Palma De Mallorca, Spain, Nov. 13, 2018 (GLOBE NEWSWIRE) --
- Net Profit grew by 10.1% up to September, with a significant 83 basis point improvement in margins
- The Company resists recovery in Turkey and North Africa, and the slowdown in last-minute sales caused by the warm summer weather in northern Europe
- Remarkable growth of MeliáPro, the exclusive Portal for professionals and Meetings & Events’ segment
- The Company is ranked as the third most sustainable hotel company in the world by the sustainable investment agency RobecoSAM, responsible for evaluating companies to define the composition of the Dow Jones Sustainability Index
- The net value of the Group's assets in Joint Ventures exceeds estimations and the net asset value per share stands at €15.20
Business performance to September:
|
Gabriel Escarrer, Executive Vice President and CEO:
"The first nine months of 2018 confirm the competitive advantage created by a strategy focused on digital and sales strength and the extensive renovation and repositioning of our assets and brands. Our commitment to a model that prioritises adding hotels under management agreements is also beginning to bear fruit, providing us with increasing revenues from management fees and maximising our scale and structure in different markets. I am proud to highlight the positive performance of the Group in the first nine months of 2018, despite the competition from recovering destinations in North Africa and Turkey and the fall in bookings by northern Europeans caused by the exceptionally good weather they have had this summer.
“In this changing context, our international growth and clear commitment to sustainability, recently acknowledged by the most important international rankings such as the one prepared by the investment agency RobecoSAM for the Dow Jones Sustainability Index, are even more valuable and make us very optimistic about the future of the business."
London, 8 November 2018 - Meliá Hotels International has revealed its results for the first nine months of the year, which clearly reflect the benefits of a business model increasingly based on hotel management, a vocation for internationalisation, and increasing digital and sales strength. This strategy allowed the Group to present positive results both globally and in the Mediterranean area, the latter affected in the third quarter by the long-expected recovery of competing destinations in North Africa and Turkey and the warm summer in Northern Europe, which caused a drop in the number of last-minute bookings from those markets.
The Company generated revenues of €1,414.1m up to September, lower than in the same period in 2017 due to the significant number of hotels under renovation and in the process of opening throughout the year. Net Profit increased by 10.1% compared to the previous year and EBITDA grew by 9.1%. Meliá particularly highlights the improvement in the EBITDA margin (+83 basis points), attributable above all to improved efficiency both in sales and in management in general as the Group continues to move forward with its digital transformation. Earnings Per Share (EPS) also grew by 10.1% to €0.52, compared to €0.47 in the same period in 2017.
Financial results show a Net Debt/EBITDA ratio that is stable at 2x as well as a positive impact of exchange rates on reducing the average interest rate paid by the Company and thus allowing another reduction in net financial expenses. After publishing the valuation of its Net Assets in July, the Group has now also completed the valuation of its Net Assets included in Joint Ventures, which stands at €643m and places the overall net value of assets per share at €15.20.
Regarding the hotel business, the Group highlights that Revenue per Available Room (RevPAR) improved by 2.9% in constant currency terms, attributable to increases in both prices and occupancy, and emphasises the important progress made in improvements to margins. In constant currency terms, the EBITDA margin grew by 118 bp in the first nine months. Meliá attributes the increase in profitability to efficiencies enhanced mainly by the digitalisation strategy and by economies of scale generated by a business model based on management agreements, of which the Asia Pacific region is a prime example. In Asia Pacific the Company already has a strongly established structure which allows it to grow at a high pace through the addition of hotels under management agreements which bring in greater management fee revenues and raise brand recognition.
GROWTH AND KEY HOTELS
In line with the commitment to strengthen its leadership in the resort and "bleisure" (urban resort) segments, the Group is focusing growth on Southeast Asia, the Mediterranean and North Africa, and the Caribbean. A sign of this geographical focus is the imminent opening of new flagship international resorts such as the Paradisus Grand Reserve (Dominican Republic), Paradisus Los Cayos and Meliá Internacional Varadero (Cuba), and Paradisus Playa Mujeres (Mexico) in the Caribbean, and the Meliá Ho Tram and Meliá Can Rahm in the best resort destinations in Vietnam.
