COMPANY HISTORY
The NH story is one of growth, growth in establishments, quality and prestige over its 40-year track record. Today it is a benchmark operator of city hotels in Europe and Latin America. It operates more than 350 hotels in 28 markets, including top city destinations such as Amsterdam, Barcelona, Berlin, Bogota, Brussels, Buenos Aires, Düsseldorf, Frankfurt, London, Madrid, Mexico City, Milan, Munich, New York, Rome and Vienna.
FIRST STEPS: BIRTH OF THE NH BRAND AND EXPANSION IN SPAIN
NH Hotel Group’s beginnings date back to 1978, when it opened its first establishment: the Ciudad de Pamplona hotel. Four years later, the chain moved beyond the region of Navarra: by adding the NH Calderón de Barcelona to its portfolio it took its first steps towards nationwide growth, expansion that would gather momentum throughout the 1980s.
Just one decade on from its incorporation, the Company was running hotels in Madrid, Barcelona and Zaragoza, having established itself as one of Spain’s leading chains. Corporación Financiera Reunida, S.A (COFIR) became the Company’s core shareholder in 1988.
1990S: CONSOLIDATION OF THE NH MODEL
By the end of 1995, NH was already one of Spain’s leading city hotel chains, with 54 establishments located nationwide. That year, NH Hoteles began to manifest its strategic commitment to culture with the launch of what are today known as the Mario Vargas Llosa NH Short Story Prizes, aimed at helping fledgling writers and encouraging reading and the literary creation process.
1996 and 1997 were key in shaping the Company’s future. In tandem with the De Benedetti Group’s exit from the shareholder ranks, COFIR embarked on a radical change in strategy, deciding to concentrate and consolidate the activities performed by its main subsidiaries, including NH Hoteles S.A. It was against this backdrop that COFIR acquired 100% of NH’s equity. One year later, this new strategic direction culminated with the merger of the former COFIR and NH Hoteles. The new company, which took the name of NH Hoteles, was floated on the stock market. Those were also the years in which the chain set up one of the initiatives most intricately linked with the quality of its services and the development of its employees, an initiative which continues to thrive today: the corporate university, known as NH University, created to provide all-encompassing, ongoing training to the entire workforce.
As part of its strategic efforts to foster culture, in 1998 the chain launched NH Stock Art, travelling exhibitions in the vicinity of the Group’s hotels in a bid to support the work of upcoming artists. This was also the year in which the Group launched its corporate website, www.nh-hoteles.com, adding a new and direct sales channel.
The end of the decade also marked the start of the Company’s international expansion. In 1998 the chain established a foothold in Latin America and in 1999 it began its European adventure in the wake of the acquisition of a stake in Jolly Hotels (19.1%). It was also the year in which it formed a strategic alliance in MERCOSUR for investing in Latin America by means of the creation of the Equity International Properties fund. By now the Company was running 88 hotels and this growth trajectory was evidenced by its debut in Spain’s blue chip stock index, the IBEX 35.
In 1999 NH Hoteles also acquired 91.5% of Sotogrande, a company devoted to the development of premium residences designed for family living.
GEOGRAPHIC EXPANSION AND GROWTH
In 2000 the Company acquired the Dutch hotel chain, Krasnapolsky, a transaction which doubled its size. In the wake of this deal, NH had 168 hotels, 7,300 employees and a footprint in 15 countries, with Portugal joining the fray shortly thereafter. This positioned the Company as Europe’s third largest hotel chain and made it the leading player in most of its top city destinations.
The acquisition of Mexican hotel chain Chartwell in 2001 added another 14 establishments. At this juncture, the Company decided to operate worldwide under a single trademark and to integrate its existing nine sales offices located all over the world.
In 2002 NH continued its M&A-led international growth strategy, acquiring the German chain, Astron Hotels, which added 46 hotels in Germany, six in Austria and one in Switzerland to the burgeoning portfolio.
In 2004 the chain entered additional new markets. With 240 hotels and 35,000 rooms in 18 countries in Europe, Latin America and Africa, in 2004 and 2005 NH Hoteles entered the Italian, Rumanian, UK and French markets. In the latter two markets, the chain opened its maiden hotels in London and Lyon, respectively. In 2006 the Company surpassed the 14,000 employee mark and the chain became the undisputed sector leader in Italy following the acquisition of local hotel chains Framon and Jolly. That year, in Milan, the Group opened its first nhow, a new class of hotel targeted at a contemporary, sophisticated and cosmopolitan clientele. Having been awarded the Prince Felipe Award for Excellence in Tourism and been named the Best Place to Work in Spain, Holland and Germany, NH Hoteles started out 2007 with 341 hotels in 21 countries on three continents, 49 projects in the pipeline and 19,000 employees of 115 different nationalities.
