09 November 2017

Meliá increases profits by 23.3% and improves margins and sales efficiency, consolidating a business model focused on hotel management

  • The business model based on managed hotels has seen an increase in EBITDA of 9.2%, thanks to an increase in fees’ revenues
  • The situation in Catalonia, the Venezuelan Bolivar exchange rate, the hurricane in Puerto Rico and the closure of several airlines in Europe had a negative impact on performance

Business performance: 

  • 5% increase in total revenues thanks to 6.1% growth in Revenues Per Available Room (RevPAR) entirely explained by price increases
  • 7.8% increase in EBITDA and a 42 basis point increase in EBITDA margins, both excluding capital gains
  • Melia.com continues to grow, with sales up by 17.9%
  • Optimisation of the digital distribution strategy developed by the Company
  • Outstanding performance of the Gran Meliá Palacio de los Duques in Madrid (Best Hotel in Europe 2017)

Expansion and management model: 

  • Meliá will sign up more than 30 new hotels in 2017, having already signed 23 new hotels in the first nine months of the year and 4 more in Asia in October. The company has just opened the Meliá Iguazu in Argentina and is preparing the opening of the Meliá Serengeti Lodge in Tanzania and ME Sitges in Spain.
  • The pipeline (hotels agreements signed and in the process of opening) stands at around 17,000 rooms in 70 hotels, representing 18% of the current portfolio. 93% of these hotels will be added under management agreements
  • Meliá has obtained more than 70 international awards and nominations to date for its hotels and their service attributes 

Financial management: 

  • Slight increase in debt in the third quarter (€10.2 million) to €584.1 million. Commitment to maintain Net Debt/EBITDA ratio between 2 to 2.5x in the medium term, although the company expects to end 2017 below 2x
  • Increase in financial expenses due to negative exchange rate differences, despite the reduction in the average interest rate from 3.6% to 3.3% 

Forecasts for the end of the year: 

  • The Company expects a significant contribution in the fourth quarter of 2017 and throughout 2018 from hotels currently in the opening process and from new additions to the portfolio.
  • Meliá expects to achieve results in line with the market consensus, although it assumes that unexpected events such as hurricanes ocurred in the Caribbean, the evolution of the dollar against the euro, and uncertainty in Catalonia (where it operates 12 hotels) will have an impact on operations. 

Gabriel Escarrer, Executive Vice President and Chief Executive Officer: "The first nine months of 2017 confirm the strength of the company, in spite of a less favourable business environment due to unexpected events such as hurricanes in the Caribbean or political tension in Catalonia, which we trust will soon be overcome. In spite of these challenges, the positive results in urban and resort hotels in Spain, the excellent performance of major projects such as the Gran Meliá Palacio de los Duques in Madrid and the ME London, and the trends in sales (driven by the company’s digital strength, with melia.com as the main sales channel) confirm the appropriateness of our sales and brand strategies and make us optimistic about the short and medium term".


Meliá Hotels International today presented its results for the first nine months of the year, reflecting the achievements of its brand strategy, product repositioning and sales strength, while also showing its ability to continue to grow, in spite of the impact of events in the third quarter such as the hurricanes in some of its destinations, politicians tensions in Catalonia, unfavourable exchange rates between the dollar and euro and also the Venezuelan bolivar.

The company generated €1,458.2 million in revenues up to September, 5% more than in the same period in 2016. Net Profit increased by 23.3% over the previous year, with an improvement in EBITDA of 7.8% excluding capital gains. The company particularly highlights the improvement of 42 basis points in the EBITDA margin thanks to cost optimisation and actions to improve sales efficiency, an area where the company will continue to focus.

Financial results show that the Net Debt/EBITDA ratio remained stable between 2 2.5x after a slight increase of €10.2 million in debt in the third quarter. Results were also affected by the negative impact of the evolution of the dollar-euro exchange rate. The Company offset this by reducing average interest rates to 3.3% and extending amortization periods.

The hotel business remained the most important driver of company growth in a quarter in which there were no capital gains from asset sales. RevPAR increased by 6.1% on a global level, attributed entirely to price increases. There were significant increases in Spain, where overall RevPAR increased by 12.3% after an increase of 8.1% in resort hotels and 17.8% in city hotels.

The company was particularly pleased with the 9.2% increase in EBITDA of the management model, making them a fundamental driver of value creation for the company in the medium term while also ensuring profitability for hotel owners and partners.

Regarding the Real Estate area, the company reports that there were no capital gains on asset sales in the third quarter (compared to the €2 million generated in the same period in 2016). Meliá will continue to analyse opportunities to generate value through the sale of non-strategic assets in Spain, and to work with top-level partners to strengthen Joint Ventures to reposition hotels and multiply their contribution to the Meliá system.

The company continues to meet its international expansion objectives in full. Meliá has added 27 hotels to date to its opening pipeline in the markets it considers of greatest interest and with the greatest guarantees. These include two hotels in Vietnam, two in Malaysia, two in China, two in Thailand, three in Portugal, two in Spain, one in Argentina, two in Italy, two in the French Antilles, one in Albania and eight in Cuba. The company expects to announce more additions before the end of 2017. 


