May 2017, Dubai - After announcing the addition of eight hotels in Cuba to enhance the quality of inland tourism in the country, the company has now signed 15 hotels worldwide
The company aims to improve returns to shareholders by increasing the pay-out ratio on 2016 results to 30%
The 'Easter effect' penalises results in the first quarter compared to the previous year, and will benefit results in the second quarter
- Total revenues increased by 5.4%
- Global RevPAR grew by 8.3%, of which 83% can be explained by price increases
- Growth continues in Spain, where hotels saw a 12.5% average increase in RevPAR over the period
- Company EBITDA increased by 2.9%
- Including April, melia.com increased sales by 20% over the previous year
- Slight increase in debt compared to December 2016, now standing at €622 M
- The Net Debt/EBITDA target ratio is maintained for the period between 2 and 2.5X
- Reduction in bank financing of €6.6 M (-44.4%)
- Reduction of average interest rate to 3.4%
- To date, the company has signed 15 new hotels, all of them under management contracts
- Meliá announced the signing of 8 new hotels in Cuba, to open under its Meliá, Sol by Meliá, and INNSIDE by Meliá brands on January 1, 2018
- The company's pipeline stands at 65 hotels with 17,000 rooms at March 31
- Two new hotels opened in Asia in the 1st quarter: Sol Bali Legian and Meliá Shanghai Hongqiao
- In Spain, the company opened two new hotels and signed two others over the period
- The forecasts for the year are generally positive
- RevPAR growth is estimated at a medium to high single digit
- The company reinforces its commitment to the growth, renovation and repositioning of hotels in Spain
- Excellent performance and outlook for the Calviá Beach (Magaluf) project which adds new MICE facilities in the destination, and the new Palau de Congress Convention Centre and Palma Bay Hotel in Mallorca.
Gabriel Escarrer Jaume, Vice President and Chief Executive Officer of Meliá Hotels International said: 'Meliá recorded a notable increase in its main performance indicator, RevPAR, which improved by 8.3% in the quarter, the 27th consecutive quarter of growth. The performance in Spain (+12.5%) in the weakest quarter of the year points towards a positive high season, which Meliá will continue to use to strengthen its products through extensive investments in the renovation and repositioning of hotels. The company also continues to move forward with expansion, adding 15 new hotels in the year to date, with a special focus on Cuba where we have just signed 8 new hotels, and Asia, where we have opened two new hotels this year in China (Shanghai and Zhengzhou) and we will open three more in Indonesia.'
Meliá Hotels International earned €20.4 million in the first quarter of 2017, 8% less than in the same period of 2016. Revenues (€420.3 M) increased by 5% and EBITDA improved by 3%. The most positive figure was again generated by the hotel business, whose key performance indicator, Revenue Per Available Room (RevPAR) increased by a healthy 8.3%, while that of Spain - considering both resorts and city hotels - improved by an excellent 12.5%.
The results for the first quarter are influenced by the 'Easter effect', which, as Easter falls in April this year, will have a positive impact in the second quarter. In spite of this, the revenues of owned and leased hotels plus the fees paid by managed hotels increased by €28.5 million compared to the same period in 2016.
The company continues to achieve strong results from its digitalization strategy, where its most important direct sales channel, melia.com, increased sales in the quarter by 8.1%. Including April, the sales increase rises to 20% due the “Easter effect”.
Financial results saw a slight increase in debt, as expected in the first quarter, which remains at a comfortable ratio of 2 to 2.5X EBITDA. This was largely due to the investment in the master plan being implemented in the Dominican Republic, and the purchase of the Paradisus Los Cabos hotel. Financial management achieved a further reduction in financial costs, with an average interest rate of 3.4%, and was negatively affected by exchange rate differences.
The Company announced an increase in shareholders' dividends, raising the pay-out to 30% in 2016, vs. 25% in 2015.
Results by region
Excellent performance in all destinations in Mexico (+4.9% RevPAR), a temporary slowdown in Punta Cana, and a strong performance from new hotels in New York, Jamaica and Miami.
Partial opening of the new Paradisus Los Cabos in the first quarter, and four new hotels expected to open in 2017 in the USA, Colombia and Peru.
Recovery in Punta Cana in the second quarter and a continued robust performance in Mexico.