In 2009, NH and Spanish chain Hesperia agreed to merge their respective hotel management businesses. Thanks to this transaction, NH Hoteles took over management of the 51 hotels owned and operated at the time by Hesperia.
That same year, NH set up a purchasing cooperation platform. The platform, called Cooperama, was designed to additionally service other chains, thereby enhancing sector competitiveness. Throughout these years, NH Hoteles continued to earn accolades in nearly all its lines of initiative. By way of illustration, its room designs picked up the European Hotel Design Awards in London.
NEW PRODUCTS, SUSTAINABILITY PLEDGE AND INTERNATIONAL CONSOLIDATION
In recent years the Group’s unflagging environmental commitment has emerged as one of the cornerstones articulating all of the Company’s initiatives. In 2010, NH Hoteles launched a pioneering product, Ecomeeting, in the MICE segment.
Ecomeeting is a sustainability-driven concept for the organisation of events, congresses and conventions which implies an environmentally-friendly use of energy resources as well as the use of low impact, fair-trade products. That same year, the Company innovated again with the NH Sustainability Club, an in-house think tank for creative eco-conscious product and service development. In parallel, the Company moved its customer management operations forward by centralising reservations for its main operating markets. Also in 2010, the Company received several prizes for various facets of its corporate responsibility effort, including awards for its involvement in community projects, its employee-motivation initiatives and its efforts to engage its suppliers in the development of environmentally-friendly projects.
By 2011, NH Hoteles was positioned as one of the world’s top 25 hotels and one of Europe’s most important chains, with around 400 establishments and 60,000 rooms.
In 2012 NH Hoteles articulated a new corporate governance model, appointing a new non-executive to chair its highest governing body and a new CEO, thereby splitting these roles and duties. This was the new team appointed to tackle the most far-reaching transformation ever embarked upon by the Company, change which began to materialise in 2013.
NEW NH
2013 was a milestone year in the Company’s ongoing transformation. Having increased the Company’s liquidity and solvency by issuing equity to its new core shareholder, HNA, while making progress on the asset restructuring effort, the Group articulated a new debt structure befitting of its business plans.
In September 2013, the Board of Directors approved a five-year business plan, inspired by the Company’s new vision and designed to drive the Group’s business by means of a new value proposition, an enhanced guest experience, better sales and communication strategies and a portfolio of quality hotels which give consumers what they are looking for.
After re-establishing the financial balance and ensuring the availability of additional resources for supporting the investment and repositioning plan concerning the hotel portfolio, 2014 marked a major step forward towards the implementation of a model that guarantee a sustainable and profitable future, full of opportunities for NH. One year into the implementation of the ambitious transformation plan, solid progress has been made in all areas. This had a positive impact on the Group’s results and the level of trust our investors place in us.
Each and every one of the initiatives focused on increasing the revenues, improving margins, growing, and optimizing the management and organization capabilities. Thus, during this period, NH built a value proposition materialized in a new brand architecture under the NH Hotel Group umbrella that includes NH Collection, NH Hotels, nhow and Hesperia Resorts. Each of these brands has its own operational promise and its own tangible and differentiated experience. Experience and hotel refurbishment was a priority in this first stage of the plan. On the one hand, the Group has incorporated new elements that make the NH experience new and differential: exclusive mattresses, state of-the-art LED television sets, professional hairdryers, top quality showers, and new amenities. They are the called “Brilliant Basics”. On the other hand, the Company made progress in the repositioning of its assets through the total or partial refurbishment of many buildings worldwide. In addition to reviewing and promoting commercial, marketing and communication plans, in 2014 the Group made an effort to design solutions with a competitive advantage. Proposals that match the lifestyle, work and modern communication methods of consumers, with a view to always exceed their expectations. An example of this was the launch of “High Tech Made Easy” in the meetings and events segment, which not only includes an extraordinary Wi-Fi connection, revamped meeting rooms and new generation interactive collaboration systems, but also live 3-D technology for high-performing and high-impact meetings and events. These are pioneering experiences in the sector that put NH Hotel Group at the forefront of innovation within the hotel industry.
Concerning Asset Management, the Company identified where NH wanted to be and how, exiting establishments that failed to meet the Group’s expectations. Additionally the sale of Sotogrande allowed NH to maintain other strategic assets for the Company.
Regarding the Expansion Plan, at the beginning of 2015 the Group completed the acquisition of the Latin American chain Hoteles Royal which allowed NH Hotel Group to launch its brands in Colombia, become leader in Bogotá, and increase the presence in Chile and Ecuador. At the same time, a joint venture in China progressed as planned and NH expect to develop a hotel portfolio in that country.
