Interview with Alberto Llompart of Iberostar Hoteles y Apartamentos

Many thanks to Alberto (General Counsel and Chief Legal Officer), who joined Partner Isidro del Moral to share some fascinating insights into Iberostar’s sustainability objectives, as well as his thoughts on the digital future of hotels and impact of the pandemic.

1. What is the chain's preferred business management model: asset ownership, leasing, or franchising?

Iberostar Group is a 100% family-owned Spanish multinational company based in Palma de Mallorca (Spain), which has been in the tourism business since 1956 and whose origins as a family office date back to 1877 in the shoe industry. The core business of our Group is hotels, with more than one hundred 4 and 5 star establishments, spread over three continents (Europe, America and North Africa), with more than half of our portfolio in property ownership.

We operate all types of hotel establishments and believe in diversification of hotel management, although we are mainly an asset-holding company, as shown by our current portfolio. As for non-property management models, we believe that they are a good vehicle for Iberostar to debut in new markets where there is some uncertainty as to how our sector will react and in less mature destinations that are just starting out in the tourism business.

2. The Iberostar Group is a pioneer in the implementation of measures for responsible tourism by caring for the oceans through the development of its own project, aimed at the protection of oceans and the promotion of a more sustainable tourism model: Wave of Change. Can you tell us about it?

Our aim is to lead a model of responsible tourism; improving our customers' experience while adopting sustainability measures based on a solid scientific basis. We aim to lead on sustainability in the hotel sector and encourage other organisations to adopt a model of responsible tourism. The road ahead is not easy, but it is necessary to secure the future of our industry and of coastal destinations.

As an organisation we have become an international benchmark through promoting a responsible tourism business model that focuses on caring for people and the environment. Our pioneering Wave of Change movement, which we launched five years ago, reflects this specific company commitment to the environment and to the oceans, and the effort to share it with society.

With sustainability as the driving force of our business, at Iberostar Group we place the circular economy at the core of our strategy. In 2020 we became the first hotel group in the world to eliminate single-use plastics in all our operations globally; but this was just the tip of the iceberg. We are now working with our own Agenda 2030 focused on achieving zero waste by 2025, and on climate action to reduce emissions with the aim of being carbon neutral by 2030; 20 years ahead of the target set for the whole sector. In addition, we are moving towards ensuring our seafood supply chain is responsibly sourced by being 100% responsible in our seafood supply chain by 2025, and among other commitments, improving the health of the ecosystems surrounding our hotels.

In 2021 we created the first department in the hotel sector dedicated to eliminating waste which now employs over 130 people. This department currently successfully operates in 17 hotels in EMEA and 24 hotels in the Americas. In terms of responsible seafood consumption this year we have reached 88% of our targets in Spain, 100% in Mexico and 70% overall in all our hotels. And we continue to work to detect, protect and recover coastlines, seagrass beds, coral reefs, mangroves and other ecosystems in both Europe and the Americas.

3. The Iberostar Group has announced that all of its hotels in Spain will consume electricity from renewable energy sources by 2022 with a guarantee of origin - wind, hydro and, to a lesser extent, solar photovoltaic sources - a measure that will avoid the emission of more than 18,000 tonnes of CO2eq per year. How did you achieve this?

This has been achieved by means of an agreement in our electricity purchase contracts (surcharge on the price of energy). We have also invested in solar electricity generation in some hotels. However, this objective has been achieved to a much greater extent through guaranteed renewable electricity purchase contracts.

In January, we announced that by 2022 all our hotels in Spain will consume electricity from renewable energy sources with a guarantee of origin. This measure will avoid the emission of more than 18,000 tonnes of CO2eq per year - this unit (in addition to considering CO2) takes into account other greenhouse gases such as methane or nitrous oxide. This important step, which started to be implemented in most Spanish hotels in 2017, will culminate this year as part of our plan to achieve carbon neutrality by 2030. This falls our own projected Sustainable Agenda for this decade. Furthermore, as part of this roadmap, we started the year with a plan to reduce 8% of our energy consumption in all our hotels by 2022, in line with the target of reducing our consumption by up to 35% by 2030.

4. What benefits will the implementation of the Hotel Digital tool, designed to achieve greater digitalisation in hotel operations, bring to Iberostar?

Hotel Digital is a pioneering open innovation initiative in the tourism sector that is part of the Iberostar Group's Strategic Digitalisation Plan, activating the company's internal and external resources through an innovation methodology integrated into the hotels.

Our goal is to enable Hotel Digital to offer clear and tangible benefits for our customers by achieving excellence in quality and service through technology and digitisation. At Iberostar, we are confident that this project will in turn provide business value that will generate new opportunities for the group, which are essential to help hotels gradually transform the industry: improving customer experience, boosting sustainability and achieving greater business efficiency.

5. How do you see the digital future of hotels? Are we in for big changes?

Iberostar's approach to our project partners was clear: "We want to apply real, scalable, value-adding innovation that substantially modifies indicators related to consumer experiences and information gathering processes to enrich experiences. We are also talking about improving efficiency indicators, increasing revenues, reducing costs and optimising processes.

The hotel of the future will be what clients demand at any given moment. This is why we must have a greater capacity to listen to what clients ask for. At Iberostar, we see it as a very proactive hotel that interacts with clients based on information that has been previously collected and analysed. In this scenario, advanced analytics will play an important role, which will be fundamental in addressing aspects of sustainability, customer knowledge and behavioural modelling. We believe that there will also be a lot of technology which will facilitate the customer's stay and experiences, by giving them access to services and information through other less static and more attractive supports than the current ones. In this sense, technology is the enabler of a necessary transformation. And the great challenge is to undergo constant transformation, but in a rational and efficient way, generating value in each of the steps we take.

6. What measures has Iberostar implemented to deal with the adverse effects of the pandemic on its business, to ensure the safety and health of customers and employees? And along the same lines, have you noticed any differences in the profile of customers who choose Iberostar?

Hospitality and customer service are part of the essence of the hotel industry. This must never change. The experience of the pandemic is proving that customers respect the solidity of companies that care, those that embrace sustainability, and those that maintain quality in difficult situations. At Iberostar, we have transformed the way we conceptualise how we care for our employees and customers. We have reconfigured our way of operating in record time, in an unprecedented process of adaptation, with the aim of ensuring health and safety through our How We Care programme (where we have developed more than 300 hygiene and safety measures together with our Medical Advisory Board), working on a series of hygiene, safety and health actions, hand in hand with science and without taking a step back in our commitment to sustainability. The measures implemented are grouped into four pillars that bring together innovative and responsible proposals to achieve a top-quality experience: safe environment, hygiene standards, social spaces, and innovative experience. This year has been a turning point in the working model of many organisations and has reaffirmed our vision of working towards a more responsible type of tourism.

At Iberostar, we continue to work with a focus on consolidating the chain's leadership in responsible tourism, and we are also committed to constant product innovation and a digital commitment to the customer experience.

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