• Excellent recovery of hotels in Paris (+8.6% RevPAR) mainly due to improved occupancy
• Positive results in Germany (+19.5% despite the complex comparison due to an excellent 2016 in the MICE segment)
• Italy (+3.8%) performs well despite the absence of congresses held in 2016, and the ME Milan Il Duca continues with its excellent results and positioning
• In the UK, the company saw a consistent improvement in all hotels
• In Spain, Gran Meliá hotels in the region were negatively affected by ongoing renovation in some hotels and by the 'Easter effect'
• Signed hotels: INNSIDE Lisbon and Meliá Algarve Montegordo, both in Portugal
• Open hotels: results include the 3 recently-opened hotels; INNSIDE Aachen, INNSIDE Leipzig and INNSIDE Frankfurt
The trend is positive in all markets, with a certain slowdown in Germany due to the smaller number of large trade fairs. An excellent second quarter is expected in Premium hotels in Spain. In 2017 six new hotels will open in the region.
Excellent performance in the Canary Islands, in spite of the “Easter effect”, due to high demand from the British, Scandinavian and German markets, and despite the reforms in the Meliá Gorriones and Meliá Salinas. Strong performance (+13.5% RevPAR) in Cape Verde hotels (currently with more than 2,000 rooms).
Melia.com increased sales in the first quarter by 36%.
In the first quarter, one new hotel was signed in Estepona (Malaga).
Excellent prospects in the Spanish peninsula and Balearic Islands thanks to a positive Easter season, and a strong increase (double digit) of bookings for the summer in all areas (Balearic Islands, Canary Islands, and Spanish coast). Sales through melia.com for the summer have increased by a remarkable 42%.
+5.5% RevPAR growth in eastern Spain, +10% in Madrid, +13% in the south (+45% in ski resort hotels) and +2.1% in the north of the country, affected by the comparison with the excellent year for sports events, trade fairs and other events in 2016.
Significant improvement in the MICE and Groups segment, with the Mobile World Congress in Barcelona, Cevisama in Valencia, FITUR and other events in Madrid. Positive season in ski resorts and positive impact of the renovated Meliá Lebreros, in Seville.
• To date, the TRYP Cartagena Hotel has been signed
• Open hotels: Meliá Palma Bay and Palau de Congressos in Palma, and Tryp Santa Ponsa, all of them in Mallorca
• Disaffiliated hotels: three hotels with a negative contribution to results and one managed hotel with a total of 758 rooms
Forecasts for the second quarter are favourable, affected by the Easter week falling in April, which will generate a positive impact in urban 'bleisure' hotels (business + leisure). Easter caused the MICE segment to slow down in April, an effect that will be offset by a greater number of events and congresses in May and June.
Especially positive in Havana, particularly the Meliá Cohiba and Meliá Habana, where hotels increased rates by up to 30%.
Significant improvement in direct sales (+18.9%)
The company announced the signature in May of 931 new rooms in eight hotels in Cienfuegos, Trinidad and Camagüey, to promote quality tourism in the Cuban interior.
The company will assume responsibility for the hotels on 1 November 2017, starting a management transition process that must be completed by 1 January 2018.
The neutral effect of the change of President in the United States has enabled continued growth in the number of travellers from the US, as well as the consolidation of direct air connections, notably the opening of sales offices by American Airlines and Jet Blue in Havana, for example.
Improvement of revenues from fees thanks mainly to the addition of new hotels opened in 2016.
Robust performance in China thanks to the solidity of the business and the quality of the products that Meliá operates in the country, and also in Vietnam, due to the persistent growth of Vietnam as a tourist destination. Good performance by hotels in Indonesia, especially in resorts.
• Signed Hotels: a 305-room hotel in Vietnam (Melia Cam Ranh). The region has 30% of all the hotels in the company's global pipeline
• Open hotels: in the first quarter, Meliá opened two hotels in the region - Sol House Bali Legian and Meliá Shanghai Hongqiao
Newly-opened hotels (Meliá Yangon, Meliá Shanghai Hongqiao, Meliá Makassar, Sol Beach House Phu Quoc and Sol House Bali Legian) are expected to continue to increase their market penetration at the highest possible speed.
Meliá continues to position itself as one of the best companies to work for in Spain, where last year it achieved first position in the tourist industry in the MERCO people ranking, and was chosen as the most attractive company in the industry to work for. In 2017, the company is a finalist in the Randstad Awards for the companies which are most attractive to work for.