Paradores de Turismo de Espana S.A.

Requena 3
Madrid E-28013
Spain
Telephone: +34 91 516 67 00
Fax: +34 91 516 66 53
Web site: http://www.parador.es

State-Owned Company
Incorporated: 1928
Employees: 4,086
Sales: $318 million (2004 est.)
NAIC: 721110 Hotels (Except Casino Hotels) and Motels

Paradores de Turismo de Espana S.A. operates one of the world's most unique collections of hotels. Owned by the Spanish government, Paradores oversees more than 90 hotels established almost exclusively in historical locations, such as former castles, monasteries, fortresses, and the like; some of the group's sites date back as far as the ninth century. Paradores was originally formed in 1928 as a means of rescuing and restoring landmark sites in Spain, as well as helping to establish the country's tourism infrastructure, especially in noncoastal areas. Although the company operates a number of hotels on the country's coasts, Spain's primary tourism zones, the bulk of the company's hotels are situated inland. Whereas most of the company's sites are located in landmark buildings, a number of the hotels in its portfolio are modern hotels. These, however, are generally located on sites of historic interest. Paradores functions as a hotel management company; the majority of its locations are owned by Spain's National Heritage Service. The company also takes charge of the renovation and restoration of the sites, which is paid for through the site's hotel operations. Since the early 2000s, Paradores has been in an extensive restructuring and renovation of its hotels, spending more than EUR 150 million per year. The company also has continued adding new properties, including seven slated to open starting in 2005. In 2004, Paradores's revenues were expected to top EUR 350 million. Ana Isabel Marino Ortega serves as the company's chairman of the board.

Historic Tourism Infrastructure in the 1920s

Paradores de Turismo de Espana stemmed from the Spanish government's earliest efforts to create a tourism infrastucture in Spain at the dawn of the 20th century. Indeed, into the early years of the century, the country—especially its rural regions—offered little in the way of accommodations and support for travelers, particularly for those coming from abroad.

In 1910, the government turned over the job of promoting a homegrown tourism industry to the Marquis de la Vega Inclán. The following year, Vega Inclán launched the Royal Tourism Commission. Among Vega Inclán's objectives was the establishment of tourist markets in Spain's remote—and poor—regions, where industrial development was lacking. The Gredos mountains became the commission's first target, and in 1926, construction began on what was to become the first Parador.

The site was developed as a hunting lodge, featuring a relatively modest 30 rooms. Completed in 1928, the first Parador (which means "inn" in Spanish) received enthusiastic support from an important source: King Alfonso XIII.

The king's enthusiasm led to the decision to expand the parador concept throughout Spain. Soon after the Gredos site's opening, the government founded the Board of Paradores and Inns of Spain in order to develop and expand the Parador project. The new state-controlled body began refining the concept, recognizing the potential to solve another problem facing the government.

Many of Spain's historical sites had fallen into disrepair by the early 20th century. Maintenance and upkeep of the sites proved too costly for private individuals to afford. Other sites had long been abandoned by their owners. The parador concept was then extended to incorporate the renovation and conversion of the country's sites of historical interest into high-quality hotels. In this way, the revenues generated through the hotel operations would pay off the costs of the sites' renovation. Although the majority of the Paradors were developed from existing buildings, a number of sites also were chosen for their natural beauty. New buildings were then constructed on these sites.

The Board of Paradores began selecting sites and launching renovation projects. One of the first of the new Paradors opened in Toledo, in Oropesa, in 1930, followed soon after by the Ubeda site in Jaen. The following year, the parador in Badajoz opened as well.

Extension Under Franco in the 1950s

The Parador project survived the years of the Spanish Civil War and received new interest in the postwar dictatorship established by Francisco Franco. Indeed, under Franco the program was accelerated, and the Paradores network came to be considered as one of the Franco regime's few achievements.

In 1940, Paradores opened its first hotel in the province of Malaga, in Antequera. The Parador San Francisco de Granada opened in 1945, followed by a new hotel in Malaga, in Gibralfaro in 1948. Two years later, Paradores completed the renovation of what some later considered to be the jewel in the Paradores crown: the Hostal de Los Reyes Catolicos in Santiago de Compostela. The 16th-century structure had initially served as a hospice for pilgrims, and the renovated site became one of the most beautiful and unique hotels in Europe.

Franco's interest in the Paradores project enabled the government agency to step up the number of building conversions. The Franco era also represented a period in which Paradores began adding new, modern hotels to its portfolio. Among the company's new openings in the 1950s were the Parador de Pontevedrea, opened in 1955 on the site of a 16th-century castle. Opened in 1956, the Pontevedrea met with strong success, and led to a rapid expansion of the Paradores network. By the end of that year, the agency had opened the Parador de Almagro. A fourth hotel in Malaga opened that year as well.

Through the 1960s and into the 1970s, Paradores kept up its stream of hotel openings. In 1965, the agency opened its four-star Antiguo Hospital de la Ruta Jacobea, originally built as a hospital providing medical care to pilgrims making their way to Santiago do Compstela. Another opening in 1965, of the Parador de Santo Domingo de la Calzada, included the extensive renovation of the surrounding area as well as the opening of a hotel. The following year Paradores opened a new hotel, the Conde de Gondemar, in Baiona in Galicial. That site had been made famous because it was from there that the Pinta was first spotted on its way back from its journey to the New World.

