Tourism: Family values and families at war

These values are transmitted across families and create close relationships. As Nadal has said, “when personal relationships work, it is easier to do business”. He was speaking about his venture with Meliá Hotels International, a family business that started humbly in Mallorca in 1956 and is now Spain’s leading hotel company - one of Mallorca’s ‘big four’ alongside Barceló, Iberostar and Riu, all of them, like Meliá, a family affair.

The idea to invest in the hotel industry came when Nadal played golf with Gabriel Escarrer Jaume, the CEO of Meliá, a year or so ago. They talked and it became “a natural step” to hook up with a company with people “with whom I have had a very close relationship for many years”. Zel is the brand that has been developed, a project that makes Nadal want “to learn everything related to the sector”. Who better to learn from than a CEO who consistently receives plaudits for his business acumen; and who comes from the Escarrer Meliá family, Gabriel Escarrer Julià, his father, having been the founder way back in the fifties.

Gabriel, the son, was perhaps crucial in laying the foundations for the venture. “Close relationship”, that’s important to Nadal, and it was once said of Gabriel by a leading figure in the Mallorca tourism industry that he is “closer, more normal to deal with, with his feet on the ground, more pragmatic, more visible”.

Closer? More normal? More visible? What was this industry insider referring to? Who was he speaking about by comparison? There’s a family connection, a strong one, but also a connection which appeared to break down. He was speaking about Gabriel’s older brother, Sebastián.

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The recent announcement that Phil McAveety had been appointed CEO of Iberostar Hotels & Resorts reminded me of a subject I once studied closely - that of organisation culture, with particular reference to family businesses. Iberostar has Miguel Fluxà as president. One daughter, Sabina, is vice-president and group CEO. Another daughter, Gloria, is vice-president and chief sustainability officer.

As Iberostar say on their corporate website, “we are one big family”, a value that comes from the very top. Professionalism, qualification and experience are unquestioned, and these attributes will go far in appreciating family dynamics and how these may impact incomers, especially those at the top.

These dynamics are most certainly at play within families, which was why Gabriel Escarrer Julià wanted to ensure an orderly succession. To this end, his sons were made co-vice presidents. In 2012, Sebastián walked away. It was said that he had tired of waiting for his father to retire. Maybe, maybe not. I don’t know that there ever was a clear explanation as to why he went. But it was implied that the father had greater faith in the younger son. Having remained on the board of directors, Sebastián resigned three years ago. A family rupture consummated, so it was reported.

Whatever issues there may have been, they haven’t hindered the reputation of Meliá or the company’s growth. Family matters may not have been resolved satisfactorily, but the professionalism of understanding these dynamics has overcome them. Meliá are intact, so are Iberostar, Barceló, Riu and other smaller family businesses in Mallorca’s tourism industry. But there is one that is not, and that is Globalia.

Airline, travel agency/tour operator, hotels, airport handling, this diverse company has been falling apart in front of our eyes over recent months and indeed years. In November last year, the business that was the origin of Juan José (Pepe) Hidalgo’s empire, Viajes Halcón, was no longer owned by the family. A stake in the Avoris Corporation (50.5% Barceló, 49.5% Globalia) was acquired for a nominal one euro by Barceló. Because of the origin, this was way more symbolic than the protracted process that will see Iberia take over Air Europa. Meanwhile, the Be Live Hotels are being sold off. Groundforce handling remains - for now.

Financial problems have played a big part, but it has been said that Pepe wanted to sell off most of the businesses. There were three children, and they had different views. Sales would ensure that they got inheritances and could go the ways they wished to. Perhaps so, in which case the family dynamics have led to an unravelling, a moral of the story being that some families maybe have a better hold on these dynamics than others and which can allow progress despite apparent rupture. This, and the closeness, as Rafa Nadal understands.