Spanish hospitality group Riu Hotels & Resorts The company has announced plans to merge its two largest holding companies. Hotel San Francisco will be acquired by Riu Hotels this summer.
“The consolidation was part of Riu’s ongoing effort to create an organizational structure that is more efficient and supports our growth targets while maintaining core values,” said Riu’s spokesperson.
By merging, the mostly family owned business that operates 98 property across 21 countries aims to streamline its asset management, reduce administrative costs, and improve financing capabilities.
Luis Riu is leading the company through a change in generation following the retirement last year of his sister, Carmen Riu. In the restructuring, new family members have been elevated to the board while others are leaving.
RIUSA II is not affected by the reorganization, as it shares a half-ownership with German tour operator TUI.
Riu’s Growth and Revenue Goals
The company is currently working on several projects. Construction is continuing on the Riu Ventura hotel in Cancun. This will be the company’s 23rd hotel in Mexico and sixth in the destination. The Riu Palace Swahili is currently under construction in Zanzibar.
Riu Plaza Fisherman’s Wharf was created from the Sheraton Fisherman’s Wharf San Francisco, purchased by the company for $290 million.
The operator is planning to open Riu Plaza Toronto in 2019. Next year it plans to enter Thai market with Riu Palace Phuket.
The spokespeople have declined to give interviews about strategy. The company expects this year to generate a turnover (net revenue) above €2 billion, up at least 11% year-over-year.
The company generated an annual profit of $500,000 last year. EBITDA of about $800 million (€702 million). The hotel and resort company had 6,7 million guests with an occupancy rate of 89%.
Riu’s Social Responsibility Goals
Riu’s business model is based on its commitment to social responsibility.
Riu hotels in Mexico, its largest market outside Spain are associated with 21 local charitable projects. A case in point: Over the past 15 years, the Riu Plaza Guadalajara has funded the education of 17,000 children at the neighboring José Vasconcelos public primary school.
The company’s “Proudly Committed program” established 25 sustainability objectives across four areas by 2026. These included attaching new hotel developments with local community projects.
The program is the result of a more long-term commitment to social investment. The company reported that 70% of their hotels are now powered by renewable energy sources and they have cut their carbon footprint in half over the last two years.
Last year, the company invested €4 million in community projects, or 0.1% of $4.6 billion (€4.08 billion) in gross sales.
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