• Discounting the effect of capital gains, earnings and EBITDA show an increase of 5.6 and 14% respectively;
• Given the positive developments and forecasts for international tourism in 2012, the chain accelerates the process of internationalization;
• Great reaction in the U.S. market to the new Paradisus resort in Playa del Carmen, which when in full operation will be a major contributor to company Ebitda.
For the third quarter the company highlights the dramatic increase in RevPAR of 15.8% in Spanish resort hotels, notably in the Balearic and Canary Islands, resulting in an average increase of 10%, which confirms the trend observed during the first half of the year.
The slight decline in revenue (-0.7%) and reduction in EBITDA (-18.3%) compared to the first 9 months of 2010 are due to lower capital gains (36.6 million from January to September 2011 versus 93.2 million in 2010), which included gains from the sale of the Tryp brand to WHG and from the sale of other assets. The company expects the gradual correction of this effect up to year-end.
Discounting the effect of these gains, earnings for the first 9 months of 2011 would have increased by 5.6% to the earnings reported in 2010, and EBITDA would have shown an increase of 14%, improvements which would have been due in large part to the success of the third quarter.
With the dramatic improvement in RevPAR, the indicator that measures the relationship between average price and average occupation, the company stressed the excellent season in Spanish holiday resorts, with the Balearic and Canary Islands hotels recording historic occupancy figures. This performance, supported in part by a redirection of travellers due to the instability in North Africa, is expected to be maintained during 2012. Globally Meliá Hotels International bases its forecasts for growth on improvements in the corporate and business segment and major conferences and events in European cities where the company operates.
In the Caribbean, although it is still rather early to make accurate forecasts, the reservations already received anticipate a positive high season (1st quarter 2012) not only in leisure but also in business trips. This is partly due to the opening of two new Paradisus resorts in Mexico in November 2011.
Despite the positive figures in Europe, the Americas and Asia, the hotel company remains prudent about the uneven pace of recovery in developed economies and their potential effect on slowing the recovery in tourism and travel, and aims to intensify its international growth, with diversification acting as a vaccine against any increase in regional risk. In Spain, the company highlights the differences between urban segments, which have been especially affected by the economic situation, and the positive evolution and forecasts for leisure hotels, which are less dependent on Spanish clients and which represent 58% of Meliá Hotels International’s portfolio.
As far as finance is concerned, the company reaffirms its commitment to reduce its net debt by the end of 2011 to less than 1,000 million Euros, announcing that they are currently in the process of revaluing the company' assets.
Strategy: more than just international growth
In recent years globalisation has been a strategic focus for Meliá Hotels International, and during the first 9 months of 2011 the company entered new markets with hotels in Zanzibar, Tanzania, Cabo Verde, Dubai and Colombia, and also opened its second hotel in the United States (Meliá Orlando). In regards to Meliá Orlando, the company highlights the qualitative importance of opening a hotel in the first leisure destination in the US, main feeder market for the resorts in the Caribbean. This new hotel, entails a strategic position for brand recognition in a huge market such as the US, and presents important synergies due to the vacational component of the company and the relation between this destination and the company’s vacation club business.
In the different markets, a new hotel has been signed every three weeks, some of which are already in operation, while the 32 remaining hotels in the company pipeline, will provide 8,918 rooms, representing approximately 10% of the total portfolio.
This expansion is possible due to the revaluation of its hotel brands and the strength of Meliá Hotels International in hotel management for both its own hotels and those owned by third parties. 88% of the hotels in the pipeline will be added under low capital intensive formulas (management, rental or franchise agreements).
The objectives for the coming years are also focused on major progress in customer attraction and loyalty, thanks to improved customer relationship management through information technology that allows the personalisation of relationships, as well as through enhancing the leadership already achieved by Meliá Hotels International in social networks, with nearly 210,000 fans on Facebook.
In regard to adaptation to new customer needs, Meliá Hotels International continues to enhance the positioning and differentiation of its seven hotel brands through innovation in the design of new experiences and product diversification to meet the needs of different market segments. Summer 2011 introduced successful formulas such as “adults only" or hotels aimed at families with children, with the introduction of entertainment based on the children’s TV series "Lazy Town" joining the traditional "Flintstones" hotel programme.
ME London and Paradisus Playa del Carmen, two great short-term bets
Meliá Hotels International is nearing completion of two major owned hotel projects to open in the short term: the Paradisus Playa del Carmen development with two luxury beachfront resorts with a total of 906 rooms, and the impressive ME London hotel designed by Foster & Partners which will open for the 2012 Olympics.
Thanks to their size, strategic nature, and market positioning, both projects will become major contributors to company EBITDA once they are in full operation.
Both for the completion of these investments and for daily company operations, Meliá Hotels International is proud to enjoy significant confidence from the markets and financial institutions, generated by assurances about the refinancing of its most important debt repayment commitments and its comfortable liquidity situation in general.
Regarding sustainability, Meliá Hotels International has reviewed the results of its energy saving project, SAVE, which has allowed reductions of 3.7% in CO2 emissions per stay and a saving of 7.7% in water consumption for the period 2007-2010. The company is particularly proud of the progress made in raising awareness amongst customers, which also resulted in cost savings estimated at around 3 million euros. In this sense, the hotel company continues to emphasise the strategic nature of its commitment to sustainable tourism, through a strong corporate commitment to social, economic and environmental sustainability.
In regard to commitment to the communities in which the company operates, the company highlights the innovative medium-term project recently presented for the creation of a major resort in Magalluf, in the municipality of Calvia, through the integration of 6 hotels the company owns together with investment partners in the area. Through close collaboration with the municipal authorities and regional government, which has declared the project of "Autonomic Interest", Meliá Hotels International intends to act as a catalyst for new public and private investment in the destination, converting and revaluing a tourist region which has been in rapid decline, and thus creating the conditions for a new model of more sustainable and less seasonal tourism which adds more value to the destination.
Among recent awards received, the hotel company highlights the "European Hospitality" award received by the Chairman and founder, Gabriel Escarrer, for Lifetime Achievements in the tourism industry. Escarrer was also selected as a member of the exclusive "Hall of Fame" of the British Travel Industry and the "Hall of Honour" at the University of Houston (USA) after 56 years of dedication.