Meli Hotels Resuls

First Quarter Results 2016 Meliá Hotel Earnings Up 38%

Primarily due to the business performance in the Canary Islands and Mediterranean, with a 21% increase in Average Room Rates in Spanish hotels

Meli Hotels

Business performance:

  • Net Profit increased by 38% and total revenues by 8%
  • Global RevPAR improved by 10.7%, 80% of which is due to price increases
  • The Mediterranean region led growth, with a remarkable performance from the Canary Islands, followed by Spanish cities, Italy and Germany.
  • Operating profit before rentals improved by 9%

Financial results:

  • Financial results improved by 28% thanks to a decrease in average interest rates and lower gross debt
  • Net debt increased by 1,6%, although the March figure does not yet reflect the impact of the early amortization of the convertible bond
  • Financial expenses were reduced by 19,45%

Expansion and new openings:

  • Meliá signed 7 new hotels in the quarter and aims to sign 20 to 25 new contracts for the full year (one signature every two weeks).
  • In the first quarter the Group has opened important hotels such as the Innside New York Nomad, the Sol Costa Atlantis, and the Meliá Braco Village in Jamaica
  • The Company is preparing the opening of approximately 20 more new hotels in 2016

Progress in digitalisation:

  • increased sales by 40% in the quarter, higher than the historic trend of 25% per year
  • Successful digital strategy in Mediterranean resorts, where is growing by 80%

Brand strategy, promoting the personalization of the customer value proposition, also favours bookings via online channels.

Gabriel Escarrer Jaume, Vice Chairman and CEO of Meliá Hotels International: "The first quarter points towards an extraordinary season in resorts and is also very positive for city hotels in Spain. We must take this opportunity to continue to push for qualitative improvements and an increase in profitability. In financial terms we continue to improve our financial management, and together with the successful conversion (99.96% acceptance) of the recent €250mn bond, this allows us to face future challenges from a position of greater financial strength, also enabling us to improve our bottom line by considerably reducing our financial expenses. "

Meliá Hotels International earned 22.3 million euros in the first quarter of 2016, 38% more than in the same period in 2015. Revenues (€398.9m) increased by 8% and Ebitda improved by 5%, equivalent to 9% before rental charges, given that the first quarter saw a major jump in rental expenses due to new hotels like the Melia Paris la Defense, the Innside Manchester, and the Innside New York, which are still yet to be consolidated in terms of profitability.

The Company makes a special mention of global RevPAR, which increased by a more than healthy 10.7%. Spanish hotels in general, that improved RevPAR by 21%, while resorts in the Mediterranean saw an increase of 46%.

Among the reasons for this positive performance in a quarter which traditionally generates lower cash flow, the Company highlights:

  • Improving domestic demand in Spain from families, business travellers and the MICE segment
  • The Meliá product renovation and repositioning strategy and its expertise in managing “bleisure” hotels (combination of experiences for business and leisure guests)
  • The successful Company commitment to premium products in cities and resorts such as the Gran Melia Palacio de Isora or the Gran Melia Colon
  • The unfortunate social and political situation in alternative destinations such as North Africa, with a positive impact on demand for the Canary Islands

For 2016, the Company maintains its estimate of a high single-digit increase in RevPAR, based on the excellent performance expected from Mediterranean resorts, including the Canary Islands, and also on the boom in “bleisure” hotels. The Company also expects positive trends in domestic demand in Spain and a generally favourable trend in European cities, even though there will be some challenges.



Although RevPAR in the region saw a slight decline (-1%) due to external factors unrelated to hotel operations, Meliá Hotels International managed to overcome the difficulties and generate an increase of 2% in consolidated revenues in the region.

There was also positive news regarding Average Room Rates, partly due to the 32% increase in sales through, as well as the excellent start for the Innside New York Nomad, with 100% occupancy at the weekends in spite of only opening one month ago, and the reopening of the ME Cabo Hotel, now renovated and fully operational, one year after suffering the effects of hurricane Odile.

The performance of the resorts in Mexico and the Dominican Republic remained at the same levels as in 2015, after impacts caused by the Zika virus, the depreciation of the Canadian dollar, unfavourable weather, and high inflation in Venezuela. The Company does not expect significant improvements in the offseason, although it will build on its competitive strengths in the Groups segment, especially in Cancun and Riviera Maya. There are also positive expectations for recently-opened hotels such as the Meliá Braco Village in Jamaica and the Innside New York, as well as the upcoming opening of the ME Miami and the Melia Costa Hollywood in the United States, and the Meliá Cartagena in Colombia.

EMEA (includes Premium hotels in Spain) 

Germany saw a strong performance, with very positive results from numerous hotels, particularly the Innside Wolfsburg, Innside Dresden and Innside Dusseldorf Derendorf, coinciding with the busiest year in the decade for Trade Fairs (193 days compared to 128 in 2015).

Italy saw the strongest trend in prices, although the comparison with 2015 is not very favourable due to the hosting of Expo 2015 in Milan and other business events in Rome last year. The Company expects a positive second quarter, coinciding with the Champions League final in Milan and the beginning of the high season in Rome.

France and the United Kingdom have suffered more than other European countries from the effects of the terrorist attacks in the French capital, both in leisure-focused hotels and in hotels for business travellers and groups. With the Euroleague acting as a turning point, the contagion effect tends to fade and Paris shows a significant recovery in the second quarter.