Up to September, 14 new hotels were signed in China, Thailand, Vietnam, the United Arab Emirates, Morocco, Montenegro, Portugal, the Mexican Caribbean, Malta and the United Kingdom. 17 new hotels were also opened over the same period, all under management agreements except for one leased hotel. In line with its brand standardisation strategy, the Group also disaffiliated four hotels over the first 9 months of the year.
The Group highlights the extraordinary performance of some of its major projects in recent years and the strategic contribution they are making to their respective regions. Meliá considers flagship projects to be the Gran Meliá Colón in Seville and Gran Meliá Palacio de los Duques in Madrid, or the ME London, whose popularity in the capital of bleisure allowed it to register a spectacular 24% increase in RevPAR in the third quarter. Mallorcan projects are also considered exceptionally important, including Meliá Palma Bay, alongside the Palma Convention Centre also operated by Meliá, and the recently opened Calvià Beach The Plaza, the new market-leading hotel in Magaluf which culminated the investment of more than €200m made by Meliá in repositioning the destination.
The Company remains positive about the fourth quarter and expects a single-digit improvement in city hotels, with the exception of Barcelona which continues to suffer reductions in the key Congress market. The company also expects the Canary Islands to see even more intense competition from destinations reopened in Egypt and Tunisia in winter after a number of record-breaking years.
Finally, the Group highlights the important inclusion in the ranking prepared by the sustainable investment agency RobecoSAM in their evaluation of companies to define the composition of the selective Dow Jones Sustainability Index, a benchmark in ESG investment.
The agency named Meliá the third most sustainable hotel company in the world. Gabriel Escarrer said: "This is not only something for which a family-based company with solid ethical, social and environmental values is rightly very proud, but also something that improves the attractiveness of the Company for the booming socially responsible investment (SRI) market, which has already gained a significant presence among our shareholders."
AMERICAS
-3.6% RevPAR in the quarter
+9.5% EBITDA in constant currency (9M)
+445 bp in EBITDA margin (9M)
HIGHLIGHTS
Performance in the Americas was mixed, showing a small drop in revenues for the quarter (and consequently in sales through Meliá.com) due to some temporary closures of major hotels, largely offset by operational efficiency improvements that generated an improvement in EBITDA. The depreciation of the Venezuelan bolivar, the accumulation of sargassum seaweed on the beaches of Playa del Carmen and the FIFA World Cup which diverted tourists from Latin America to Russia also had a negative impact on the region.
OUTLOOK 2018
The winter season looks positive, assuming that the slight slowdown in group bookings in the Cancun area will be offset by an increase in bookings from individual travellers. The renovation of the Meliá Caribe Tropical and its conversion into two superior-category hotels together with other openings such as the luxurious Paradisus Grand Reserve in the Dominican Republic (392 rooms) and the reopening after a full renovation of the Meliá Iguazu, will allow the Group to generate additional revenues and strengthen its presence and brands in the region. The Company expects a very positive impact from the inauguration of Paradisus Playa Mujeres in Mexico in the first quarter of 2019.
EMEA
+1.7% RevPAR
+13% sales through Meliá.com
HIGHLIGHTS
Continued positive market trends in regions such as Germany (+2% RevPAR), the United Kingdom (+11.4% RevPAR) or France (+26.3% RevPAR) had a positive impact on the performance in our main markets in Europe. Italy had a mixed performance, excellent in ME Milan Il Duca and Gran Meliá Rome (+6% and +2% RevPAR respectively) but slow in Meliá Genoa after the collapse of the Morandi Bridge and also sluggish at the Meliá Campione. Premium hotels in Spain in this region saw a -5.8% decrease in RevPAR for the quarter, mainly explained by price pressure and the impact of the Barcelona hotels (with a RevPAR decrease of 24% in the Meliá Sarriá) due to the negative evolution of the MICE segment. On the positive side, the Gran Meliá Palacio de Los Duques in Madrid (+16% RevPAR) and Gran Meliá Colon in Seville (+14%) performed well and continued to make progress in their strategy to positioning themselves among the most luxurious hotels in the world.
