Meliá revenues grew by 4.2% and EBITDA by 13.8% on a constant currency basis

The Company highlights positive momentum in the Caribbean, where it will open more than 3,000 new rooms in Cuba, Mexico, Dominican Republic and Colombia in 2018

Business performance (on a constant currency basis):

  • Total revenues increased by 4.2%
  • Global RevPAR grew by 7.4%, 70% of which is due to price increases
  • Growth continued in the Mediterranean and Spanish cities
  • Group EBITDA grew by 13.8%
  • Excellent recovery in European cities with the exception of Berlin, due to the lack of flights after the end of operations of Air Berlin
  • 8.9% growth of melia.com, with an outstanding 46% growth in the Mediterranean
  • Healthy evolution of MeliaPro, the booking platform for travel agencies and other professional customers, with an outstanding 30.5% increase on Groups’ bookings through MeliaProMeetings 

Financial results: 

  • Earnings per share increased by 18.9%
  • Net debt/EBITDA target ratio for the year remains at 2X
  • Reduction in financial expenses of €1.6M (-20%)
  • Reduction of average interest rate to 3.19% compared to 3.4% in 1Q-2017

International growth: 

  • The company has opened 8 new hotels this year (4 in Cuba, 2 in Spain and 2 in Vietnam)
  • To date, Meliá has signed 7 new hotels in 2018: 3 in Vietnam and 1 each in Thailand, Portugal, Dubai and Morocco
  • The pipeline for future hotel additions stood at 63 hotels with 16,000 rooms as of March 31, 85% of them under management agreements

Outlook 2018:

  • Forecasts for the second quarter continue to suffer the effect of the dollar-euro exchange rate
  • Excluding exchange rate differences, the forecasts become positive, estimating single-digit RevPAR growth led by hotels in France, Spain and Italy
  • The company maintains its forecast of significant improvement in margins in 2018
  • Excellent performance and outlook for the Calviá Beach project (Magaluf), with a new hotel and shopping mall opening in its 7th season, and very positive performance from the Palau de Congressos Convention Centre and Hotel Palma Bay in Mallorca after their first year of operations

Gabriel Escarrer Jaume, Executive Vice President and CEO of Meliá Hotels International: “The Meliá global hotel business has had a positive first quarter accompanied by a clear recovery in European cities. This international economic environment combined with our strategy to strengthen our brands internationally, reposition products and firmly commit to digital transformation, boosts our international expansion and allows us to keep consolidating our leadership in the leisure and bleisure (business+ leisure) segments, one of the priorities in our Strategic Plan”.

Meliá Hotels International earned 22.1 million euros in the first quarter of 2018, an increase of 18.9% over the same period in 2017. The positive performance of the hotel business was negatively affected by the significant depreciation of the dollar, down 15% compared to the first quarter 2017, since a large part of the company’s revenues are generated in dollars although its accounts are stated in euros.

The depreciation of the dollar caused revenues (€401.1Mn) to fall by 2% in euro terms, even though they increased by 4.2% when exchange rate differences are excluded. EBITDA fell by 1.1% but would have increased by 13.8% excluding exchange rate differences, accompanied by a 148 base-point improvement in profit margins. Something similar is seen in global RevPAR (Revenue per Available Room) where an improvement of 1.6% would have risen to 7.4% without the exchange rate difference.

Meliá continues to enjoy success in its digital transformation strategy, with very significant increases in its direct B2C sales through melia.com (+8.9% in the first quarter excluding exchange rate differences), while B2B sales through MeliaPro increased by 6.9% in the first quarter, highlighting growth in EMEA (+21.4%) and APAC (+18.5). Of note is also the growth of Group business through the new MeliaPro Meetings website that has increased by 30.48%. Digital campaigns and the optimization and growing penetration of the website led to very significant increases in direct online sales, especially in the Mediterranean, with a 46% increase, EMEA with 22%, Asia with 20 %, and Spanish city hotels with a 15.5% increase.

