Melia Hotels International Announces Positive Performance in First Quarter 2017

Indonesia becomes one of the main focuses in the company's expansion with three new openings this year

JAKARTA, May 25, 2017 /PRNewswire/ -- Spanish's leading hotel company, Melia Hotels International announces its financial achievements in the first quarter of 2017. The company generated EURO20.4 million in the first quarter in 2017, with total revenue of EURO420.3 million, increasing by 5% and EBITDA improved by 3%. This positive results also include strong performance according to the key performance indicator, Revenue Per Available Room (RevPAR), which increased by a healthy 8.3%.

Gabriel Escarrer Jaume, Vice President and Chief Executive Officer of Melia Hotels International stated that the company has achieved a significant increase seen by the RevPAR score in this year's first quarter, especially supported by the opening of new properties in several tourism destinations, such as Indonesia. "This will be the 27th consecutive quarter of growth. Melia Hotels International will continue to strengthen its products through extensive investments in the renovation and repositioning of hotels, and has added 15 new hotels in the year to date."

The Company announced an increase in shareholders' dividends, raising the pay-out to 30% in 2016, vs. 25% in 2015. A strong improvement is being generated from the opening of new hotels around the world, especially in the Asia Pacific region. "Two new hotels have been opened this year in China, in the cities of Shanghai and Zhengzhou, and we will open three more in Indonesia," adds Gabriel. " We also just signed 8 new hotels in Cuba, another area of special focus."

The results for the first quarter are influenced by the "Easter effect", which, as Easter falls in April this year, will have a positive impact in the second quarter. In spite of this, the revenues of owned and leased hotels plus the fees paid by managed hotels increased by EURO28.5 million compared to the same period in 2016. The company continues to achieve strong results from its digitalization strategy, where its most important direct sales channel,, increased sales in the quarter by 8.1%. Including April, the sales increase rose to 20% due to the "Easter Effect".

As much as 5 of the newest properties in the Asia Pacific region which are Melia Yangon, Melia Shanghai Hongqiao, Melia Makassar, Sol Beach House Phu Quoc and Sol House Bali Legian are expected to continue to increase their market penetration at the highest possible speed. Robust performance is seen in China thanks to the solidity of the business and the quality of the products that Melia operates in the country, and also in Vietnam, due to the persistent growth of Vietnam as a tourist destination. Indonesia has also become one of the developing markets, especially in the resort sector where Melia Hotels International owns 3 resort properties: Melia Bali, Sol Beach House Benoa and the newest addition to the line, Sol House Bali Legian, opening in the first quarter of 2017.

About Melia Hotels International

Founded in 1956 in Palma de Mallorca (Spain), Melia Hotels International is one of the largest hotel companies worldwide as well as the absolute leader within the Spanish market, with more than 370 hotels (current portfolio and pipeline) throughout more than 41 countries and 4 continents under the brands: Gran Melia Hotels & Resorts, Paradisus Resorts, ME by Melia, Melia Hotels & Resorts, Innside by Melia, Sol Hotels & Resorts and TRYP by Wyndham. The strategic focus on international growth has allowed Melia 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 globalization, 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 Melia Hotels International, being the Spanish Hotel leader in Corporate Reputation (Merco Ranking) and one of the most attractive to work worldwide. Melia Hotels International is included in the IBEX 35 Spanish stock market index. Follow Melia Hotels International on Twitter @MeliaHotelsInt and Facebook meliahotelsinternational.

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Fact Sheet

Business performance:

  • Total revenues increased by 5.4%
  • Global RevPAR grew by 8.3%, of which 83% can be explained by price increases
  • Growth continues in Spain, where hotels saw a 12.5% average increase in RevPAR over the period
  • Company EBITDA increased by 2.9%
  • Including April, increased sales by 20% over the previous year

Financial results:

  • Slight increase in debt compared to December 2016, now standing at EURO622 M
  • The Net Debt/EBITDA target ratio is maintained for the period between 2 and 2.5X
  • Reduction in bank financing of EURO6.6 M (-44.4%)
  • Reduction of average interest rate to 3.4%

International expansion:

  • To date, the company has signed 15 new hotels, all of them under management contracts
  • Melia announced the signing of 8 new hotels in Cuba, to open under its Melia, Sol by Melia, and INNSIDE by Melia brands on January 1, 2018
  • The company's pipeline stands at 65 hotels with 17,000 rooms at March 31
  • Two new hotels opened in Asia in the 1st quarter: Sol Bali Legian and Melia Shanghai Hongqiao
  • In Spain, the company opened two new hotels and signed two others over the period

Outlook 2017:

  • The forecasts for the year are generally positive
  • RevPAR growth is estimated at a medium to high single digit
  • The company reinforces its commitment to the growth, renovation and repositioning of hotels in Spain
  • Excellent performance and outlook for the Calvia Beach (Magaluf) project which adds new MICE facilities in the destination, and the new Palau de Congress Convention Centre and Palma Bay Hotel in Mallorca.

Source: Melia Hotels International