Tui has completed the sale of its 49% stake in the Riu family hotel properties in a deal valued at €670 million.
The sale, announced in May, will not affect the 50:50 joint venture between Tui and RIU Hotels and Resorts which operates and markets 100 RIU properties.
Chief executive Fritz Joussen said the sale “sharpens Tui’s long-standing successful partnership with RIU and the Riu family and creates the basis for profitability and new growth after the pandemic.
“The transaction enables us to further implement our ‘asset-right’ strategy with a clear focus on managing brand, operations, customer experience and distribution – decoupling growth in hotels from investments and hotel management and the holiday experience from property ownership.“
The portfolio of 21 properties, comprising 19 existing hotels and two in development, is valued at €1.5 billion.
Tui confirmed receipt of an initial payment of €541 million, with an additional €130 million due by 2023.
In a statement the group noted: “The transaction has been closed in a continued difficult market environment. As announced previously, the proceeds will be used to reduce the group’s debt.”
The deal is the latest in a series by the group as Tui divests cruise ships and property assets to focus on its operations.
Tui noted it “intends to grow primarily with international hotel brands Tui Blue, RIU, Robinson, Tui Magic Life and the management of these hotels, [and] in doing so tie up less capital in land and its own real estate”.
The group initiated its ‘asset right’ strategy in December 2019 before the onset of the pandemic.