Meliá Hotels International Announces Nine-month 2017 Results
Meliá Hotels International increases profits by 23.3% and improves margins and sales efficiency, consolidating a business model focused on hotel management
PALMA DE MALLORCA -- The business model based on managed hotels has seen an increase in EBITDA of 9.2%, thanks to an increase in fee revenues. The situation in Catalonia, the Venezuelan Bolivar exchange rate, the hurricane in Puerto Rico and the closure of several airlines in Europe had a negative impact on performance.
Business performance:
- Five per cent increase in total revenues thanks to 6.1 per cent growth in Revenues Per Available Room (RevPAR) as a result of price increases
- 7.8 per cent increase in EBITDA and a 42 basis point increase in EBITDA margins, excluding capital gains
- Melia.com continues to grow, with sales up by 17.9 per cent for the period
- Optimisation of the digital distribution strategy developed by IDISO
- Outstanding performance of the Gran Meliá Palacio delos Duques resort in Madrid (voted Best Hotel in Europe2017)
Expansion and management model:
- Meliá Hotels International will sign more than 30 new hotels during the remainder of 2017, having already signed 23 new hotels in the first nine months of the year and with four more to be signed in Asia in October. The company has recently opened the Meliá Iguazu in Argentina and is preparing the opening of the Meliá Serengeti Lodge, in Tanzania, and ME Sitges, in Spain, later this year
- The pipeline (hotel agreements signed and in the process of opening) currently boasts a global offering of over 17,000 rooms in 70 hotels, representing 18 per cent of the current portfolio. 93 per cent of these hotels will be added to the Meliá Hotels International portfolio under management agreements
- Meliá Hotels International has obtained more than 70 international awards and nominations to date for its hotels and their service attributes in 2017
Financial management:
- Slight increase of €10.2 million in debt in the third quarter, bringing the total debt to €584.1 million. Meliá Hotels International makes a commitment to maintain Net Debt/EBITDA ratio at between 2 to 2.5 in the medium term, with the company expecting to end 2017 below a ratio of two
- Increase in financial expenses due to negative exchange rate differences, despite the reduction in the average interest rate from 3.6 per cent to 3.3 per cent
Forecasts for the end of the year:
- The Company expects a significant contribution in the fourth quarter of 2017 and throughout 2018 from hotels currently in the opening process and from new additions to the portfolio
- Meliá Hotels International expects to achieve results in line with the market consensus, although it assumes that unexpected events such as hurricanes in the Caribbean, the evolution of the United States Dollar against the Euro, and uncertainty in Catalonia (where Meliá Hotels International operates 12 hotels) will have an impact on operations
Gabriel Escarrer, Executive Vice President and Chief Executive Officer, Meliá Hotels International, commented: "The first nine months of 2017 confirm the strength of the company despite a less favourable business environment. Despite these challenges, the positive results in urban and resort hotels in Spain, excellent performance of major projects such as the Gran Meliá Palacio de los Duques in Madrid and ME London, and the trends in sales driven by the company's digital strength make us optimistic about the outlook."
Meliá Hotels International presents its results for the first nine months of the year, reflecting the achievements of the brand strategy, product repositioning and sales strength. The results showcase the brand's growth potential in the third quarter in spite of the impact of global events such as hurricanes, political tensions in Catalonia, unfavourable exchange rates between the United States Dollar and Euro as well as the Venezuelan Bolivar.
Meliá Hotels International generated €1,458.2 million in revenue up to September, five per cent more than in the same period in 2016. Net Profit increased by 23.3 per cent over the same period in the previous year, with an improvement in EBITDA of 7.8 per cent excluding capital gains. The Company highlights the improvement of 42 basis points in the EBITDA margin thanks to cost optimisation and actions to improve sales efficiency, an area on which the Company will continue to focus.
Financial results show that the Net Debt/EBITDA ratio remained stable between 2 and two and 2.5 after a slight increase of €10.2 million in debt in the third quarter. Results were also affected by the negative impact of fluctuations in the United States Dollar to Euro exchange rate. The Company offset this by reducing average interest rates to three point three per cent and extending amortisation periods.
The hotel business remained the most important driver of company growth in a quarter in which there were no capital gains from asset sales. RevPAR increased by six point one per cent on a global level, attributed entirely to price increases. There were significant increases in Spain, where overall RevPAR increased by 12.3 per cent after an increase of eight point one per cent in resort hotels and 17.8 per cent in city hotels.
Meliá Hotels International is pleased with the nine point two per cent increase in EBITDA in managed hotels, making them a fundamental driver of value creation for the company in the medium term while also ensuring profitability for hotel owners and partners.
About Melia Hotels International
Founded in 1956 in Palma de Mallorca (Spain), Meliá Hotels International has more than 400 hotels open or in the process of opening in more than 40 countries, and a portfolio of nine brands: Gran Meliá Hotels & Resorts, ME by Meliá, The Meliá Collection, Paradisus by Meliá, Meliá Hotels & Resorts, ZEL, INNSiDE by Meliá, Sol by Meliá and Affiliated by Meliá. The Company is one of the world's leading hotel chains in the leisure segment and its experience in this area has allowed it to consolidate itself in the growing market of urban hotels inspired by leisure. Its commitment to responsible tourism has led it to be recognised as the most sustainable European hotel company according to S&P Global's Sustainability Yearbook 2024, as well as being a "Top Employer 2024" brand in Spain, the Dominican Republic, Mexico, Italy, Germany, France and Vietnam. Meliá Hotels International is also part of the IBEX 35. For more information, please visit www.meliahotelsinternational.com
