Spanish Hotelier Riu Plans Corporate Reorg Amid Growth

Spanish hospitality group Riu Hotels & Resorts plans to merge the two major holding companies it controls. Hotel San Francisco is slated to be absorbed by Riu Hotels by summer. 

"The consolidation is part of our ongoing effort to create a more efficient organizational structure that supports our growth objectives while maintaining our core values," said a Riu spokesperson.

The mostly family-owned business, which operates 98 properties across 21 countries, intends to streamline asset management, reduce administrative overhead, and enhance financing capabilities through the merger. 

The company, led by CEO Luis Riu, is undergoing generational change following the retirement of his sister and co-CEO Carmen Riu last year. The restructuring has seen new family members elevated to the board of directors while others have departed.

The reorg doesn't affect RIUSA II, an entity it half owns with German tour operator TUI.

Riu's Growth and Revenue Goals

The company has several developments underway. Construction continues on the Riu Ventura in Cancun, which will become the company's sixth hotel in that destination and 23rd in Mexico. Development is underway on the Riu Palace Swahili in Zanzibar.

While a majority of its properties are all-inclusive resorts in the Mediterranean and Mexico, it has been diversifying into traditional urban hotels worldwide, such as by buying the Sheraton Fisherman's Wharf in San Francisco for $290 million, which it has turned into Riu Plaza Fisherman's Wharf.

This year, the operator intends to open the Riu Plaza Toronto. Next year, it plans to enter the Thai market with the Riu Palace Phuket.

Spokespeople declined repeated requests for an interview to discuss strategy. The company expects this year to generate a turnover (net revenue) above €2 billion, up at least 11% year-over-year.

The company was profitable last year, generating an EBITDA of about $800 million (€702 million). The hotel and resort group had 6.7 million guests and achieved an 89% average occupancy rate. 

Riu's Social Responsibility Goals

Riu's emphasis on social responsibility has been a cornerstone of its business model.

In Mexico, the company's largest market outside Spain, 21 local charitable projects are attached to Riu hotels. 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 goals across four areas to be achieved by 2026, including attaching all new hotel developments to local community projects.

The program grew out of a longer-term effort at social investment. The company reports that 70% of its hotels now operate with electricity from renewable sources, and it cut its carbon footprint "in half" over the past 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.

Hospitality career profile’s in-depth reporting on climate issues is made possible through the financial support of Intrepid Travel. This backing allows Hospitality career profile to bring you high-quality journalism on one of the most important topics facing our planet today. Intrepid is not involved in any decisions made by Hospitality career profile’s editorial team.

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