Results by region (third quarter)


Fee revenues by region:


+1.2% RevPAR

+7.9% fee revenues 

Milestones: positive evolution, although negatively affected by exchange rates (Venezuelan bolivar to the dollar and dollar to the euro) and by cancellations after the hurricanes in September (6.9% less revenue compared to September 2016) with a considerable impact on some destinations. Puerto Rico was the destination most affected by the hurricane, with operations interrupted for months due to severe infrastructure problems in the country.

Melia.com sales: + 19.1%

Outlook 2017: October could be slow due to the continued impact of the hurricanes, although the situation in Puerto Rico may boost other destinations such as Punta Cana in the high season (first quarter 2018). The company expects a positive performance in November and December and high single-digit growth for the fourth quarter, as well as a significant improvement in margins.



+0.4% RevPAR

+12.7% fee revenues 

Milestones: Positive quarter thanks to a consistent recovery in some countries such as France and the United Kingdom, as well as the growing importance of the bleisure segment in cities with tourism potential.

Germany performed well, the United Kingdom and France saw a clear recovery, and Italy registered a correct quarter. Premium hotels in Spain saw significant growth in city hotels, driven mainly by the Gran Meliá Palacio de los Duques in Madrid (named Best Hotel in Europe at the International Hotel Awards) and the Meliá Barcelona Sky (until the recent impact of political tension in Catalonia), and a more even evolution in the resort hotel segment.

Melia.com sales: + 16%

Outlook 2017: The favourable economic environment will continue to drive demand from the main feeder markets for both resort and city hotels, while in Spain the company is monitoring the impact of the political tensions in Catalonia after an increase in the number of cancellations.



+8.5% RevPAR

+24% Fee revenues 

Milestones: Positive third quarter thanks to the increase in visitors to Spain (2.2% revenue growth) offsetting the recovery of destinations such as Greece or Turkey and the growing popularity of vacation rentals. The Balearic Islands suffered from aggressive last minute offers in competing destinations and major growth in vacation rentals, with Menorca (5.5% revenue growth) seeing the highest growth thanks to a focus on more select tourism. The Canary Islands almost equalled the excellent revenues registered in the third quarter of 2016 despite having several hotels under reform, such as the Meliá Gorriones or Melia Salinas. The hotels on the Spanish mainland coast increased revenues by 6.5%.

Melia.com sales: + 21.5%

Outlook: Market dynamics in recent months allow us to remain confident about the region and expect a positive fourth quarter both in the Canary Islands and mainland coast, thanks to a certain shift in demand towards September and October. Cape Verde is expected to have a magnificent winter season.



+14% RevPAR

+14.7% fee revenues 

Milestones: the positive performance continues thanks to the evolution of the MICE and bleisure segments in cities such as Madrid, Barcelona, Palma and Seville, where Meliá has worked hard to position itself as market leader and which offer great opportunities for its brands. Madrid increased revenues by 8%, with a positive impact from the MICE segment, while Andalusia, the Balearic Islands and Catalonia evolved favourably, the latter seeing an increase in revenues of 10%. In the north and east of Spain, the company benefitted from the healthy domestic market, with 8% increase in room revenues.

Melia.com: +12.9%

Outlook: the Spanish city area is expected to continue to benefit from the growing number of tourists in Spain, although an unquantifiable negative impact is expected due to the events in Catalonia, especially in the hotels in Catalonia itself, where corporate travellers and MICE business may be transferred to other cities.



-10.9% RevPAR

-3.2% Fee revenues 

Milestones: Negative impact in the third quarter due to Hurricane Irma and the restrictions announced by the Trump Administration on travel to Cuba. Before the hurricane, melia.com sales had increased by 18% in July and 11% in August. The rapid response of the Cuban government to the hurricane allows us to expect a rapid return to normal, even in the destinations most affected by the hurricane such as the Cayos or Varadero.

Melia.com sales: + 20.3%

Outlook 2017: the hurricane meant some hotels had to close for reconstruction and improvements. The company can now report that all of the hotels will be fully operational for the high season (first quarter of 2018)



-8.1% RevPAR

+45.1% Fee revenues 

Milestones: lower occupancy rates combined with fact that several hotels are still in the opening process led to a fall in RevPAR for hotels in the region. The strong portfolio growth in the region, now present in seven of the most dynamic countries in Asia, will allow the Company to achieve scale and multiply the synergies and profitability of its resources in the medium term.

Melia.com sales: + 41.4%

Outlook 2017: Meliá announced the signing of five new hotels in October. This growth and the positive market dynamics, with travellers very receptive to the service culture and attributes of its brands, are factors which cause the company to expect a greater contribution from this region in the future.



+2.9% RevPAR

+49.9% fee revenues 

Milestones: The government has introduced measures to combat corruption and boost growth to restore confidence, increase transparency and the expectations of a faster recovery in the coming months. The company reports an improvement in performance (+12.4% RevPAR) on a country level, not including the Gran Meliá Nacional Río, where operational delays mean that 40% of its rooms and its Convention Centre are still pending delivery by the hotel owners, both key factors in attracting the MICE segment.

Melia.com sales: + 13.6%

Outlook 2017: The company expects an increase of 7% in RevPAR for the fourth quarter compared to 2016 thanks to improvements in hotel operations in Sao Paulo, especially in October and November, and also the events scheduled for December. The company also reports its concern regarding the Gran Meliá Nacional Rio, which is still not operating at full capacity.

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