Azora wants to dominate the Italian leisure sector

Madrid-based European private equity property manager Azora has high hopes for the European leisure market and has been busy acquiring assets in anticipation of a major rebound in demand.

In July 2021, it acquired the 383-room Tivoli Marina Vilamoura resort and the 248-room Tivoli Carvoeiro resort in the Algarve region of Portugal through a sale and management transaction for €148 million (174 million US dollars), including a variable price, with Bangkok. international minor.

Then, in December, Azora acquired Bluserena SPA, the second-largest resort operator in Italy, from the Maresca family. The acquisition has been completed on behalf of Azora’s latest €1.8 billion ($2.1 billion) pan-European hotel fund, Azora European Hotel & Lodging, FCR, which becomes more than 55% deployed with the conclusion of this agreement.

Bluserena operates 13 all-inclusive hotels with a total of 4,200 keys across Italy, including eight owned hotels representing 3,000 keys. The hotels, 11 of 4-star category and two of 5-star category, are distributed in the main Italian coastal tourist destinations, including Sardinia, Sicily, Puglia, Abruzzo, Piedmont and Calabria.

The transaction also includes the acquisition of the Bluserena operating platform, which will remain located in Pescara (Abruzzo), Italy. The transaction was the largest completed in the Italian hotel market in 2021, consolidating Azora European Hotel & Lodging, FCR as the market leader in Italy.

Serenusa village of Bluserena in Sicily, Italy

Azora plans to spend 30 million euros ($34 million) on Bluserena properties as well as expand the company in Italy through new hotel acquisitions, leases and management contracts.

In total, Azora has raised more than €5 billion ($5.7 billion) since its inception in 2003 and currently manages a €4 billion portfolio of assets with investments in Spain, Belgium, Portugal, Italy, Germany, United Kingdom and Switzerland, among other countries. It has also entered the American market.

As it becomes a force across Europe and after announcing the deal with Bluserena, HOTELS reached out to Azora management to learn more about the reasons behind the acquisition of the Italian resort operator. We spoke to Javier Arus, Partner and Head of Hospitality Division at Azora, for insight into the latest offering and more.

HOTELS: Where is the potential in Italy? What attracted Azora to the market?

Javier Arus: Italy is the third largest tourist market in Europe and, in addition to its strong international demand, it also has a very large and resilient domestic leisure market. From an ownership and operator perspective, the Italian market is one of the most fragmented markets in Europe – there aren’t many hotel operators and many resorts are family-owned . These factors represent a clear opportunity to build a platform and help grow the presence of institutional investors in such an attractive market.

Azora already had a presence in Italy through the 529-room Grand Palladium Sicilia Resort & Spa in Sicily, which it acquired when acquiring a majority stake in Grand Palladium Hotels & Resorts in 2019. We realized that in addition of a strong and resilient domestic market there were also opportunities to build on Italy’s international demand. As it takes a lot of manpower to acquire a relevant presence in the Italian tourism market, due to its fragmentation, being exposed to this market through the important Bluserena agreement gives us a privileged position to continue to develop our activities. in Italy.

“The biggest challenge for the company will be to develop significant international demand and extend the season at some of its resorts, which have traditionally focused solely on attracting domestic tourists.” –Javier Arus

H: Will Bluserena grow through strict management in addition to acquisitions made by Azora?

JA: Today, Bluserena manages five hotels, which are owned by third parties. Our goal is to make management and rental contracts the main engine of growth for the company. This growth strategy will be reinforced by new acquisitions made by Azora which are part of the Bluserena brand.

H: What are the growth expectations for Bluserena in the next three to five years? Is it strictly leisure or could it extend to urban and professional real estate?

JA: The objective is to double the size of the company in the next five years by focusing on the Italian leisure market (sun and beach; mountain resorts).

H: Where does Bluserena need to improve its operations and what is the plan to address it? What are the biggest challenges for Bluserena?

JA: Bluserena is a successful company with a very long experience and a highly professional team. The business understands the Italian resort market very well and it has always been profitable even during the very difficult seasons in 2020 and 2021. The biggest challenge for the business will be to develop significant international demand and extend the season in some of its resorts, which have traditionally focused only on attracting domestic tourists. In the past, Bluserena was not present in international distribution channels, focusing all its commercial efforts on the domestic market, but Azora will now be able to leverage its international expertise for the benefit of the growth of this brand.

H: What are we going to do to improve the competitiveness of its distribution compared to more well-known properties and operators?

JA: In its segment (4 stars), Bluserena mainly competes with other Italian operators and family properties. To date, the presence of international brands is very limited in this market segment. Bluserena benefits from a very loyal clientele with more than 50% of overnight stays generated by regular/loyal clients. Thus, there are opportunities to increase the company’s direct distribution as well as to develop brand awareness in parts of Italy and other key countries in Europe.

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