Alexandre Solleiro, CEO of Tivoli Hotels and Resorts, tells ABTN about the Portuguese hospitality industry and why hotel growth in Brazil is on the horizon.
Let’s start by talking a bit about the locations of Tivoli hotels...
We now have 14 hotels, five of which are city hotels – in Lisbon, Coimbra and Sao Paulo. The other nine hotels are more resort destinations. Those hotels are in Sintra and the Algarve in Portugal, and Bahia in Brazil, where around 85% of the customers are leisure.
However, we also have, in our leisure hotels, a very nice MICE (meetings, incentives, conferences and events market), because most of our resorts are equipped with meeting rooms with large capacities. In one of our hotels, Tivoli Marina Vilamoura, we have the biggest convention space in the Algarve. We can host congresses there for up to 1500 people. This means the MICE industry is big business for us.
In our city hotels, mainly in Lisbon, we have a growing percentage of leisure customers that come to visit Lisbon for city breaks – this is more and more a very interesting aspect of the business.
We are considered to be the best hotel chain in Portugal – it’s not our own words, it’s the words of Publituris, one of the main Portuguese magazines for tourism. Every year they rank the best hotel chain, and we have won it two years in a row.
As for Brazil, Sao Paulo is a very industrial business city, but we have a very good location downtown, in the Jardins area and close to the shopping district and some important museums. Since our opening 18 months ago we have seen that during the weekends and holidays we have customers coming from other cities in Brazil for the shopping. This means that even in the business hotels we have a lot of leisure customers.
And you are a member of the Global Hotel Alliance (GHA)...
Two years ago we entered the alliance. We are now seeking more international exposure, through the GHA and through the alliance’s loyalty scheme, GHA Discovery. The hotels that are part of GHA will be able to recognise and reward the guests that are members all over the world. Being part of GHA is also a good sign for us, as they only choose the best hotels from each country to represent them. We were very glad when we approached by them, and to have joined successfully.
Do you think the loyalty scheme will mean more business for Tivoli hotels?
Yes of course, because nowadays already more than 70% of our customers are from outside Portugal. The big chunk of them are from Europe, North America and South America – this is also because we have properties in Brazil.
This recognition card will allow more customers of the other member chains to know that GHA has a chain here in Portugal, that will provide them with the same recognition that they usually have when they stay in their home countries. It is very important for us to tell international customers that we are here in Portugal and Brazil to welcome you.
What are the latest developments at Tivoli Hotels?
We started refurbishing all our hotels in 2008. We did a major refurbishment in both hotels in downtown Lisbon – the Tivoli Lisboa and Tivoli Jardim – and last year we began refurbishing the Tivoli Oriente, which is five minutes from Lisbon airport. We began by refurbishing the rooms, and we did a complete overhaul in the lobby and the bar, plus we created a new restaurant with the French chain Hippopotamus. That opened in October and we are very happy with the success it is having, not only for the restaurant itself but also for the image of the hotel.
Do you think that is a growing trend in the hospitality industry – bringing in established restaurant brands to hotels?
I think so. In fact, we decided to do that in 2007 with Tivoli Lisboa. We made a franchise agreement with Brasserie Flo in Paris. It has been quite a success. Then we did a joint venture with a very well known young chef, Olivier Avenida, in Tivoli Jardim. And finally, in our hotel in Sao Paulo, we also made a venture with the very well known Spanish chef Sergi Arolo. He has a two-Michelin star restaurant in Madrid. We called our restaurant Arolo 23, because it's on the 23rd floor of the hotel. This is something that is really helping to bring image and profits to our hotels. Restaurants in hotels have the reputation of not being very friendly or interesting, so bringing well known brands and good chefs to our restaurants is a very good initiative.
So it's a success in terms of both a hotel's image and its finances?