In terms of financial results there was a slight increase in debt, which rose from €593.7 million in December 2017 to € 639.8 million in 2017 with the Net Debt to EBITDA ratio remaining at a multiple of 2. Thanks to the decrease in gross debt and average interest rates (3.19% versus 3.4% in 1Q- 2017), the company was able to reduce financial expenses by 20% (€1.6Mn).

The share price over the first quarter remained stable (slight decrease of 0.1%), outperforming the Ibex 35 which fell by 4.4% compared to the same period in 2017. To date the share price has grown by 7.7%, while the Ibex 35 has increased by 0.9%. Earnings per share have grown by 18.9%.

In 2018, Meliá will conclude its current Strategic Plan and expects that the actions taken to achieve greater operational efficiency throughout the system, which have already begun to bear fruit, will continue to generate significant improvements in profit margins over the year. The measures already in place led to improvements that ranged between 210 base points at EBITDA level in the Americas, 130 bp. in Spanish cities and 170 bp. in the Mediterranean (including Canary Islands).

Performance by region:

Business performance in local currency (excluding exchange rate differences) in all regions was positive, with the exception of Cuba, affected by factors such as the temporary closure of hotels after the 2017 hurricanes and the reduction in travellers from the US, only to Havana, following the new restrictions applied by the US Government.

Highlights include the excellent performance of hotels in the Mediterranean and Canary Islands (+6% RevPAR, +46% sales on melia.com) in spite of the closure of some hotels for renovation and unstable weather over Easter, as well as the recovery of European cities such as Paris (+16% RevPAR, +31% sales on melia.com) or Italy, where RevPAR increased by 21% and melia.com sales by 23%. The poorest performance in Europe was seen in Berlin, due to the lack of flights provoked by the end of operations of Air Berlin.

The incipient recovery of hotels in Brazil due to progressive improvements in the national economy is also of note, with RevPAR growing by 9.5% in local currency and sales on melia.com by 7%. In Asia, there was a positive performance from recently opened hotels still in the ramp-up phase such as the Innside Zheng Zhou and Melia Hongqiao in China, Sol House Legian in Indonesia and or Sol Beach House Phu Quoc in Thailand. In a region in which all the hotels are operated under management agreements, total revenue from management fees increased by 22% for the period.

Positive momentum in the Caribbean and Asia

In the first quarter of 2018, Meliá reaffirmed its commitment to the Caribbean, one of the most dynamic travel destinations in the world. In Cuba, the company opened four of the seven hotels it plans to open this year, which together will add more than 2,150 new rooms to its portfolio. Five of the hotels are located in World Heritage cities such as Camaguey and Cienfuegos, helping the company enhance its activities in the increasingly important multi-destination vacation segment in Cuba, while the other two hotels are major resorts in Cayo Santa Maria (Paradisus Los Cayos) and Varadero (Meliá Internacional).

At the end of 2018, Meliá will also open the spectacular new Paradisus Playa Mujeres resort with 392 rooms on the coast of Isla Mujeres, just a few kilometres from Cancun, and the Grand Reserve in the Dominican Republic with 432 rooms and an exclusive concept for luxury travellers, and the Meliá Cartagena, the Company’s first hotel in the Colombian Caribbean.

Regarding Asia and the Pacific, Meliá, who already operates and/or prepares the opening of 44 hotels in the region, will open 7 new hotels during 2018, that will represent the addition of over 1.530 new rooms in key countries such as China, Vietnam or Indonesia.

-Ends-

For more information, please contact PRCO

Haya Bishouty hbishouty@prco.com

Mirna Alsharif malsharif@prco.com

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 380 hotels (current portfolio and pipeline) throughout more than 40 countries and four continents, operated under the brands: Gran Meliá Hotels & Resorts, Paradisus by Meliá, ME by Meliá, Meliá Hotels & Resorts, INNSIDE by Meliá, Sol by Meliá 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 globalisation, 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.

© Press Release 2018