PDG Realty increases operations and enter the hotel market
Valor Econômico
PDG Realty, the largest land developer in the country after the purchase of Agree, will enter the hotel market. The company, which will act as land developer and builder, yesterday signed a memorandum of understanding with the Marriott group, one of the three largest hotel chains in the world, to develop 50 budget hotels in the country over the next five years. The partnership marks the entry of Fairfield flag in Brazil. The Fairfield, very present in the American market is the most economical among the 18 brands that Marriott operates, which has in its portfolio Renaissance Ritz-Carlton and Bulgari. The most direct comparison with Fairfield - although the company does not make it - is the brand Ibis, of the rival Accor.
The rooms are 20 square meters and the daily rate should be around R$ 160 (US$ 94). Altogether, there are 630 hotels with the flag in the world. The agreement foresees preference of both parties in the operation and construction of hotels in the country. The first hotels will be launched already in 2011.
Marriott will manage and operate the hotels, it will also be responsible for submitting to PDG Realty the investors interested in the hotel market in Brazil. "For each piece of land, there will be a feasibility and implementation study, which will be presented to the investors", said Ricardo Setton who will head the new division within PDG Realty. Setton is one of the founders and former member of Agree, which managed to build 28 hotels of different flags. "As land developers, we came out with the warranty of having 100% of the business sold", says Setton. PDG delivers the hotel ready, even with all the furniture.
Investors are mostly sovereign wealth, which have long-term profile and have invested with Marriott in various parts of the world. The hotel itself can be an investor in some funds or become the owner of some hotels. "There are several investors, owners of our hotels in other parts of the world who are interested in investing in Brazil", says Guilherme Cesari, vice president of development for Marriott group in Brazil, hired earlier this year to promote the group's expansion in the country. "In addition to macroeconomic factors, the growth of medium sized cities, the World Cup and the Olympics (2016) attract foreigners to the hotel segment in the country", says Michel Wurman, chief financial and investor relations officer of PDG Realty.
According to Cesari, the advantage in close partnership with PDG Realty is in the land bank and the geographic presence of the company throughout Brazil. The potential of building of the land bank of PDG Realty is of R$ 31 billion (US$ 18.2 billion). The company is in 25 cities. Currently, the Marriott chain has only four hotels in Brazil, where it is for 13 years - it is very far from the rivals as the French group Accor and the newly formed Allia Hotels, that brings together the flags Bristol, Plaza Inn and Solare, with 40 hotels in operation. One of them is near the International Airport of Guarulhos (franchise), the Renaissance, in Jardins, São Paulo; Marriott Executive Apartment, in Vila Nova Conceição, also in São Paulo, and JW Marriott, on Copacabana Beach, which about a month ago was sold to an American fund.