The Group Strengthens its Balance Sheet after Reducing Net Debt by €226 Million

Melia ended the year with the lowest debt ratio in its history

Business Performance:

  • Net Profits are up +180%
  • Global RevPAR: +14% (80% attributable to price improvements)
  • com has increased sales by over 30%
  • Further improvement in the positioning and contribution of core assets
  • Successful assets rebranding and repositioning strategy
  • Ebitdar and Ebitda margins’ improvement

Financial Management

  • Debt reduced by €226 million
  • Net debt/EBITDA ratio at historically low multiple (1.9 X)
  • Significant reduction in financial expenses, savings of €28million compared to 2015
  • Cost of debt below 3.5%

Expansion Strategy

  • 17 hotels launched in 2016
  • 23 scheduled new openings for 2017
  • 3 scheduled new Spanish openings for 2017, committing to maintaining leadership in market
  • Mediterranean, Caribbean and Asia Pacific will lead growth

Outlook 2017

  • On a global level, Meliá expects to increase RevPAR by a medium to high single digit
  • Results remain robust in resorts and in hotels in cities popular with tourists (bleisure)
  • The reopening of important hotels after renovation and/or re-branding, such as Paradisus Los Cabos or ME Cancun among others, will increase their contribution to revenues and brand value

 Gabriel Escarrer Jaume, Vice Chairman and CEO of Meliá Hotels International: “The 2016 results once again show a strong performance from the hotel business as a result of a positive international travel environment, especially in resorts, and our successful strategy over recent years, laying the groundwork for more profitable and qualitative growth in the coming years. Together with a significantly healthier balance sheet, and a business model increasingly based on international growth and management agreements, this places us in an unbeatable position to face the significant geopolitical, economic, social and technological challenges that affect the industry on a global level.”

London, 14 March 2017 –In 2016, Melia Hotels International earned a Net Profit of €100.7 million, an improvement of 180% in comparison to 2015. Excluding the effect of capital gains, company EBITDA improved by 14%, and revenues reached €1,798.4 million (+7%). Total revenues including managed hotels and asset sales reached €2,882.4 million.

The improvement in EBITDA margins of almost 100 basis points is very positive, it has been achieved while still meeting the growth and repositioning objectives which are fundamental to company strategy. Financial results also saw 49% improvement, attributable both to consistent reductions of company debt (down by €226 million since December 2015) and a reduction in the average interest rate of 90 basis points, leading to financial savings of over €28 million.

RevPAR (Revenue Per Available Room), the figure that best indicates the evolution of the hotel business, achieved levels above those of the peak of the previous cycle in 2007 in all regions. The performance of the hotel business demonstrates that it is supported by a consistent strategy, in which Meliá believes the key factors are:

  • Digital transformation: Melia.com has become a key sales channel for improving results, growing by 30% in 2016 to reach €430 million in sales. The new MeliaPro online channel for professional clients (B2B) also registered spectacular growth of 71%, and the company also highlights the growing contribution of the MeliaRewards loyalty programme, with 44% more members, 58% more stays, and 43% more revenues compared to 2015. In general, Meliá remains highly committed to digitalisation and continues to generate consistent improvements in the tools and applications used by the company

Revenues culture: Revenue Management strategy combined with intense investments in hotel renovation and repositioning has allowed an improvement in prices, responsible for 80% of the improvement in global RevPAR.As a result, Meliá has led the international hotel industry in RevPAR growth, with 27 consecutive quarters of increases and an average annual growth rate of 9.75% ever since the second quarter of 2010

Selective and qualitative international growth: Along with more than 30 new hotels signed throughout 2016, Meliá also opened 17 new hotels in 10 countries. In 2017, this figure will rise to 23 new hotels in at least 15 countries. The expansion strategy prioritises the safest and most dynamic resort destinations, together with cities with a large “bleisure” component (attractive to both business and leisure travellers)

Powerful, differentiated brands: As a hospitality company, Meliá is facing major challenges in the industry, for example, the increase inbusiness models such asholiday rental homes,with a portfolio of powerful and well-positioned brands, and remains committed to improving brands, quality and service. In 2016, the company carried out an exhaustive analysis and repositioning of its brand architecture and service culture, generating greater visibility and definition of the experience they provide to guests

The Meliá Hotels International Real Estate strategy pursues a dual objective. Firstly, to enhance company assets through asset rotation, by taking advantage of the evolution of the real estate cycle. Secondly, to strengthen its Joint Venture model as a vehicle for growth both through the transformation of assets in need of significant investment, as well as through the addition of new hotels. In 2016 the company only sold the Sol Parque San Antonio hotel, which, together with other minor disposals, generated revenues of €18 million compared to the €70 million euros raised in 2015 from several important transactions. In 2017, Meliá expects to make some sales to contribute to strengthening its role as a hotel management company,as well as increase the quality of the portfolio and the fit of hotels with their brands.
For further press information or images please contact Anita Gryson or Yasmine Najib at LUCHFORD APM
Anita.Gryson@luchfordapm.com / Yasmine.Najib@luchfordapm.com

020 7631 1000


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