Robust improvement in Mediterranean resorts and palpable recovery in Spanish cities, with RevPAR rising in all regions
Average revenue per available room (RevPAR) up by 11 percent, due to price increases
Discounting the impairment in June of one of the Company's properties, Net Profit increased by 133 percent
www.Melia.com revenues grew by 25 percent through September, a key factor in revenue management
Combined effect of the economic upturn in major European markets plus an effective inbound business strategy for Spain and the Mediterranean
17 hotels signed to date in 2015 and a total of 15,150 rooms in the pipeline, the highest number in the history of the Company
Robust hotel opening schedule includes 11 openings in 2015 and 15 openings in 2016
Cuba continues to be a focus for strategic growth, with the Company committed to strengthening its leadership and bonds with the destination
Successful tour of senior management through Asia Pacific, executives announce the addition of hotels in Indonesia and a commitment to grow in Thailand
In the first nine months, Meliá's share price increased by 40.5 percent
The Company is committed to strengthening its balance sheet without adversely affecting the intensity of growth via low capital-intensive formulas
Outlook for 2015 - 2016
The Company expects to end 2015 with double-digit growth in global RevPAR
The Company expects to sustain growth in its main feeder markets for Spain and the Mediterranean through 2016
The Company has developed a strategic plan and identified opportunities for growth through 2018
PALMA DE MALLORCA, Spain, Nov. 5, 2015 (GLOBE NEWSWIRE) -- Meliá Hotels International presented results today for the first nine months of 2015 which reflect a favorable performance in the Mediterranean as well as the continued improvement of city hotels in Spain. The Company recorded a net profit of 52.9 million euros, a 51 percent increase over the same period in 2014, noting that if the "impairment" applied in June on was removed on its property in Puerto Rico the increase in profit would have been 133 percent.
The company highlighted the results of its recurring operations – which doubled those of the same period in 2014, and important factors that included the performance of its hotel business and real estate management. The business achieved an overall increase in average revenues per available room (RevPAR) of 11 percent, 85 percent of which is attributed to price increases, and an improvement in EBITDA and EBITDA margin of 28 percent and 209 basis points, respectively.
Meliá Hotels International's real estate results highlight its goal to reduce debt and improve the value and quality of its portfolio. In February, the company sold 80 percent of six properties to Starwood, maintaining a 20 percent share and the management of the hotels. Without impacting its third quarter results, the Company recently announced the sale of the 875-room resort in Calas de Mallorca in October 2015 for 23 million euros.
"Meliá Hotels International's financial results through September of this year reflect the success behind our competitive strategy and demonstrate that our increase in profitability is not at the expense of the customer's experience," stated Gabriel Escarrer, Vice Chairman and CEO at Meliá Hotels International. "The financial decisions we've made have allowed us to continue to grow and expand, further strengthen our balance sheet, remain innovative in this highly competitive industry, and position ourselves among the leading hotel management companies in the world."
The Company continued its plans for expansion by adding signing on 17 hotels in 2015, primarily in Asia Pacific. Senior executives recently toured the continent, signed contracts for new hotels and announced the company's goal to open approximately 5,000 hotel rooms in Thailand over the next few years. The Company's pipeline has reached a record high and now includes 63 hotels, or 15,150 rooms.
In financial matters, Meliá Hotels International continues to strengthen its balance sheet thanks to positive cash-flow generation, and in the most recent quarter reduced net debt by 29 million euros to 840 million euros. Key financial ratios also continue to improve, with the Company achieving its commitment to maintain the Net Debt/EBITDA ratio below 3.5X and also control its EBITDA/net interest expense ratio thanks to the efforts to reduce financial costs.
Improvement in all regions
The Americas region saw a healthy RevPAR increase of 4.8 percent in owned and leased hotels. That figure would have otherwise been 28.8 percent if Venezuela was excluded from the total, given the impact of the new SIMADI exchange rate that affected the value of the Venezuelan Bolivar.
With an increase of 7.4 percent in RevPar (in dollars), and of all the countries in the region, Mexico performed the best. The 30 percent increase in revenue was a result of Paradisus Cancun's recent conversion to a Paradisus resort, and an estimated $36 million USD EBITDA secured by Paradisus Playa de Carmen. For these properties, revenue prospects look even brighter for 2016.
