Palma De Mallorca, Spain, Feb. 28, 2019 (GLOBE NEWSWIRE) -- The Company earned 13% more and improved margins and ratios thanks to a more resilient and diversified business model
The Company presented a summary of the Strategic Plan that has driven an intense cultural and digital transformation over the past three years
EBITDA before capital gains improved by 0.9% despite the stagnation in revenues (-3.7%)
Solid growth of the B2C channel Meliá .com (+9.7%) and B2B channel Meliá Pro (+34.7%)
Positive expectations for cities in Spain, UK and continental Europe, and somewhat weaker for the quarter in the Canary Islands and Americas
SUMMARY OF STRATEGIC PLAN (2016-2018):
- >250% increase in Earnings Per Share (EPS)
- Three years with a Net Debt/EBITDA ratio below 2x
- 30% of result generated by management agreements or asset-light formulas
- Revaluation of 23,2% of Group assets
- 14.818 rooms added to portfolio (76% under management agreements)
- 68% increase in sales through Meliá .com and 72% through MeliáPro
- Third most sustainable hotel company worldwide & Silver Class in the RobecoSAM Sustainability Yearbook 2019
- The Company has anticipated social, geopolitical and technological change through an intense programme of digital transformation and product renewal and repositioning
GROWTH STRATEGY:
- Stronger presence in the Caribbean and Southeast Asia
- 23 new hotels agreements signed and 20 hotel openings in 2018
- 50 openings scheduled for 2019 and 2020
- 62 hotels in the development pipeline (>15,000 rooms to be added over the next three years)
- 90% of new hotels under management and franchise agreements
FINANCIAL MANAGEMENT:
- Achievement of objective to keep Net Debt/EBITDA ratio below x2
- Average cost of debt once again falls to 3.2%
FORECASTS FOR 2019:
- Estimated low single-digit increase (in constant currency terms) in global RevPAR
- Positive evolution expected in cities in Spain, UK and continental Europe
- Increasing optimization of recently opened and repositioned hotels
Gabriel Escarrer Jaume, Executive Vice President and CEO of Meliá Hotels International said: "2018 was a year marked by a changing environment for a tourism industry which retains its fundamental strengths despite a slowdown in the business cycle which is already evident in certain regions and destinations in the western Mediterranean and the Caribbean. Given this situation, the results of our recently completed Strategic Plan confirm the appropriateness of the decisions made since 2016 to boost our transformation process and ensure we were in a position of greater strength to face a year such as 2019, in which we still foresee important challenges in the business in general, digitalisation, people, climate change and geopolitics."
London, 27 February 2019. Meliá Hotels International’s 2018 results reflect the success of the company's business model, where a strategic focus on internationalisation and digital transformation offset a slowdown in regions such as the Mediterranean or the Caribbean, attributable to the strong recovery of destinations such as Turkey or North Africa, and to a number of specific events that slowed demand in North America.
The Company earned a profit ex-capital gains of 140.1 million euros, an improvement of 13% over the previous year, despite a slight decrease in consolidated revenues (-1.5%) that reached 1,831,3 million euros. Excluding capital gains, Group EBITDA also improved by 0.9% to 307.8 million euros. The Company highlights the significant improvement in profitability (an increase of 78 basis points in the EBITDA margin in current currency terms and 106 basis points in constant currency terms, excluding the impact of exchange rate changes) and the excellent financial results (with a further decline in the average debt cost to 3.2%).
The Group also achieved its financial objectives, for the third consecutive year achieving its commitment to keep the Net Debt/EBITDA ratio below 2x and ratifying its firm commitment to maintaining healthy finances. The Company is particularly satisfied with the value generated for shareholders, with Earnings per Share having increased by 250% in the last three years.
The Company reports a solid evolution of sales through its own channels. The consumer-focused Meliá.com increased global sales by 9.7%, while MeliáPro, the channel created to optimise relationships with travel professionals, increased sales by 34.7% and is becoming an increasingly strategic channel for the Meetings & Events segment. Another highlight was the growing penetration of Meliá .com in regions such as Asia Pacific (35,7% increase in sales), Spanish cities (+20%) or America, the Mediterranean and Cuba, where it grew by around 12%.
