Riu Plaza: Why this holiday chain entered the urban segment

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

Ten years after starting its urban adventure, Riu Hotels & Resorts marks a new milestone in its history with the opening of the Riu Plaza Spain, as HOSTELTUR tourism news in Riu Plaza España has confirmed exceeds the expectations of the chain to enter Madrid. But what made a purely holiday chain like Riu decide to take the step of launching its own line of city hotels after 50 years focused on the sun and beach? Its CEO, Luis Riu, explains in his blog why and how the Riu Plaza brand was created, which already has 10 stores, three of them under construction.

The trip that Luis Riu made to Panama in mid-2007 to visit Playa Blanca, on the Pacific coast, was responsible. The manager was going to inspect the land that in 2014 became the Riu Playa Blanca, but the project had to wait because it cost him so much to find a room available in Panama City, and the prices were so high, that he decided that “we had found the ideal location to launch our first urban project ”.

According to its CEO, “I found the land on Calle 50, in the financial center of the city, and all the teams went to work to define the project. On this occasion, we not only had to decide what the building and its interior design would be like, but we also had to face new challenges that had not been presented to us before, such as defining the service, marketing and style that we were going to print to the new urban line " (Architecture and engineering, determinants in the expansion of Riu).

The Riu Plaza Panama was among the first of the brand and the one that marked the entry of the chain into the urban market 10 years ago.

Launching a large conference area was one of the great challenges that "we have perfected in the following projects", as Luis Riu acknowledges. And it was "a radically new part of the product for us: the planning of large rooms, their equipment, access for merchandise, for hosted and external customers, or how we connected the kitchen to provide a good service."

Brand Keys

Luis Riu indicates that "there are certain decisions we make from the beginning, and others that we have seen over the years." But what is clear is that the basic conditions for the chain to enter an urban destination with its Riu Plaza brand are these:

• Destination: "We always look for cities that, in addition to large capitals with business, institutional and financial movement, are both tourist destinations." Cities with a huge cultural and leisure offer that annually attracts millions of tourists such as Panama, New York, Dublin, Miami or Madrid. Behind the hotels in Guadalajara, in Mexico, and Berlin there was also a “sentimental motivation”, since the first one “is in a big city where the Riu brand is much appreciated by the nearby hotels of Nuevo Vallarta”; while Germany "has historically been our great market, our ally, and we wanted to offer our faithful German client an urban hotel that would allow us to meet in the city as well."
• Location: "It is very important that the hotel has good access, good connection to the airport and is close to the main tourist attractions of the city." In this sense, he sets London as an example (Riu enters London with a hotel in property), since “until I have found the building located one minute from Victoria Station we have not decided to enter the city”; and New York (Riu invests € 277 M in its first hotel in New York), where “until we saw the opportunity at 46 with Eighth Avenue I did not consider the location to be good enough to launch one of the great works of Riu that I have directed; and the same goes for the second hotel that is already under construction, just as close to Times Square (Riu advances in the process to build its second hotel in New York).
• Size: Since “in order to offer our service at the price we give it, hotels must have a certain size, something directly related to the repayment terms”, so that in order to be “acceptable to Riu” the establishments must have from 500 rooms in vacation and 250 in urban. "For example, we have been looking for several European capitals, such as Paris or Amsterdam, but we have not found the hotel in the location and with the appropriate dimensions."
• Product: “All our urban hotels, each with its own personality, have 4 stars and we were always clear that we wanted the Riu service that has differentiated us over the years to also be present in the city. Our employees offer the same smile, kindness, closeness and service of a lifetime both in the city and on the beach. In fact, the management team, as well as the department and section heads of the new Riu Plaza España, come mostly from our hotels in Gran Canaria."

Where is Riu Plaza going?

The CEO insists “Riu will remain eminently vacation. We will continue to grow in urban, at a rate of an opening every year or every two years, but always at a lower rate than in holiday. Right now, the number of hotels is 90% holiday and 10% Riu Plaza. Maybe this could become 80/20 in the future, but no more.”

Luis Riu, at the head of the team that launched the Riu Plaza New York Times Square.

As for its geographical expansion, “there are destinations that we want to enter and that make me especially excited as San Francisco, but opportunities arise and we must be attentive before others take advantage of them. At the moment we are focused on the opening of the second hotel in New York, the one in Toronto (Riu will build its first hotel in Canada) and the one in London; three big projects in three big cities that will be a great complement to Riu Plaza, as well as a great push for the knowledge and prestige of the brand, as the fantastic Riu Plaza España of Madrid is already, our star project in 2019."

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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