Hotels in the Dominican Republic increased RevPAR by 5.3 percent thanks to price improvements and overcoming the fall (-80 percent) in demand from the Russian market. Amongst hotels under management, the Company highlights the performance of Meliá Nassau Beach in the Bahamas, which has doubled results after undergoing a renovation and adopting an "all-inclusive" model.
EMEA (+ Premium Europe)
RevPAR in owned and managed hotels in EMEA increased by 10.3 percent, and is attributed for the most part to an increase in average prices. By country:
Italy has seen a record RevPAR growth of 19.7 percent thanks to improvements in all hotels, particularly in Meliá Milano, and an increase in revenue of 48 percent resulting from room renovations and the Universal Exhibition hosted in Milan. Equally successful were ME Milan il Duca, which has had a major impact on the city since its recent opening, and Gran Meliá Rome, which continues to show an upward trend in revenue, with an increase of 13 percent to date.
Germany recorded significant improvements compared to 2014, even though 2015 has not been a strong year for major trade shows. Highlights include hotels such as Innside Wolfsburg (+45 percent in RevPAR), Tryp Munchen, and the company's hotels in Berlin, with RevPAR growth of between 7 percent and 8 percent in all cases.
The United Kingdom's results were boosted by the strength of the pound sterling, and the region saw a marked improvement in RevPAR, including a remarkable increase of 25 percent in ME London, as well as the successful positioning of Innside Manchester, which in just a few months has become a leading hotel in the city and has exceeded initial revenue forecasts for September and October.
France's strong revenue performance is a result of the successful opening of the new Meliá Paris La Défense.
Spain's premium hotels, which include some of Meliá's luxury brand hotels and all of the ME by Meliá and Gran Meliá hotels, improved their RevPAR by nine percent. This is largely due to strategy executed for the luxury market and third quarter results for Spain's luxury resorts, a remarkable 38 percent increase in RevPAR: ME Ibiza (with an average rate of €500 between June and September), Gran Meliá Palacio de Isora (+12 percent), Gran Meliá Don Pepe (+8 percent) and Meliá de Mar (+9 percent). In urban luxury hotels there were also consistent improvements, with a +21 percent RevPAR increase at Gran Meliá Colon, eight percent at Gran Meliá Victoria, six percent at Gran Meliá Fenix, and 11 percent at Meliá Barcelona Sarriá.
The summer season saw a sharp increase in tourism demand, both from the domestic Spanish market and overseas markets, boosted by a number of internal factors including the recovery of the economy and employment in Spain, together with external factors including the falling oil prices, the dollar and pound exchange rates, and the unfortunate instability of competing sun and beach destinations in the Mediterranean and North Africa.
Alongside these favorable market conditions, the 6.4 percent growth in RevPAR in resort hotels in the region is also due to Meliá Hotels Internationals' strong commitment to product innovation; an enhanced customer experience; positioning its hotels as best-in-class in every category; and enriching the sun and beach experience through exceptional food and beverage, leisure, entertainment, shopping, and wellness offerings. The company highlights the evolution of average revenues in newly-renovated hotels such as Meliá Cala Galdana in Menorca (+49 percent), Sol House Aloha in Malaga (+38 percent), Sol Beach Menorca (+27 percent), and Sol House Trinidad (+22 percent), which after renovation and re-branding have seen significant changes in their segmentation, leading to crucial price increases and a higher percentage of early bookings.
The most popular destinations were in the Balearic Islands, with a greater performance in both Ibiza and Mallorca, and where the Company saw marked improvements in segmentation and hotel performance in the Magaluf – Calvià Beach Project.
Spain (City hotels)
The dramatic improvement in the region (+11.2 percent) is attributed to a recovery in all of the different customer segments, both in business and leisure travel, as well as the Company's strategy to boost travel to Spain from the major markets in the EMEA region. The most notable increases were in Madrid, as demand continues to grow both in business and leisure travel, with particularly strong and sustained growth in the group travel segment.
In other Spanish regions, improving sales through www.Melia.com and the optimization of the business strategy have favored a positive performance, along with an intense reform program, brand changes and the renovation of city hotels.