The Paradores program survived another regime change, with the death of Franco in 1975 and the creation of a new democratic government in Spain. One of the oldest of the Paradores hotels opened its doors in 1976, in a fortress at de Cardona that had already been present in the 10th century. Other hotels of this period included the Parador de Chincon, opened in 1982 and built from an Augustinian convent dating back to the 16th century. The renovation of the site, which also had served as a prison and a courthouse over the centuries, took some ten years to complete. A convent served as the setting for another Parador in the 1990s, the Parador de Trujillo, on a site that dated from the 16th century.

Global Reputation in the New Century

The beginning of the 1990s marked a new era for Paradores. In that year, the state-owned agency was converted into a corporation, becoming Paradores de Turismo de Espana S.A. The move signaled the beginning of the end of the group's reputation for bloated payroll and inefficient operations. Paradores now launched a cost-cutting effort, shrinking its payroll in order to bring its average employees per room measurements closer to the industry average. Paradores also launched a refurbishment effort to upgrade a number of its hotels to attract a wealthier clientele.

Company Perspectives:

Our Mission. Paradores achieves its success by fulfilling a mission defined by the following objectives: To develop a quality tourism product that is the image of the Spanish hotel industry abroad, and the instrument of the country's policy on tourism. To facilitate the recovery of historical heritage for tourism, permitting the conservation and maintenance of buildings for the learning and enjoyment of present and future generations. To boost tourism in areas with little tourist or economic activity, and support sustainable development, respecting the environment in those areas in which the establishments are located, and to serve to attract private initiatives. To promote traditional regional cuisine by researching and recovering recipes and cooking methods, and boost the consumption of local quality products. To further knowledge of cultural and natural destinations, thus helping to diversify Spanish tourism offerings and to convey a richer image of Spain to visitors. To develop the above activities as profitably as possible, such that they satisfy the State's financial expectations as the sole shareholder, and the expectations of Spanish society as a whole and the company's employees.

Key Dates:

1919:

The Marquis de la Vega Inclán is appointed to develop a tourism infrastructure in Spain.

1926:

Vega Inclán launches construction on the first Parador hotel in Gredos.

1928:

Gredos Parador opens and wins the support of King Alfonso XIII, leading to the creation of the Board of Paradores and Inns of Spain and the development of new Paradors.

1991:

Paradores de Turismo de Espana S.A. is incorporated as a state-owned company.

2001:

A EUR 165 million refurbishment program is launched.

2005:

The Paradores network tops 90 hotels, with seven new hotels slated to open starting in 2005.

New hotel openings continued through the 1990s, including the opening of a fifth hotel in Malaga, the Parador de Ronda, which began operations in 1994. Paradores also began looking beyond its own portfolio for revenue sources, and began providing management services to hotels owned by private parties. During the 1990s, Paradores started focusing on its catering and restaurant operations. A number of hotels began opening their restaurants to the outside public, and by the mid-2000s, the group's restaurant operations represented a strategic share of its annual sales.

By 2003, there were 88 Paradores in operation, including the Parador de La Palma, on the Canary Islands, opened in 2000. That hotel was followed by the conversion of the Convent of Santo Domingo, a 15th-century structure, and by the opening of two five-star hotels, the Parador of Lerma in the former Ducal Palace, and the Parador of Monforte, in the former Monastery of San Vincente do Pino, both opened in 2003.

At the same time, Paradores carried out a massive EUR 165 million investment program to refurbish and upgrade parts of its now 90-strong portfolio. The company also began construction on another seven hotels, the first of which was slated for inauguration in 2005. Paradores had by then earned a global reputation as the manager of one of the world's most unique hotel portfolios.

Principal Competitors

Hoteles Turisticos Unidos S.A.; Globalia Corporacion Empresarial S.A.; Bouganville Playa Hoteles S.A.; NH Hoteles S.A; Sol Melia S.A.; Riu Hotels S.A.; Viajes Marsans S.A.; Barcelo Hotels and Resorts; Viajes Iberia S.A.; Grupo Serhs S.A.; Occidental Hoteles Management S.A.; Hosteleria Unida S.A.; Hoteles Hesperia S.A.

Further Reading

Anastasi, Paul, "State-Run Hotels 'Wasted Money,' " European, August 8, 1996, p. 21.

Cebrian, Belen, "Paradores amplia sus miras," El Pais, March 14, 2004.

Hayley, Julia, "Spain's Historic Inns Try for Up-Market Tourists," Reuters, May 29, 1995.

"Historic Conversions Going Strong 75 Years On," Traveltrade, October 15, 2003.

"Parador Network Expands," Travel Agent, January 31, 2000, p. 101.

"Paradores sale del letargo," El Pais, November 4, 2001, p. 5.

"Paradores Will Not Be Privatised," Expansion, May 11, 2001, p. 11.

Wilkinson, Isambard, "Paradores Mark 75 Years of B&B with a Flavour of the Real Spain," Daily Telegraph, August 30, 2003.

—M.L. Cohen