21 August 2017

First Semester Results: we continue to grow

Meliá Hotels International has presented financial results for January-June 2017, which show a very positive business and financial management performance, and also reflect progress in international expansion, as well as in environmental, social, and corporate governance matters.

Regarding the hotel business, the company reported a global increase of 7% in revenues and 7.7% in Revenue per Available Room (RevPAR), the latter almost entirely attributable to price improvements and supported by growth of 19.6% in direct sales through melia.com. In line with the excellent season in Spain, both in the cities and the Mediterranean coast and Canary Islands, the best performances came from Spanish cities (+18.9%), the Mediterranean (+15.5%) and Spanish luxury hotels (+19.6%). Meliá also noted the increasing contribution of the MICE segment and its B2B portal MeliaPro, coinciding with the first few months after the successful launch of the new Palma de Mallorca Congress Centre, which the company operates and which continues to exceed market expectations for its first year.

These results are also due in large part to a hotel renovation and repositioning strategy which aimed to generate greater profitability and adaptation to brand standards, while also driving greater penetration of the upscale and luxury travel segments. After six years of hard work and more than €500 million of investments together with partners, the company has achieved increases of up to 300% in RevPAR for the repositioned hotels in Ibiza and 83% for hotels in Magaluf, among other achievements. In addition to the higher profitability, the company also emphasizes the value that this is creating for the destinations in which the hotels are located, making a significant contribution to improvements in employment, wealth creation, health and safety, and the reputation of the destinations.

On a financial level, Meliá reduced its net debt by €48 million in the second quarter, confirming its commitment to keeping its net debt to EBITDA ratio between 2 and 2.5. The positive financial results and lower average financing costs partially offset the negative impact of exchange rate differences between the US dollar and the euro.

Already present in 43 countries, the company continues to invest in expansion, with 19 new hotels signed up in 2017 to date under a strategy focused on an asset-light business model based more on hotel management agreements rather than hotel ownership. 91% of the hotels in the growth pipeline have been added under management or franchise agreements.

In order to present a more comprehensive report rather than just financial results, the company also described the progress made in "responsible management", which includes environmental management, social and labour issues, and Corporate Governance. Among the highlights are the results related to responsible consumption of resources and reduction of emissions, with 12% less CO2 emissions and 7% less water consumption per customer in the first half of the year. In addition, the company (a subscriber to the Paris COP21 agreements) also deepened its commitments with its membership of the Forética Climate Change Cluster and the Corporate Responsibility Working Group led by the International Chamber of Commerce.

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