In a few short years, RLH Properties has taken the luxury and ultra-luxury hotels industry in Mexico by storm. In 2015 it became the first listed company focused on this segment in Mexico and has not looked back since. Indeed, working alongside esteemed international operators including Four Seasons, One&Only, Hyatt Andaz, Rosewood, Fairmont and Banyan Tree, RLH Properties is transforming the fortunes of the high-end hotels in its ever-increasing portfolio. The secret of its success? Selective acquisition, local knowledge, and a passion for the visitor experience.
What RLH does is disruptive, in the best possible way. The company identified a gap in the market for a specialist asset management company to work alongside luxury hotel operators – to boost business and also provide an enhanced experience for guests.
Starting with the Four Seasons Mexico City in 2013, RLH now has 11 business lines in the luxury and ultra-luxury market segment, comprising 1,497 hotel rooms, 239 branded full ownership residences, 168 branded fractional units, and an 18-hole golf course.
There are six hotels in operation – Four Seasons Mexico City, Villa Magna Madrid, Rosewood Mayakoba, Banyan Tree Mayakoba, Fairmont Mayakoba, and Andaz Mayakoba. Under development are two more hotels – the One&Only Mandarina and Rosewood Mandarina – plus Rosewood branded residences.
Completing the picture is the stunning El Camaleon golf course, designed by Greg Norman and the first course outside the US and Canada to host a PGA Tournament.
“RLH Properties is a company which manages and operates luxury and ultra-luxury hotels and branded residences,” says RLH Properties CEO Borja Escalada.
“The company was created in 2013 when we bought the Four Seasons Mexico City. In 2015 we realised this could be an opportunity for a company which runs this industry with a different focus and approach.”
Usually, owners of these kinds of assets are more real estate focused – owning the asset, being the employer and simply collecting dividends. Due to Escalada’s background owning an asset management company (which proved a huge success in the renewable energy industry), RLH thought there could be an opportunity for being more active in the management, collaborating with the operators to define the best use of hotel facilities while providing local expertise.
“The way we work with the operators is a bit unusual,” admits Escalada. “Previously, owners or investors would not be so involved in the hotels. That has changed over the years but I think RLH has changed the model more than most. We have an excellent relationship with our operators, they know we are a different animal, as we are a long-term player. We are not the traditional investor who is simply looking for a quick return.
“We are a more demanding client and we have a hotel management team which gets involved in the properties. At first, some operators may find this intrusive, but ultimately we are working towards the same goal – which is having the best operated assets.”
That approach has proved incredibly successful for RLH and its operator partners. RLH achieved excellent results last year despite headwinds in certain markets. For instance, EBITDA grew by 45% in 2019 compared to 2018, which is an amazing achievement. That proves that the way RLH has approached its assets – by working hard, analysing the market, and bringing in new experiences – has delivered enviable results.
But rather than basking in their achievements, RLH is firmly committed to making further improvements to their existing portfolio, while also eyeing opportunities in strategic markets around the world.
RLH Properties now has the Four Seasons Mexico City, four hotels on the east coast of Mexico in Mayakoba, plus three hotel residence developments with Fairmont Mayakoba, Rosewood Mayakoba and One&Only Mandarina. There is also the El Camaleon golf course which hosts the Mayakoba Golf Classic in November. Then on the west coast RLH has the Mandarina development, where the One&Only Mandarina will open on 1 June this year, alongside luxurious residences. Plans are also advancing for Rosewood Mandarina where construction will begin next year. Rosewood Mandarina will also feature 50-70 residences.
Both hotels in Mandarina will have more of a focus on nature, with a polo and equestrian centre, a beach club, plus trails for running and cycling.
“Last year, we decided to expand our operations internationally so we bought the Villa Magna hotel in Madrid,” says Escalada.
“We are very active and looking to expand the company. We think the luxury hotel market in Spain will develop in the coming years. Madrid, for instance, has few luxury hotels compared to other major European capitals. We are also analysing opportunities in other European cities, such as London, Milan, Lisbon, and Paris. We are careful making our decisions. We are a quick investor but also a very pragmatic investor.”
RLH Properties also expects to benefit from a recent change in shareholding, with the respected Chico family acquiring a significant stake (almost 27%) in the business.
“We are a listed company and are always looking to have the best shareholders – those that can add value not only in terms of economic resources but also the same approach when it comes to the luxury hotels market,” says Escalada.
“The Chico family is heavily involved in the hotel and tourism industry so they are exactly the kind of shareholders that the company welcomes. They are a very well-respected family in Mexico, they know the industry, and they share our vision. They also want to be actively involved which we welcome as it suits our approach.”
That approach has reaped rewards across the RLH portfolio. The Four Seasons Mexico City is a great example. In 2018, RLH won a Four Seasons Pinnacle Award for best revenue management. Escalada says RLH has doubled the EBITDA at the property since they bought it and believes that is down to the special relationship RLH has with Four Seasons.
Experiences are also key, and RLH works hard to constantly refresh their offering across all hotels. They have recently opened a diving centre in Mayakoba and have a yacht which enables guests to explore the coastline, plus numerous activities inland.
“Everything comes down to experiences,” says Escalada. “Our guests can choose from luxury hotels anywhere in the world, so we are looking to provide experiences that link emotionally with each property.
“People are looking for unique experiences. Having a great hotel and a great room is not easy, but providing a great, emotional experience is the real challenge and what makes a property more memorable. We need to offer renovated properties and renovated experiences. Experiences linked to the local people and the local cultures. Experiences that will last a lifetime.
“Building an amazing hotel is an issue of money, an issue of property location, and having the right consultants, but building great experiences is about having the whole company working in the same direction – and that is the most difficult part.
“It is not the same coming to our Rosewood as going to a different Rosewood. We create somewhere special. And that is what we strive to do every day.”