I think so. We have decided to do it also for the hotels' spas. Instead of creating our own brand, we made a venture with Banyan Tree, which is a very high-end brand for spas in Asia. We have already opened two spas with them here in Portugal, and one in Brazil in Sao Paulo. In the future refurbishment of our hotels, we are going to create two more Banyan Tree spas, one in Lisbon and one in the Algarve. When a customer looks at one of our hotels and sees there is a Banyan Tree spa I think it gives a very good idea of the level of that hotel.
Restaurants and spas, aside, what future plans do you have for Tivoli?
The plans now are to keep steady in our strategy, and mainly that is related to the quality, environment and security of our hotels. We have had, for the last five years, a very steady policy towards the environment. Two years ago we created a carbon neutral plan for our hotels, meaning that we are investing in equipment, with the objective of reducing the carbon footprint of our hotels. And we also ask our customers if they want to contribute to reduce their carbon footprint when they are staying at our hotels.
We have two projects to offset our CO2. One is a project in Sintra, where there is a huge forest. We are cooperating with the management of the forest to refurbish it, and to create areas where visitors can walk or cycle. So it's not only to get the money to put new trees somewhere, it's something that helps the destinations where we are. The second project is in Brazil. With the mayor of a city near Sao Paulo, we have created a new forest area, which is also a way of creating new jobs. With the forest, we have given some 20 families the opportunity to plant the trees, but also to have their own business by selling plants.
I understand there is also a guaranteed recycling scheme...
We have been separating waste in the hotels for a long time. In the hotel rooms we ask the customers to separate their rubbish – we have special bins with four compartments, one for each type of waste. And then all the separation is done beginning in the rooms, to the end. We have a 100% recycling guarantee, meaning that we separate all the rubbish we produce in our hotels. We are certified by a Portuguese company, puntoverde, which certifies according to the rules of the European Union.
Do you think hotels should be doing more recycling?
I think so. We receive customers from all over the world.Hotel guests create a lot of waste. I think it must be the duty of the hotel to protect the destination. If the destination is not protected, the hotels will lose value, as will the destination. One of the things i think more and more tourists want to be sure of is that wherever they go they can come back with their conscience clear. It is our task in the hospitality industry to provide the tools for the customers to see we do our job well, and that we are concerned with the environment – that we ask them to help us with that.
Are there any plans to open any new Tivoli hotels?
We are looking at a lot of opportunities, mainly in Brazil where the market is growing. But it is too soon to say any more. Our two hotels in Brazil were very well received by the market in general. We have very good occupancy rates and reviews. Brazil is certainly somewhere we can develop more.
Do you see opportunities for growth in the Brazilian market?
I think there is plenty of room for growth in quality terms. The Brazilian economy is growing very steadily. The quality of hotels was not that good in the past, but there is now a very good movement in the hotel industry to increase the quality of the hotels. And there will be new hotels that will be added. I think we are observing a very good trend in Brazil and for sure we will see some growth over there.
In the five-star market?
We are in the luxury and four-star plus market. We have both types of hotels. In Brazil maybe we will have one or two more five-star hotels, but mainly it will be in the four-star upscale market.
You mentioned Tivoli has a lot of MICE business. How has this fared during the recession?
We have seen that during the recession the MICE business didn't stop, but it did get a bit slower than usual. In Lisbon, in 2009, we opened a new business centre with a lot of meeting rooms. We more than doubled our capacity. This meant we didn't feel it that much in Lisbon, because we added meetings space, and we were able to open our doors to some meetings that we couldn't have before. So in fact, even during the recession, the MICE business went up in Lisbon. But in general [across the portfolio] during the recession the MICE business went down.
And how is it now?
In general we are seeing that business is recovering. Last year, in six hotels we saw an increase in occupancy. Prices are not at their expected level yet, but I think that this is something which is normal. After a recession, the first preoccupation of the hotel industry is to recover activity, and then slowly recover the price levels.
Do you think the Portuguese national debt is affecting consumer confidence?
It might be worrying the Portuguese business, but more than two thirds of our business comes from abroad. If the economy is recovering in Europe, North America or South America, we suffer a little bit less because our business is much more international.