LGBT-geared Axel Hotels looks to expand in Europe, US
 
LGBT-geared Axel Hotels looks to expand in Europe, US
01 NOVEMBER 2016 7:29 AM

Axel Hotels, a hotel chain based in Barcelona targeting a growing LBGT travel market, hopes to open 10 hotels every three years, said President Juan Juliá. 

MADRID—Spanish gay-friendly chain Axel Hotels is betting on the growing LGBT travel market with an ambitious expansion scheme that includes new properties in Europe and the United States. Those plans are being buoyed by an influx of money from southern Europe.

In a deal announced in July, the Barcelona-based chain will receive a capital infusion from investment group Aristaeus Limited of €11 million ($12.1 million). Along with the cash investment, Aristaeus Limited takes a 15% stake and its real estate division will cooperate with Axel in the purchase of assets to be managed by the chain.

“Our partner is the subsidiary of a large Turkish investment company with a big presence in Europe and the United States in several sectors, which gives us the financial strength to grow globally,” Axel Hotels President and founder Juan Juliá said. 

“What we want to accomplish is to open 10 new hotels every three years … right now we’re closing deals in southern Spain and Madrid and, if all goes according to plan, we’ll then open in Miami, maybe Ibiza and perhaps another European city,” Juliá said.

Business plan
Axel opened its first hotel, a 66-room property in an elegant 19th century building, in Barcelona’ s gay district of Eixample in 2003. It proved so successful that five years later, Juliá bought the building to boost the room count to 105.

Axel now has a second Barcelona hotel with 87 rooms, along with a property of 92 apartments in the Canary Islands resort of Maspalomas and the 87-room Axel Hotel Berlin in the German capital. In October the brand announced its second property in Berlin, and its Madrid property is slated for a 2017 opening.

Average occupancy is around 98 percent, according to Juliá. Standard rates for a double room are €130 ($143) per night at the flagship Barcelona hotel, and €95 ($104) at the Berlin hotel.

“I got into the hotel business because I noticed that some of the five-star chains were not gay-friendly, and my partner and I sometimes felt less than welcome when we would check in at reception,” Juliá said.

“I asked myself, ´Why can’t gay people check into a hotel without getting strange looks?´ So I did the research and decided to try to open my own hotel. … it wasn’t easy to get financial backing because I was young and had no track record. But once we were open, business just took off.”

According to Out Now Global, a Netherlands-based agency specializing in gay travel, the global LGBT travel industry is valued at more than $200 billion. Meanwhile, the Gay European Tourism Association estimates the total expenditure by LGBT Europeans on travel at $63 billion.

LBGT-friendly markets
As acceptance of the LGBT community spreads, global hotel brands like Marriott, Hilton and Starwood have taken notice and begun to target those groups with special ad campaigns, said John Tanzella, president and CEO of the Florida-based International Gay & Lesbian Travel Association, which promotes LGBT travel and gay-friendly businesses in the sector.

“It’s important to have safe, welcoming spaces for LGBT travelers, as we still don’t have equality in the majority of the countries of the world,” Tanzella said. “Although the cities where Axel hotels are located are LGBT-friendly, the guests could be coming from places where they still have to live in the closet, and this is the one time they get to truly be themselves.”

Juliá said Axel Hotels has also considered opening properties in Istanbul and Bodrum in Turkey, a conservative country where society has not always been tolerant of gays and where Islamist sentiments are growing.

“Istanbul, for example, has an amazing nightlife and shopping, (but) we might have to operate more quietly and perhaps be a light in the darkness, so to speak, by helping the community there be more accepted,” he said, adding no decision has been made yet. “Our partner knows Turkey very well and will advise us accordingly.”

Integration
Axel properties are famous for holding special themed parties and performances throughout the week designed to appeal to specific groups within the gay community. For example, “at our other, smaller Barcelona property, Two Hotel Barcelona, there is no restaurant and a smaller bar for those guests who are less interested in a party atmosphere and want a quieter hotel experience,” Juliá said.

Although gays make up the majority of guests, the chain also advertises itself as “hetero-friendly.” Juliá estimates that approximately 25% of guests at its Barcelona properties and 15% at the Berlin hotel are straight.

“Among millennials, there is a wider acceptance of gays, who feel quite comfortable staying at a hotel filled with same-sex couples, and this tolerance makes a good atmosphere,” he said.

“But there are no families with kids here, as we have an ´adults only´ policy because our guests usually like to sleep in late and children don’t.”

Axel’s hetero-friendly message “goes a long way” in Europe and North America, where there is increasing integration between LGBT millennials and their straight counterparts, IGLTA’s Tanzella said.

“Axel is a very chic brand with the kind of cutting-edge marketing and reputation for great events that speak not only to the LGBT community but also to our allies so their expansion plans make sense,” he said, predicting that the gay travel and hotel markets will continue to grow globally.

“And we’re seeing more specialization. For example, our tour operator members are organizing small group trips that focus on adventure, voluntourism or river cruising. Destination weddings and honeymoons are also on the rise, and we’re seeing more travel to emerging destinations like southern Africa, Vietnam and Myanmar.”

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