Meliá Hotels International maintains a strong commitment to reduce its net debt, among its most important objectives since 2011. The Company's debt has been reduced by 146.6 million euros compared with December 2014.
In the latest quarter, debt was reduced by 29 million euros, a positive sign given the Company did not sell any assets in the last quarter and the reduction is solely attributed to improvements in cash-flow. The debt reduction also resulted in lower financial expenses (€ -32million) due to a lower gross debt and improved average interest rates when compared with the first nine months of 2014.
Meliá Hotels International has recently announced further disposals of resort hotel assets in the upcoming months, which will continue to be managed by the Company, such as in the joint venture with Starwood, maximizing opportunities in the economic cycle and strengthening the value of its brands, innovation, and excellence as a management company, with no impact on these third quarter results.
Strong growth in Asia
Meliá Hotels International is now present in 41 countries, and its international growth strategy has seen a significant boost in recent years due to strong growth in Asia, both in China and in other major markets in Southeast Asia. In recent years, Meliá Hotels International has nearly quadrupled its portfolio in the region, with 32 hotels currently open or slated to open in the future.
The Company currently has two hotels in China and is preparing to open six additional properties in the next two years. Meliá Hotels International signed its thirteenth hotel in Indonesia, the Innside Bandung, after an impeccable 30 year track record in the country.
The Company has also just announced a strategic alliance with the leading business conglomerate in Thailand, TCC Land assets, and committed to open 3,000 to 5,000 rooms in the country in the coming years.
Outlook for 2015/2016
In summary, Meliá Hotels International has revised its estimate for global RevPAR growth for the year and now foresees double-digit growth, mainly explained by price increases.
With regard to the fourth quarter, forecasts expect a positive performance in the Canary Islands (Mediterranean division) due to the persistent instability in competing destinations, and stronger sales in city hotels in Spain, supported by major conferences in Madrid and Seville, several sports events, and the Spanish Constitution public holidays in December.
With regard to EMEA, the company expects to grow in Europe based on strong demand for European destinations and growth in local transient business. In the Americas, favorable conditions are expected through the end of year, in addition to the positive impact from the opening of Meliá Braco Village in Jamaica in December.
Looking ahead to 2016, Meliá Hotels International bases its projection on analyst consensus and expects sustained growth in the major feeder markets for Spain and the Mediterranean, and also expects a positive performance in America due to the strong positive trends in demand and the growth of the company's business, all combined with three important openings which will boost its positioning in the United States: Meliá Braco Village (Jamaica) in December 2015, INNSIDE New York Nomad in February 2016 and ME Miami in February 2016.
"This year we began to reap the rewards of all of our hard work in previous year. We're focusing on financial rigor and globalization, and it's all being made possible by brands which offer a completely renewed and differentiated value to our new customer segments," stated Gabriel Escarrer, Vice Chairman and CEO at Meliá Hotels International. "From 2016 onwards, our new strategic plan will undoubtedly allow us to maximize these strengths."
For more information about Meliá Hotels International please visit http://www.melia.com/.
About Meliá Hotels International
Founded in 1956 in Palma de Mallorca (Spain), Meliá Hotels International is one of the largest hotel companies worldwide as well as the absolute leader within the Spanish market, with more than 370 hotels (current portfolio and pipeline) throughout more than 40 countries and four continents under the brands: Gran Meliá, Meliá Hotels & Resorts, Paradisus Resorts, ME by Meliá, Innside by Meliá, Tryp by Wyndham and Sol Hotels. The strategic focus on international growth has allowed Meliá Hotels International to be the first Spanish hotel company with presence in key markets such as China, the Arabian Gulf and the US, as well as maintaining its leadership in traditional markets such as Europe, Latin America and the Caribbean. Its high degree of globalization, a diversified business model, the consistent growth plan supported by strategic alliances with major investors and its commitment to responsible tourism are the major strengths of Meliá Hotels International, being the Spanish Hotel leader in Corporate Reputation (Merco Ranking) and one of the most attractive to work worldwide.
CONTACT: Dana Stein MHI@dkcnews.com
Source:Melia Hotels International