On Friday, following the publication of its 9M 2024 results, Valamar Riviera also disclosed its business strategy until 2026. The strategy is aimed at new, sustainable double-digit growth and business development. In this overview, we bring you all the highlights of the strategy.
Firstly, a bit of a historical background is needed. Valamar marked the years from the pandemic, i.e. 2020 until 2023 as a period of crisis, recovery, and stabilization, while it touts the period from 2024 – 2026 as a period of continued sustainable business development.
To achieve this, the Group has decreased its net debt to EBITDA from 3x to 2x in 2023, preparing for new investments. New investment projects have been prepared to enhance the quality and the value of the portfolio. The focus remains on developing new product and service concepts, growing direct sales, improving HR management policies, and promoting sustainable development.
To this end, Valamar has invested over EUR 1bn thus far, making it the largest investor in the Croatian tourism. In fact, only in the 2023 – 2026 period, ongoing projects will end up costing app. EUR 450m.
Valamar Riviera investments breakdown (2023 – 2026, EURm)
Source: Valamar Riviera, InterCapital Research
As we can see, the development includes 6 larger-scale projects, EUR 61m in investment maintenance, as well as almost EUR 100m of investments into other projects.
In strategy terms, besides investments, Valamar plans on developing its products, and through said investments, also achieving strong double-digit business growth, with enhancements to quality and the expansion of the Group’s portfolio. Two other pillars are named, i.e. employees and sustainability. In terms of employees, Valamar aims to remain the best employer in tourism, as well as continuing to promote additional benefits for its employees.
Meanwhile, sustainability is the name of the game, and Valamar aims to be recognized as a leader I the socially responsible and sustainability business, with the focus on localization, reduction of CO2 emissions, and initiatives to improve quality of life in the destinations where it operates.
This is also reflected through its strategic initiatives, which are divided in the following manner:
- Focus on investments and growth
- Branding and product development
- Care for employees
- Focus on guests
- Distribution, sales and marketing
- Sustainability and social responsibility
With these things combined, Valamar aims to achieve double-digit growth rates, with an EBITDA of EUR 150m, with a stable net debt and a net debt to EBITDA of 2x. They’re also aiming for fundamental shareholder value of EUR 1bn, and a dividend yield of 4%, as well as the continuation of business plans with its investor partners, and finally, sustainable growth for their guests, employees, destinations and investors.
In terms of branding and product development, Valamar aims to by 2026, to increase the % of branded hotels and campsites from 51% to 74%, with 21 accommodation properties or 4,990 “new” accommodation units. This also means that an increase in the occupancy rates and the ARRs can be expected, across both the hotel and the camping portfolio. Valamar also aims to increase the number of guests, while diversifying the portfolio towards the pre-and post-season. In fact, in 2023, 57% of revenue was achieved in the main tourist season, while 43% was achieved in the pre-and post-season. By 2026, Valamar aims to increase its revenue by 53% and make the spread between the main season and the pre-and post-season even, i.e. 50% each.
The entire, detailed Strategy can be accessed here.