The complex evolution of the hotel business is reflected in the key indicator of RevPAR (Revenues per Available Room), which improved by 1.7% globally for owned and rented hotels (+2,7% on a constant currency basis). Global RevPAR was also affected by lower occupancy rates in the Americas, mainly attributable to the closure of the Meliá Caribe Tropical (Dominican Republic) and Meliá Coco Beach (Puerto Rico), as well as specific problems in certain destinations in Mexico.
The recent opening of a new flagship hotel in the Dominican Republic, The Grand Reserve at Paradisus Palma Real, together with the opening of the two new hotels following the transformation of the Meliá Caribe Tropical has been transformed into, along with Paradisus Los Cayos and Meliá Internacional Varadero in Cuba, which will reinforce Meliá's leadership in the upscale segment in the Caribbean. The Group is also set to launch the Paradisus Playa Mujeres and Sol Tamarindo (Costa Rica) in the region. The Company has an intense schedule of new hotel openings up to 2020, including more than 50 hotels in Asia Pacific (16), the Americas (10), EMEA (17) and Africa (8).
Along with the new openings, the Company also expects that the opening and positioning of more than 20 new hotels in 2018 will be reflected in an increase in their contribution to results in coming years. As outstanding examples, Meliá Hotels International reports the extraordinary performance recorded by some of the Company's major properties, such as the Palma Congress Palace in Palma, jointly with the annex Meliá Palma Bay hotel, which in its first full year of operation has far exceeded the estimates of its business plan, with a turnover of 15.3 million euros and increasing its RevPAR by 22%. At an international level, Meliá Hotels International highlights the evolution of relevant hotels such as ME London, which continues to improve its performance with a growth of 11.66% in RevPAR, Paradisus Los Cabos, with 41.6% more revenues and 28.25% higher RevPAR, or Meliá París La Defense, whose RevPAR increased by 20.76%, among others.
In Spain, the Company has highlighted the performance of the Gran Meliá Palacio de los Duques hotel, with a RevPAR growth of 18.91%, the Innside Palma Bosque with 93.68% more revenues, Meliá Lebreros (15.53% of RevPAR growth) or Meliá Sevilla (26% more revenues), jointly with hotels like the ME Sitges Terramar and the Calvia Beach The Plaza, amongst others.
Strategic summary 2016-2018
In 2018, Meliá Hotels International completed the implementation of its latest Strategic Plan, reporting significant progress over the last three years in the Company transformation process. This progress can be summarised in these key areas:
Value creation for shareholders: The Company registered an asset revaluation of 23.2% up to 4,386 million euros, and an increase of over 250% in Earnings per Share between 2016 and 2018. The market consensus is that shares in Meliá Hotels International have one of the highest potentials for growth in the Spanish stock market índex Ibex 35 as a whole.
Financial consolidation and resistance to business cycles: The Company has achieved its objective of keeping the Net Debt/EBITDA below 2x for the third year in a row and has completed a decade of consistent reinforcement of the balance sheet, including a sustained reduction in average interest rates which fell to 3.2% in 2018. Meliá Hotels International also continues to focus its business model on management agreements and asset-light formulas that currently generate 30% of EBITDA and facilitate more agile and sustainable growth, generating higher margins with lower financial and real estate leverage.
Strengthening of leadership in resort and "bleisure" hotels: 80% of the 14,818 new rooms incorporated by the Company between 2016 and 2018 were in the leisure and urban leisure hotel segments, and 64% of them were in upscale or premium hotels. Currently, 70% of the room portfolio is in resort and urban-leisure products, with the remaining 30% in pure resorts. The Company took advantage of the positive circumstances of the period to carry out an ambitious renewal and repositioning of products in the upscale and premium segments.
Digital leap: After investing more than 130 million euros between 2015 and 2018 in digital transformation, the Company also reports an unprecedented cultural evolution, supported by data such as the 68% increase in sales through Meliá.com and 72% in Meliá Pro (the Company’s B2B portal) and the increase of 1.400% in sales through smartphones since 2015. After training more than 1,000 sales team members in digital skills, Meliá Hotels International maintains a commitment to extend digitalisation to the entire employee experience and process improvement to further increase efficiency.
