• NH Hotel Group signs a memorandum of understanding with HNA for the joint management of a significant portfolio of HNA and third-party hotels in the middle and upper-middle segments of the Chinese market in the years to come
  • The new company, to be named HNA-NH Hotel Management Joint Venture Company, would initially assume management of six of the Chinese group's hotels, encompassing 1,312 rooms, which are operated under various HNA trademarks
  • The new company will design a prototype hotel for tackling growth in the market under the NH brand and will define a strategic plan to boost its development
  • Both companies would benefit from NH's management, reward and booking systems as well as its brand, while leveraging HNA's know-how and local contacts to identify the best locations and professionals within the Group in the Chinese market

As part of the bilateral trade summit underway between Spain and China with a view to bolstering commercial ties between the two countries, Spanish President Mariano Rajoy and his Chinese counterpart Li Keqiang presided over execution of the strategic memorandum of understanding between NH Hotel Group and HNA in Beijing, marking a significant step ahead in the framework agreement reached by the two companies in early 2013.

The two parties have the intention of setting up a jointly-owned company to be called HNA-NH Hotel Management Joint Venture Company and headquartered in Beijing. The joint venture's corporate purpose would be to build a portfolio of hotel management contracts in the middle and upper-middle segments in the territories of China, Hong Kong, Taiwan and Macao, owned by HNA or by third parties. This business approach fits with NH Hotel Group's strategy of pursuing growth using capital-light formulae such as the management of hotels owned by third parties.

Initially, the new company would take over the management of six of the HNA group's hotels. These establishments are located in Beijing, Haikou, Sanya and Tianjin and between them encompass 1,312 rooms.

The two companies also plan on designing a prototype hotel for operating in the Chinese market under the NH trademark which would serve as the model for spurring the joint company's business development. The parties would also formulate a strategic business plan for the years to come, laying out the joint venture's roadmap and boosting its growth.

Federico González Tejera, CEO of NH Hotel Group, said "I´m fully convinced of the positive impact and benefits of leveraging the synergies between the two companies, such as the chance for NH to get its feet wet in one of the world's biggest markets without getting distracted from its current overriding strategic targets". Indeed, the transaction would be compatible with the five-year business plan on which NH continues to make very solid progress: the company would put in place a standalone team to carry out the Chinese venture's business activities, thereby enabling the rest of its professionals to continue to focus unwaveringly on delivery of the company's priority targets.

 The joint venture, which would be 49% and 51%-owned by NH and HNA, respectively, would be incorporated with initial share capital of USD20 million, out of which NH would provide USD4.9 million at the time of incorporation. If necessary, and so agreed, NH would make a second capital injection, of the exact same amount, in two years' time.

 The joint venture's incorporation would be subject to receipt of the required authorisations and permits from the Chinese authorities.

 As part of the negotiations concluded in early 2013, the two companies signed a framework strategic agreement which, on the one hand, saw HNA take an equity interest in NH Hotel Group, investing €234 million to become NH Hotel Group's largest shareholder, and, on the other, marked the start of talks for the creation of the joint venture that would enable NH Hotel Group's entry into the Chinese market. Lastly, the framework agreement called for the creation of a commercial alliance for fostering cross-selling opportunities; satisfactory progress is being made on this last front, with NH's hotels being marketed to HNA's passengers as recommended establishments.

About NH Hotel Group, part of Minor Hotels

NH Hotel Group, part of Minor Hotels, is an established multinational hotel operator and a benchmark urban hotel chain in Europe and the Americas, where it runs over 350 hotels. Since 2019, it has been working with Minor Hotels on integrating all of its hotel trademarks under a single corporate umbrella brand with a presence in over 50 countries worldwide. Together they have articulated a portfolio of more than 500 hotels operating under eight brands – Anantara, Avani, Elewana, Oaks, NH Hotels, NH Collection, nhow and Tivoli – which between them provide a broad and diverse spectrum of hotel solutions in touch with the needs and desires of today's global travellers.

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