Pierre & Vacances embarks on major renovations

By Jorge Caro

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Example of tourist residence. 371442094/Fokke Baarssen – stock.adobe.com

The group wants to move upmarket and grow. It aims for 2,900 new accommodations by 2026.

Back on its feet, after a Covid crisis from which the group emerged wrung out and which resulted in the arrival of new shareholders and an influx of fresh money, Pierre & Holidays goes on the offensive. The brand of tourist residences wants to boost its offer by managing more accommodation. Objective? Operate 2,900 more apartments by 2026 (+17%). A rate of growth much higher than that of recent years.

For this, the brand will no longer be in the oven and the mill. Exit real estate development, which in the past represented nearly 20% of its turnover. Pierre & Vacances was building residencesthen sold them to small owners to whom it paid rent – they still hold 95% of the apartments. Pierre & Vacances is now concentrating 100% on the business of operator for its new projects. The group will rely on external promoters to build and operate the residences under its brand (looking for tourists to rent goods, services, etc.). The apartments will be owned by institutional investors.

Read alsoAre rents in tourist residences not paid during Covid due?

“This new model will open more residences in a shorter time”, believes Gregory Sion, commercial and digital general manager of Pierre & Vacances. No less than 80 projects are already being developed on this new model along the French coast, in the Alps or in Spain. Along the same lines, Pierre & Vacances has already taken over 11 residences from competitors in recent months.

Owners to pamper

This strategy makes it possible to minimize the risks ociated with the estate market, and therefore focus on an activity with more regular income (apart from a major crisis). A way also to turn the page Gérard Brémond, the emblematic founder of the group, who was forced to hand over when the tourism giant took over at the end of 2021 (Pierre & Vacances, Center Parcs, Maeva, Adagio, i.e. 45,800 housing units operated in 2022). This new beginning occurs in a supportive environment. The group is taking full advantage of the recovery in tourism. The accommodation occupancy rate is 90% this summer. Revenue per available room is up 4% compared to 2022 and 19% compared to 2019.

Read alsoThe noose is tightening on furnished tourist accommodation

The group also intends to move upmarket. The objective is to rent more and more expensively by offering better quality accommodation, while the majority of accommodation is 3 star. “We want 3-stars with good value for money. A great location, very good infrastructure and the apartments are top notch. Let there be a wow effect”, explains Gregory Sion. Work will be implemented. Twenty-eight sites (out of 189) have been or will be renovated by 2024.

The group ensures that it will finance part of it but the small owners will undoubtedly have to put their hand in their pocket. However, during the Covid pandemic, the rents were not paid to them for several months. The group ensures that it will show pedagogy with the owners, in particular concerning the renovation of the interiors. Relations between small owners and Pierre & Vacances have sometimes been stormy. A project that the new management will also have to tackle.

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