Meliá Hotels International Posts Outcomes for First Half of 2019
Meliá Hotels International has presented results for the first half of 2019, showing earnings of €43.5m, 25.4% less than in the same period in the previous year, largely caused by the impact of €12m in capital gains in 2018.
Although the business environment is more complex than in recent years, the company has generated an improvement in global RevPAR (Revenue Per Available Room) which was stronger in the second quarter (due to the “Easter effect” in the first quarter) through price increases, leading to 0.4% growth overall for the first half of the year. Improvements in recurring revenues (+0.3%) were also maintained, as was EBITDA excluding capital gains (-0.7%).
Meliá moderates attributable profit in the first half of the year to €43.5 million due to the absence of capital gains and challenges in some resort destinations
Financial strength and the ambitious BeDigital360 project to complete its digital transformation, key factors behind the strength of the company
Major hotels such as the ME London (+18%), Meliá Milano (+17%) and ME Milano (+11%) perform well in Europe, joined by Paradisus Los Cabos in America (+9%)
The company opened five hotels and added five hotels up to June, and in July will open the Meliá Shanghai Parkside, a key hotel for the MICE segment in the financial capital of China
RevPAR in the 2nd quarter improved by 2.1% and remains positive (0.4%) for the first half of the year. Net Profit (€43.5m) suffers from the impact of €12m in capital gains recorded in the previous year. Priority focus on MeliaPro (B2B platform) that improved sales by 26.8%
Melia.com sales grew by 1.1%, with on-the-books sales 7.6% above the same period in 2018
Spanish and European cities performed well, with Madrid, Barcelona, London and Milan leading the way.
The net financial result improved by 5.9% and the average interest rate remained at 3.2%
Net debt was reduced by €21.8m (before IFRS 16) to €585.7m, confirming the commitment to keep the Net debt/EBITDA ratio below 2x.
The company expects to sign up 15 new hotels before the end of the year and is preparing new openings in Vietnam, China, Milan, Tanzania and Mexico. The growth pipeline currently includes 61 hotels with 14,000 rooms.
A positive outlook for the third quarter in city hotels and prudence in the Mediterranean region due to strong pressure on prices. Meliá has so far registered a slight increase in on-the-books sales for the summer season in Spanish resorts, although there is still uncertainty about the last-minute market in several destinations.
Meliá reinforces two basic drivers of strategy: financial solvency through a strong balance sheet and digital transformation.
Gabriel Escarrer, Executive Vice President and CEO of Meliá Hotels International: “Meliá's results for the first half of 2019 reflect the impact of the international environment on the tourism industry, particularly in destinations in the Americas such as the Dominican Republic, Cuba and the Cancun-Riviera Maya area in Mexico. Although it is true that these challenges have temporarily affected our performance over the period, it is also true that they demonstrate our resilience and competitiveness, supported by the strengthening of two key strategic areas: our financial strength and our digital capabilities.
“In Spain, our results confirm the difference mentioned in the latest Exceltur report between the excellent performance in Spanish city destinations and a slowdown in resort destinations affected by growing competition in emerging destinations. In resort destinations, a better performance has been seen in hotels that have chosen to strengthen their brands, differentiate their product, and increase their distribution capacity, among them the Meliá Hotels International resorts.”
To date this year, the company has signed five new hotels in Portugal, Dubai, Vietnam and a large hotel under franchise in Bulgaria, and has also opened another five to date in Vietnam, Colombia, Prague, Cuba and Paris.
In line with its strategic focus on the Asia Pacific region, the company will open three more hotels in Vietnam in 2019: Innside Saigon Central, Hoi An Historic Hotel managed by Meliá and The Reed Hotel managed by Meliá, plus a second hotel in the Pu Dong district of Shanghai, Meliá Shanghai Parkside, an important milestone for the brand in the MICE segment in the financial capital of China.
The company expects to sign approximately 15 new projects before the end of 2019, with an important focus on the United Kingdom, the Eastern Mediterranean, and of course, China and Southeast Asia.
Upcoming openings in 2019 will see the company continue to focus on the most dynamic markets in Europe, including the opening of the Innside Milano Torre Galfa in Milan.
This will become its third hotel in a priority city in which almost all of the company brands will soon be present. Another area of growth is in resorts set in the most exotic natural environments such as the Gran Meliá Arusha in Tanzania.
This is a growing segment in which Meliá already has outstanding hotels such as the Meliá Serengeti Lodge and Meliá Zanzibar in Africa, Melia Iguazu in America or Meliá Ba Vi Mountain Resort in Asia.
As for the Americas, Meliá will soon be opening a major Paradisus resort in Playa Mujeres, one of the most dynamic and successful areas destinations in Mexico, which will boost the company’s performance in the Caribbean.
Source: Yahoo Finance