Spain's Riu Hotel Group is looking to expand its reach to Ireland as it makes a play for the €85 million-valued Gresham Hotel.
However, there will be stiff competition for the O'Connell Street hotel from American private equity giants Apollo and Cerberus as well as the Dublin-based Tifco Hotel Group.
It's expected that the final price for The Gresham, which opened its doors in 1817, could rise to €100 million after refurbishments and other costs are taken into account, according to the Irish Independent.
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Luis Riu, who runs the Spanish hotel group with his sister, said “We always search for cities that are attractive for business travellers, but also have the history, heritage, beauty and attractions that make it a fascinating tourism destination. And Dublin has all of these”.
The Riu Hotel Group, which was founded in 1953 and is 49% owned by the multinational travel company TUI Group, say that last year it generated revenue of €1.8 billion and which it expects to rise by 15% to €2 billion this year.
Over the past 12 months it has spent €350 million on the construction of new hotels in the Dominican Republic, Berlin, New York and on refurbishment projects, with plans to invest €500 million this year.
The Gresham, which is operated by Precint Investments, had been heading for sale last year with an expected price of over €60 million. Regarding this years increase in price, Riu says “Of course, every transaction has a turning point in which the expected turnover does not justify the investment.
"There needs to be a balance between the owner's expectations and the profitability that the buyer thinks he can get. But, if we didn't believe in this project, we would have left the bid already”.
Whatever the fate of the 4-star, 323-bedroom Gresham Hotel, Riu hopes that the history and quality of the hotel is honoured.