• Ebitda (operating profit) up 9.3% to €201.3 million
• The company reports an excellent summer season, with growth in RevPAR (+4,8%) exceeding the industry average
• Sales at melia.com increased by 25%
• Meliá Hotels International continues to see strong portfolio growth and will continue to sign a hotel on average every two weeks in 2013
• The company maintains a positive outlook for 2014 in the different markets, reinforced by the data from the recent World Travel Market in London
• Gabriel Escarrer, Vice President and Meliá CEO: “Company results were affected by extraordinary financial items in the period but which in no way affect company strategy nor its ability to generate constant improvements in the results of the hotel busines
Meliá Hotels International presented results today for the first nine months of the year. In the positive context of international tourism, the hotel company closed the third quarter with an Ebita of €201.3 million (+ 9.3% compared to the same period of 2012) and a net profit of €25.4 million (-33.6%).
The different evolution of Operating Profit and Net Profit are explained by financial results (impacted by the accounting of the Convertible Bond and reduced capital gains with respect to the same period in the previous year) which, together with the hyperinflation in Venezuela, partially eclipse the improvement in the business which saw growth in RevPAR of 4.8%, exceeding the industry average.
In the financial aspect, Meliá Hotels International reports an uneven performance. On one hand, the progress in the restructuring of debt to extend maturity periods and, in particular, the amortisation in August of all the syndicated loans subject to covenants for €312 million, show the direction the company has defined.
On the other hand, the financial results penalised Attributable Net Profit due to the accounting of financial costs of €20 million linked to the convertible bond issue (including €12.7 million for the valuation of convertible bond option linked to the evolution of Meliá shares carried out in 2013), and the greater capital gains in 2012 (€7.8 million) and hyperinflation in Venezuela (€3.6 million).
Results by divisions
RevPar grew by 11%, with best performance in Mexico (+16.4%) and Dominican Republic (+9%)
The company managed to offset the natural slow-down in the market in the third quarter (low season) thanks to a flexible revenue and cost strategy based on improving the value proposition. The advance is explained by the positive growth of outbound markets in USA and Canada, mainly, and in Latin American countries such as Colombia, Chile, Peru, Brazil and Argentina.
Excellent performance of Paradisus Playa del Carmen (La Perla and La Esmeralda), in México; and Paradisus Punta Cana, Paradisus Palma Real and Meliá Caribe Tropical, in Dominican Republic.
EMEA & Premium Europe
The growth of RevPar (+11.4%) is explained mainly by the improvement in price (+10.8%).
The Division benefited from the new reporting perimeter, as it now includes the Gran Meliá hotels in Europe. Gran Meliá Rome, after first full year of operation, has achieved excellent results, with the highest average rate of the company. Meliá also highlights the good performance of luxury hotels such as ME London, Gran Meliá Don Pepe (Marbella), Gran Meliá Victoria (Mallorca) and Melia de Mar (Mallorca).
Germany slightly corrects the negative trend in RevPAR(-1.8%) due to the absence of events (biannual trade fairs), France (+4.6%) maintains good growth and the UK reduced RevPar by 9% compared to 2012 (London Olympics).
As for ME by Meliá hotels in Europe, the growth in RevPar (+24%) is due mainly to the consolidation of the ME London after nine months of operation. The hotel has achieved three major awards at the European Hospitality Awards (including Best Hotel of the Year) confirming its positive positioning in the market.
The excellent tourist season in the third quarter explains the growth in RevPAR (+4.3%), supported by an improvement of 4.8% in occupancy. Occupancy (80%) exceeded the industry average for Spain (70%), which reported a strong season overall. As well as the Balearic Islands, Malaga and Alicante, there was good growth on the Spanish mainland coast and in the Canary Islands in September.
There was growth in outbound markets such as the UK and northern and eastern European countries, while domestic travel decreased due to the economic crisis and the reduction of domestic flights, although the greater exposure to direct sales channels (melia.com sold 22% more) mitigated the impact of lower sales in Spain.
With respect to the Meliá Hotels International, the Calviá Beach project to reposition and regenerate Magaluf (Mallorca) increased revenue by 32% in its second season, highlighting the evolution of the Sol Katmandu Park & Resort.
Innovation in product and guest experience is the main theme of the project. This summer Sol Wave House became the first Tweet Experience Hotel in the world, aiming to attract a new customer profile highly connected to social networks. The company has also just announced the first hotel for the cutting-edge ME by Meliá brand in Mallorca (rebrandingthe Beach House Hotel) which, together with the adjacent Nikki Beach Mallorca, is completely transforming this previously degraded resort area.
The fall in RevPar (-1.5%) in the first nine months of the year is explained mainly by the fall in prices (-1.3%), although the third quarter increased by 2.5%, which helps offset results together with the positive season in the company ski resort hotels.
The Company benefits from its location in cities with major leisure component, with best performance. Thanks to its expertise in the vacational segment, the company has adapted its product to the urban resort demand. Best destinations were Barcelona (+2.1% RevPAR), Palma, Sitges, Alicante and Bilbao.
Smaller cities continue remain weak, along with Madrid, which reduced RevPar by 11.6% due to the absence of trade fairs and congresses, the drastic reduction in low-cost flights and the loss of 4.5 million passengers in Madrid airport.
In 2013, Meliá Hotels International (melia.com) has maintained its ambitious expansion plans, signing on average more than a hotel every two weeks, with 19 hotels in total (America: 9; EMEA: 6; Spain: 2; Asia: 2)
In the current pipeline (53 hotels, 15,000 rooms), approximately half of the hotels are located in emerging markets and, in line with company strategy to promote management agreements, 100% will be added under a management contract, or, to a lesser degree, lease agreements.
The expansion strategy also promotes the upscale and premium segments. The company has just announced expansion of its ME by Meliá brand, with the opening of the ME Dubai, ME Mallorca and ME Ibiza (the last two through rebranding).
During 2013, the company has opened the hotels Innside Madrid Génova, Innside Madrid Luchana (both in Spain), Meliá Atlántico Isla Canela (Huelva, Spain), Meliá Capri (Italy), Innside Düsseldorf Hafen (Germany), TRYP Murcia Rincón de Pepe (Murcia, Spain), the Residence of Real Madrid football club and the Paradisus Palma Real convention center.
Gabriel Escarrer stated during the recent World Travel Market in London that “over the next few months, we will announce new hotels in the English speaking Caribbean or in some islands of the Indian Ocean where we never dreamt we would ever be”. For the Vice President and Meliá Hotels International CEO,“this raises our profile as a leading resort hotel company to be present in the best and most select holiday destinations in the world”.
The company hopes for positive growth in Latin America and the Caribbean in the first quarter of 2014, coinciding with the regional high season, based on the bookings made so far and on the growth of the group segment.
With regard to the Mediterranean and the Canary Islands, the British market is expected to maintain its positive rhythm, according to data collected at the World Travel Market, while the situation in North Africa will have a positive impact on the Canary Islands in winter.
The European cities, mainly Berlin, London and Paris, will also experience improvement, while in Spain, the fall in the urban hotel business appears to have reached rock bottom and improvements could be registered in cities such as Barcelona. Overall, the company is optimistic and points again to growth of an average digit for RevPAR in 2014.