OUTLOOK 2018
The fourth quarter looks positive for the EMEA region in general, with double-digit growth expected in the UK and France and single-digit growth in Germany and Italy. In Spain, a certain slowdown is expected in the Canary Islands compared to the exceptional season in 2017, and greater stability in comparative terms in Barcelona given that it has been a year since the current situation began and which continues to have a negative impact on our hotels.
MEDITERRANEAN
-1,2% RevPAR
+7.5% Fee revenues
+11% sales through meliá.com
HIGHLIGHTS
A complex environment in which Spanish resorts were affected by the recovery of alternative destinations such as Egypt and Turkey in essential feeder markets such as Germany and the United Kingdom, as well as by the unusually good weather in the north of Europe that reduced the number of trips abroad, and also by events such as the FIFA World Cup. Together with the impact of the oil price and strikes at various airlines, all this caused a reduction in the number of tourist arrivals in Spain for the quarter compared to the same period in the previous year. In spite of all this, the Group's hotels on the Spanish mainland coast ended the third quarter with improvements in both prices and occupancy, while the Balearic Islands increased occupancy at the cost of reducing average prices. The resorts in the Canary Islands suffered greater competition from alternative destinations, particularly Turkey and Egypt which have more competitive pricing for Tour Operators, and also from the renovations in hotels such as the Meliá Salinas and Meliá Fuerteventura over the summer. Positive progress was made by the Group's hotels in Cape Verde, in spite of the fact that some of them are still in the launch phase.
OUTLOOK 2018
Growing competition from Turkey, Egypt and Tunisia affects demand and the prices negotiated with tour operators which will increase the pressure on some resorts, especially luxury resorts in the Canary Islands. The Company expects to limit and offset this impact through sales and marketing programmes to enhance the penetration of direct channels. The Company also remains cautious with regards to two issues with a potential impact on international tourism: the evolution of oil prices and the results of the Brexit negotiations, and has developed contingency plans to limit the potential impact on operations.
SPAIN – CITY HOTELS
-0.1% RevPAR
+9% sales through Meliá.com
HIGHLIGHTS
The third quarter in non-Premium city hotels in Spain was flat, with a general improvement in occupancy and stability or decreases in prices. Central and southern Spain saw a sharp rise in occupancy and a fall in prices. Hotels in eastern Spain saw increased demand and stable prices thanks to individual travellers and higher sales through Meliá.com, especially in recently repositioned hotels such as the Tryp Apolo, Meliá Palma Marina and Innside Palma Bosque. Barcelona hotels continued to suffer the impact of the political situation, most importantly in the MICE segment. Northern Spain and the Levante, on the other hand, had a positive third quarter.
OUTLOOK 2018
In general, the Company expects a good fourth quarter for non-premium city hotels in Spain. A positive performance in the individual traveller and MICE segments in Madrid compared to the same period last year is expected, as well as an improvement in hotels recently repositioned in the bleisure segment (such as the Meliá Madrid Serrano or Meliá Princesa) with a trend towards extending stays to the weekend, plus the expected celebration of the largest pharmaceutical industry congress in the world. In southern Spain, a strong performance from the MICE segment is expected in Seville, alongside individual demand in Seville, Marbella and Sierra Nevada. In eastern Spain an excellent season is expected at the Palma Convention Centre in its second year of operation, after having exceeded all expectations in 2017.
CUBA
-10.3% RevPAR (in USD)
-14.6% sales through Meliá.com
HIGHLIGHTS
The destination has shown its strength and begun to overcome the complex market dynamics caused in 2018 by new regulations on international travel imposed by the US Administration and the reduction in flights from some cities in the United States, Europe and Canada. In the third quarter, this situation began to reverse and show signs of recovery, with a slowdown in the fall in RevPAR (which was -29.7% in the first half of the year), and above all a double-digit increase in RevPAR estimated for the fourth quarter.
