jewellery, as well as luxury ice-cream parlours such as Rivareno and a choice of restaurants with the widest range of dining facilities in Mallorca (Urban Food, Tast, CHÉ, TGB, Udon, etc.). On the other hand, Calvià Beach The Plaza Hotel has been built following strict environmental responsibility and energy efficiency criteria and adds to the facilities in the area with a spectacular rooftop area with restaurants, bars, and the largest transparent floating pools in Europe. Meliá reports that the hotel has registered average occupancy levels of 74.65% since opening at the beginning of July, higher than estimated, and highlights the significant diversification of its guests, including a very balanced mix of nationalities that reduces the risk of excessive dependence on a single market, and very positive numbers for emerging markets such as Germany or Scandinavia.

To celebrate this specific project which for Meliá is the culmination or the “icing on the cake” of 7 years of investment in transformation, the Vice President and CEO, Gabriel Escarrer, appears in a video shot in Magaluf which highlights the progress made and its significance for the Escarrer family, which as he himself says, “began its major expansion in Magaluf in the 1970s.”

 

Hotel Association review of the year

The Hotel Association of Palmanova-Magaluf also presented its review of the season this week for a destination that has almost 10% of all hotel beds on the island of Mallorca. Overall, occupancy was 3% higher than in 2017 with prices in general remaining stable, despite the fact that a large part of the hotels have made significant investments in improvements and repositioning.

Magaluf now has the highest percentage of 4 and 5 star hotels in Mallorca, currently standing at 66% and expected  to rise to 70% by 2020, with a parallel reduction in the number of 2 and 3 star hotels which host the most conflictive visitors. The destination has also welcomed the recent announcement by the tour operator Thomas Cook regarding the elimination in 2019 of its travel programme for students.

Hoteliers report that 80% of current visitors to Magaluf are families, adult travellers and couples or senior travellers. There has also been a significant reduction in the number of youngsters and students, falling to less than 17% of the total in 2018. In terms of nationalities, the destination continues to diversify, although the British market remains the strongest with 60% of all visitors, followed by the Spanish market and Central and Eastern Europe.

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