A benchmark for responsibility and sustainability: In 2018, Meliá Hotels International ended its most recent Strategic Plan with recognition as the third most sustainable hotel company in the world by the sustainable investment agency RobecoSAM, responsible for preparing the Dow Jones Sustainability Index. In 2019, Meliá Hotels International was also classified in the "Silver Class" category in the RobecoSAM Sustainability Yearbook. This was all possible thanks to the significant public commitments made by the Company, including the 2030 Sustainable Development Goals of the United Nations and its commitment to human rights and environmental protection. The ambitious Meliá Hotels International environmental programme has led to 52.76% of the energy consumed by the Company globally being supplied from renewable sources (100% in Spain). The Company also implemented an environmental management system for all its hotels and 46% of the portfolio has already been certified based on sustainability standards.
People and social impulse: Within the framework of the Strategic Plan, the Company’s focus has been to promote an integrated model of people management, and to foster development and training opportunities that are key in an increasingly digital environment that requires new roles and functions. Today, the rate of employee engagement remains at a remarkable 85%, and 71.3% of vacancies are covered by internal promotion. The diverse talent pools currently open include 235 people.
Diversity and equal opportunities: 25% of the Company’s global management positions are now occupied by women, and this figure rises to 45% in the current talent pool for management positions. Meliá Hotels International also became the first Company to sign an agreement with the hotel industry international trade union (IUF) on the prevention of sexual harassment and Meliá Hotels International is also making progress in equality by joining projects such as ClosinGap, a cluster created by 11 leading Spanish companies which aims to quantify the economic impact of inequality and help close the gender gaps still prevalent in different areas of our society.
For Gabriel Escarrer, the progress made is a firm foundation for facing the coming years: "The results of our latest Strategic Plan place us in an excellent position to address the incipient change in the business cycle with a more solid and profitable business model, a more diversified and up-to-date portfolio of hotels that add greater value, and a reputation that cements the trust of investors and other stakeholders in the Company in a more uncertain environment. Meliá Hotels International’s strategy will continue to strengthen these priorities, as well as the digital transformation that has allowed us to be at the cutting-edge of new sales and distribution models, extending digitalisation to our people and processes to help multiply their productivity and efficiency, while also optimising both the employee and customer experience."
Forecasts for Q1 and the full year
In the first quarter, the Company remains cautious about the impact of certain factors on the performance of hotels in the Canary Islands, (which has one of its two high-season periods in the first quarter), including reforms that kept hotels closed in La Palma, Tenerife and Fuerteventura, as well as the recovery of market share by destinations in North Africa. In the Americas, a slight decrease in RevPAR for the quarter is expected due to a fall in demand in the MICE segment, and to the confluence of several hotels in the ramp-up phase.
Meliá Hotels International has positive expectations for the quarter in city hotels in Spain, the UK and continental Europe. In Asia Pacific, the new openings and the full-speed operations in hotels opened in recent years are allowing the Company to forecast the consolidation of the positive trend seen in 2018, a year for inflection in which the region significantly increased its contribution and results.
For the full 2019 financial year, backed by portfolio growth and solid fundamentals in the international travel industry, Meliá Hotels International forecasts point to moderate growth (low single digit) in RevPAR and to the Company’s goal to keep consistently improving its operating margins.
ENDS
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About Meliá Hotels International
Founded in 1956 in Mallorca (Spain), Meliá Hotels International operates more than 390 hotels (portfolio and pipeline) throughout more than 40 countries, with brands including Gran Meliá Hotels & Resorts, Paradisus by Meliá, ME by Meliá, Meliá Hotels & Resorts, INNSiDE by Meliá, Sol by Meliá and TRYP by Wyndham. The Company is the global leader in resort hotels, while also leveraging its experience to consolidate the growing segment of the leisure-inspired urban market.
Its commitment to responsible tourism has led the Group to become the third most sustainable hotel company in the world in 2018, according to RobecoSam, the investment company to produce the Dow Jones Sustainability Index. Meliá Hotels International is also included in the IBEX 35 Spanish stock market index and it is the Spanish hotel leader in Corporate Reputation (Merco Ranking). Follow us on Twitter, Facebook, Linkedin and Instagram Meliá hotelsinternational.com
Follow Meliá Hotels International on Twitter @MeliáHotelsInt and Facebook Meliáhotelsinternational. www.Meliá.com.
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