OUTLOOK 2018
The Company believes the recovery will be seen in a significant increase in occupancy compared to a previous year affected by hurricanes, a process that the Company hopes to accelerate working together with the Cuban authorities. Meliá has also confirmed its positive outlook for Cuba in 2019 at the World Travel Market 2018, currently taking place in London. In terms of growth, the Group plans to open two large luxury all-inclusive resorts in the fourth quarter: the Paradisus Los Cayos (802 rooms) and Meliá Internacional Varadero (964 rooms).
ASIA PACIFIC
+17% RevPAR
+20.5% Free revenues
+19% sales through Meliá.com
HIGHLIGHTS
The Company is beginning to see the effects of economies of scale due to a growing presence in the region, and increased demand and positive market dynamics also allowed improvements in occupancy and prices, supported by a greater contribution from Meliá.com, business travel and OTAs. Excellent response to Company campaigns to penetrate niche markets and superior-quality segments for strategic destinations such as America, Europe, Vietnam, Cuba or Indonesia, with a notable increase in travellers from Australia, China and South Korea. In China, the Gran Meliá Xian and Meliá Jinan performed well in spite of a very competitive market, as did new openings such as the Innside Zhengzhou or Meliá Shanghai Hongqiao. In Indonesia, Bali continued to show positive results with a more complex situation in areas such as Jakarta, Yogyakarta and Macassar, with a tendency to improve in the future. In Vietnam, a market where Meliá is already among the leading hotel operators, performance was positive in hotels such as the Meliá Hanoi, Meliá Danang and Sol Beach House Phu Quoc.
OUTLOOK 2018
Meliá announced the signing of three new hotels in October and is optimistic about the fourth quarter in the areas where it operates, anticipating important events such as the IMF Annual Meeting in Nusa Dua near the Meliá Bali hotel, or the China Import and Export Fair in November in Shanghai, one of the largest in the world. In Vietnam an increase in the number of visitors from Europe is expected along with the normalisation of the situation in Myanmar and Malaysia.
BRAZIL
-0.4% RevPAR (+16.1% in local currency)
-3,3% fee revenues
HIGHLIGHTS
The stabilisation of the Group's hotels in Brazil continued in a third quarter which saw a strong increase in occupancy despite the fall in prices. The better dynamics in domestic demand led to strong RevPAR growth (+16%) in local currency, although the exchange rate of the Brazilian Real against the euro detracted from the results. The improvement of the Brazilian economy after the major recession combined with a certain political stability also generated an increase in tourist arrivals. Robust evolution of the MICE segment and the emergence of the "bleisure" segment in cities such as Sao Palo with unprecedented occupancy increases at the weekend. Very positive trend in sales through Meliá.com.
OUTLOOK 2018
The impact of the elections in October may temporarily slow down hotels in Brazil, although the Company expects positive numbers in Sao Paulo in November and December thanks to events such as the Formula 1 World Championship, the Sao Paulo Motor Show, Comic Con and several music festivals. With respect to the first quarter of 2019, the travel industry remains moderately optimistic about the impact the change of government could have on the country's economy.
-ENDS-
For further press information or images please contact
Holly Mahon at LUCA by LUCHFORD APM
holly.mahon@luchfordapm.com / 020 7631 1000
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, operated under the brands: Gran Meliá Hotels & Resorts, Paradisus by Meliá, ME by Meliá, Meliá Hotels & Resorts, INNSIDE by Meliá, Sol by Meliá and TRYP by Wyndham. 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 or the US, as well as maintaining its leadership in traditional markets such as Europe, Latin America or 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. Meliá Hotels International is included in the IBEX 35 Spanish stock market index. Follow Meliá Hotels International on Twitter @MeliáHotelsInt and Facebook Meliáhotelsinternational. www.Meliá.com.