Meliá Hotels International held its General Shareholders Meeting in Palma de Mallorca today, chaired by Gabriel Escarrer Juliá. Both the Chairman and the Executive Vice President and Chief Executive Officer of Meliá described to shareholders the positive results for 2016, as well as the key aspects in the transformation of the company, and the most important factors that will affect its strategy in this new era.
Highlights included the company's significant progress in Corporate Social Responsibility, with a special focus on children, human rights, employability, education and culture, as well as the fight against climate change. Both executives explained their pride in the more than 44,400 company employees, with more than 8,000 people hired in 2016, 21 percent of them in Spain.
The combination of renewal and continuity that the family component brings to Meliá Hotels International is more effective than ever. Gabriel Escarrer Jaume thanked the audience for their confidence and the honour to take part in the General Shareholders' Meeting for the first time, as the founder and current Non-Executive Chairman, Gabriel Escarrer Juliá, handed over executive powers to his son.
Gabriel Escarrer Juliá, Non-Executive Chairman, comments: “I have the immense good luck to be able to stand aside and give way to a new generation in the best possible conditions, with the company at its best, and to continue to offer my experience and industry knowledge. We will continue to build a solid, profitable and sustainable company, not only for our shareholders and employees, but also for society as a whole and for future generations. I am pleased to announce an increase in earnings per share, tripling the dividend paid out in 2016 and improving the pay-out ratio to 30 percent.”
Gabriel Escarrer Jaume, Executive Vice President and Chief Executive Officer comments: “Our diversified business model and clear leadership of the resort hotel industry, along with our financial and business results, have boosted our share value by more than 25 percent in 2017, and continue to build confidence in our strategy and our strengths, in a very positive environment for the travel industry. I am proud to represent the second generation of the family, and the opportunity that gives us to combine experience and continuity in basic things such as our corporate values, with the renewal and momentum for change that every multinational group nowadays needs to preserve its leadership. We have increased earnings per share by 143 percent compared to 2015, and our share price reflects growing market confidence, with 61 percent of analysts continuing to recommend buying our shares due to our successful recent track record.”
Customers, Team and Expansion, key factors
Gabriel Escarrer Juliá, briefly outlined what he considers the keys to Meliá's strength: its customers, the team, and international expansion. Escarrer recalled that in 2016, the company achieved a rating of 82 percent in employee satisfaction surveys, with a very high level (42.8 percent) of recommendation. Innovation and the hotel brands, which the company has continued to update in 2016, have also allowed it to differentiate its approach to all of the different contemporary customer profiles, as well as personalise the relationship with customers through significant efforts in digitalisation.
For the founder of Meliá, the company’s people have always been its most important asset, and in his speech Escarrer highlighted the role of the more than 44,400 team members and the policies deployed by the company to attract the finest professionals, develop their talent through an innovative virtual university and empower the leadership of managers. Awards received in 2016 and 2017, such as the Best Travel Company to work for in Spain (MERCO people) and the Most Attractive Company to work for in the industry, according to ADECCO are proof points. Meliá was also the second-best Employer Brand in the hotel industry in China according to the China Hotel Tourism Awards.
People are also an essential part of the company's successful and intense international expansion, which has allowed the diversification that has protected the company from adverse circumstances. 31 new hotels signed up in 2016, a pipeline of 64 hotels and 16,605 rooms for the year, and an intense schedule of new hotel openings (17 in 2016) were the main reasons for Meliá to break ground in new markets such as Myanmar, Iran, or New York, in addition to the company’s existing flagship hotels in 43 countries and those it continues to open as far afield as Serengeti in Africa, the Maldives or Dubai.
Social impact of results
The Executives reported on Meliá’s positive performance and the profound process of cultural change and strategic priorities that have made this possible, overcoming the difficult crisis that shook the travel industry over recent years.
Improvements in the company performance mentioned included Net Profit (+180 percent), EBITDA (+14 percent) and Financial Results (+49 percent) among other parameters, especially highlighting the results in its most important KPI, Revenue per Available Room (RevPAR), which grew by 14 percent overall, with spectacular growth in the Mediterranean region (+42 percent) and EMEA (+12.4 percent).
The Chief Executive of Meliá explained how these results have affected all the company’s stakeholders thanks to “social cash flow”, or the redistribution of revenues. Of the 2,878 million euros of total revenue, 1,256 million was paid out to suppliers, more than 600 million to employees, and 273 and 260 million, respectively, in payments to public administration and investments in product maintenance. 243 million euros was spent on hotel lease payments (28 percent of the portfolio) and 198 million euros to the owners of hotels under management, whilst 12,4 million was paid to shareholders through dividends.
Transformation and strategy
Gabriel Escarrer Jaume explained the transformation process through which Meliá was able to manage the financial crisis and come out of it even stronger than before, having changed the corporate brand (from the former Sol Meliá to Meliá Hotels International), updated corporate values without losing any of the essence of being both a publicly-traded company with a strong family base, and introducing a new strategic vision focused on consolidating the company’s global leadership in resort hotels while moving away from a focus on costs towards excellence in revenue management, and from a business model based on owning a majority of hotels towards a model based on the management of owned hotels and those of third parties.
All made possible in a context of the modernisation of the company’s hotel brands, digital transformation and the empowerment of its people, as well as other intangibles such as reputation and corporate governance. The Group’s online revenues increased in 275 million since 2014, with an estimated revenue of 540 million at the end of 2017, which makes the melia.com channel the most profitable source of income for the Company.
Following on from this, the strategic vision for 2017 and 2018 will prioritise:
- International expansion, keeping up the pace of new hotel agreements (30 hotels signed up in 2016) and new hotel openings (17 hotels opened during the year) seen over the last two years. Growth will prioritise the most popular resort destinations and cities with a strong leisure component (bleisure)
- Digitalisation and personalisation, with new B2C tools such as the new version of melia.com, the company’s biggest sales channel, and B2B tools such as MeliaPro, which recorded 71 percent growth over the year. The MeliaRewards loyalty programme grew by 44 percent, consolidating its role as an essential driver of the relationship with customers
- Revenue Management strategy, further consolidating efforts that have already achieved that 80 percent of RevPAR growth is due to improved rates, and 27 quarters leading RevPAR growth in the industry
- Strengthen the Real Estate strategy and growth through Joint Ventures with priority partners
- The renovation and repositioning strategy (in some cases with a change of brand) of some of the company’s most important hotels and destinations. After the successful transformation of Magaluf, Ibiza, Torremolinos and others, Meliá is currently working on other projects such as the revitalisation of the Palma seafront, spurred on by the recently-acquired Palau de Congressos Convention Centre, and an ambitious plan to renovate strategic assets in Spain under the Meliá and Gran Meliá brands. The Company has invested over 500 million euros in renovations in Spain between 2011 and 2016
After reviewing the challenges and opportunities facing the travel industry in 2017, the Executive Vice Chairman and CEO of Meliá concluded: “I am very proud to have been able to present today a financially solid and healthy company with a very clear vision of the future of our business. The key to us achieving this vision, thanking the management team and more than 44,400 employees for their work and loyalty, and also the Board of Directors, six of which are independent.”
For further press information or images please contact:
Tonya Fleetwood at DKC
212-981-5213
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 41 countries and four continents under the brands: Gran Meliá Hotels & Resorts, Paradisus Resorts, ME by Meliá, Meliá Hotels & Resorts, INNSIDE by Meliá, Sol Hotels & Resorts 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 @MeliaHotelsInt and Facebook meliahotelsinternational. www.melia.com.
Attachments:
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/cab794b1-89ac-4986-9875-0d0222727a32