Europe Insurance and Lama Hotels (B): The Chief Executive Officer of Lama Hotels

Hoteles Lama is a family-owned hotel chain founded by a builder who migrated from the countryside to the city, where he remained and ultimately started the chain in 1962, which has now grown to four hotels. The city is the second largest in the country and draws many tourists. Two of the hotels are three-star and the other two are four-star. Lama's construction group was profitable for years, achieving relatively standard 15% margins, and in some cases 20% margins, for the works it carried out. Things began to change a few years ago when the housing boom was followed by a deep crisis. At present, the family group's growth path depends on its hotels, all of which it built and fully owns, though none of which are located in the city's historic district. It is a standard hotel chain with good quality facilities in coastal areas, with an aim to establish its presence in major urban centers. Lama's eldest son is responsible for the active management of the hotels and construction group. A year and a half later, the CEO received news that this same insurance firm was considering renting a building in the city's historic district for hotel use. It was a landmark property of the city, known for housing the insurance firm's main agency on the ground floor and its large rooftop sign, which became a part of the urban landscape. The CEO consulted his father and both agreed that they could not pass on this opportunity to seize what could become the flagship property of Hoteles Lama.