Information on the Target

Azora has acquired the prestigious 5-star Marriott Praia d’El Rey Hotel and Golf Resort, located in Óbidos, Portugal. This acquisition includes a 177-room hotel, two renowned 18-hole golf courses, and approximately 90 managed apartments. The hotel is strategically positioned along the Atlantic Ocean, offering direct beach access and is complemented by premium facilities such as multiple dining outlets, a renovated spa, an indoor and outdoor pool, a kids' club, and expansive event spaces.

Praia d’El Rey hotel and golf courses are recognized as one of the leading golf destinations in Europe, having received accolades such as the Golfer’s Choice Award from Leading Courses in 2023. The site attracts visitors not only for its luxurious amenities but also for its stunning natural surroundings and high-quality golfing experience.

Industry Overview in Portugal

The tourism sector in Portugal has demonstrated robust growth, propelled by the country’s rich cultural heritage, favorable climate, and an array of leisure activities. In recent years, Portugal has positioned itself as a preferred destination for European travelers and increasingly for tourists from the United States. This influx has been supported by continued investment in hospitality and infrastructure, enhancing the overall tourist experience.

With an expanding range of accommodations, from luxury hotels to budget hostels, the country caters to diverse visitors' needs and preferences. The growing emphasis on sustainable tourism further complements Portugal's appeal, drawing environmentally conscious travelers who appreciate the nation’s natural beauty and commitment to preservation.

Portugal's golf tourism sector, in particular, has seen significant investment, with numerous golf courses being developed or upgraded to attract international golf enthusiasts. The Praia d’El Rey facility, along with its neighboring courses, exemplifies this trend, significantly contributing to the local economy while appealing to a niche market of golf travelers.

As the Portuguese tourism market continues to mature, operators are increasingly looking toward high-quality investments that can elevate visitor experiences. Properties like the Praia d’El Rey Resort set a high benchmark for excellence, making them instrumental for stakeholders focusing on long-term growth within this promising industry.

The Rationale Behind the Deal

This strategic acquisition aligns with Azora’s vision of elevating its portfolio and consolidating its market presence in Portugal. It reflects the company's strong belief in the potential of the Portuguese tourism sector, particularly its ability to attract both European and US tourists. By integrating the Praia d’El Rey Resort and its associated assets, Azora not only enhances its offering but also ensures a more comprehensive experience for guests seeking leisure and recreational activities.

Moreover, the resort provides opportunities for operational improvements and further investments, which Azora plans to initiate. The goal is to elevate the quality of both the hotel and the golf courses, thereby solidifying the property’s position as a top-tier destination and ensuring ongoing financial returns.

Information About the Investor

Azora is a Madrid-based European real estate investment manager with significant experience in the hospitality sector. The firm manages over 12,000 hotel keys and has invested more than €3 billion in hotel-related projects since its inception in 2011. Azora focuses on a diverse range of hospitality properties, targeting high-end hotels, urban hostels, and opportunities requiring active management and repositioning.

The company operates its current private equity fund, Azora European Hotel & Lodging (AEHL), launched in 2021 with an initial capital of €815 million. Azora has focused on vacation hotels in European hotspots through a value-add strategy. This includes transforming assets to meet evolving market demands and enhancing operational management to optimize profitability, positioning the firm as a leader in the European hospitality investment landscape.

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From an investment perspective, the acquisition of the Praia d’El Rey Resort presents a compelling opportunity for Azora. The resort's established reputation, combined with its excellent location and high-quality facilities, suggests strong potential for growth in both occupancy rates and average daily rates. The alignment of the asset with Azora's broader strategy supports the notion that this venture could yield lucrative returns.

The symbolic consolidation of Azora's holdings in Portugal indicates a strategic focus on high-potential markets within the hospitality sector. By targeting well-situated properties with the ability to attract diverse visitor demographics, Azora is poised to capitalize on the ongoing recovery and growth of the travel industry, particularly in leisure travel.

Furthermore, Azora’s commitment to operational improvements suggests that they will actively enhance guest experiences, thus fostering stronger customer loyalty and repeat business. The operational consultancy and strategic improvements planned for the resort could further amplify its market position, ultimately driving profitability.

Given these considerations, investing in the Praia d’El Rey Resort is not only a strategic addition to Azora’s portfolio but also a robust reflection of the broader optimism surrounding Portugal’s tourism industry and its successful appeal to international visitors.

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