Spain saw a satisfactory increase of 21% in RevPAR compared to the first quarter of 2015. Highlights include the performance of the Gran Melia Colon in Seville, beating the positive figures of the previous year, and the progress which the Gran Melia Palacio de Isora continues to make, with high expectations for the coming months.

In 2016, 4 new hotels will open in the EMEA region: the Sol House Taghazout in Morocco, and the Innside Frankfurt, Innside Leipzig and Innside Aachen in Germany. The Gran Melia de Mar in Mallorca and the Gran Melia Palacio de los Duques in Madrid (previously the Ambassador Hotel) will reopen after rebranding.


In the first quarter, 60% of revenues for the region were generated in the Canary Islands, a destination where demand continues to grow as a result of the difficult situation affecting other destinations in the area such as northern Africa. Meliá hotels also saw an improvement in prices thanks to the important contribution of sales through and a distribution model that generates improved margins.

For the second and third quarters, the major feeder markets all show improvements over 2015, with double-digit increases in bookings. With regard to destinations, the company is particularly optimistic about the Balearic Islands, where hotel renovations and repositioning will allow them to benefit from better customer targeting and improved market conditions. In Mallorca, the Melia Antillas Calvià Beach will make its debut, a splendid hotel which closes off the "Golden Mile" on the renewed beach in Magaluf, and the Sol House Ibiza and Sol House Mallorca MIxed by Ibiza Rocks will also be opening, the product of an innovative partnership which combines the hotels with the musical concepts of Ibiza Rocks.

In 2016 a new hotel will be added to the Mediterranean region: the Meliá Llana, in Cape Verde

SPAIN (city hotels) 

By region, highlights included improved rates in Madrid, which are now only 5 to 10% below the record levels seen in 2007, due to an increase in individual travel brought about by plus the positive impact of the business generated by the airport. Northern Spain also recorded significant growth, centred on the Melia Bilbao, Meliá Zaragoza and Meliá María Pita (A Coruña), and largely linked to the business travel and MICE segments. The cities in southern Spain also noted improvements over 2015, benefiting from the early Easter holiday and greater group business, with the only negative note being the late arrival of the snow for the ski resorts, especially in Granada. Finally, the city hotels on the Spanish east coast recorded the highest increases in rates over the previous year, in line with the policies on qualitative improvement in Company revenues.

Despite the early arrival this year, Easter 2016 saw Average Room Rates increase by 16% over the previous year, and in the second quarter there are major sporting events, conferences and concerts planned in Madrid, together with excellent prospects for the east of Spain (Valencia, Catalonia and Mallorca).

The Company also notes that increased sales by 30% in the quarter, with 80% of the bookings made by members of the MeliaRewards loyalty programme.


Total revenues for Meliá Cuba increased by 9.2% compared to 2015, reaching $170,3mn. RevPAR also saw a healthy 9.4% increase, mainly due to price improvements. Hotels in Havana (especially the Meliá Cohiba and Meliá Habana, both market leaders) improved average room rates by more than €60 due to increasing demand.

Meliá forecasts a double-digit increase in RevPAR for the hotels in Cuba, due to both the increasing arrivals of American travellers, as well as Havana having become a fashionable destination for events and corporate activities.

Cuba is the third largest country for the Company in terms of number of hotels, and with 29 hotels in operation and 3 in the pipeline, Meliá will operate 32 hotels with 15,000 rooms in the country by 2018.


The fall in domestic demand due to significant political and economic uncertainty is affecting the hotel industry in general and Meliá in particular, due to the fact that the Company mainly operates city hotels and has a high exposure to the business travel segment.

Among the strengths, in addition to an exchange rate that favours exports, the Company is confident that the Olympics will improve results, especially affecting the spectacular Gran Melia Nacional Rio, which will be partially operational during the Olympics. Meliá is working on an Action Plan to attract alternative feeder markets to complement the domestic market, such as Latin America, Europe or the United States, as well as future openings in leisure and vacation destinations such as Rio de Janeiro and Recife, which will help better balance the portfolio in the country.


With every one of the hotels in the region operated under management agreements, the Meliá hotels in Asia Pacific increased RevPAR by 9.1%, led by the hotels added recently and affected by changes in exchange rates. One of the most important strengths with regard to future performance is the fact that most of the hotel portfolio has been renovated in recent times.

Indonesia, the leading resort destination in Asia with the highest number of hotel rooms in the region, suffered a negative impact from the bombing in Jakarta in January 2016, but quickly recovered. Indonesia is one of the key markets for Meliá, where it already operates 4 hotels and has 11 more signed and in the process of opening.

China has enormous potential, both to become the leading feeder market in the world for Meliá hotels in other regions, and also for Company resorts in the region itself, in countries such as Vietnam or Indonesia. In 2016 Meliá has launched its “Peng-You” programme to adapt to and welcome Chinese guests, while the Meliá Jinan and Gran Meliá Xian continue to improve their market positioning. In Malaysia demand has recovered after the crash in 2014, and Meliá continues to successfully manage the Melia Kuala Lumpur. In Vietnam the Company already manages a city hotel, the Melia Hanoi, and a resort hotel on a paradise beach, the Meliá Danang, and it is also preparing the opening this summer of the new Sol Beach House Phu Quoc. Finally, the Company recently made its debut in Thailand with the signing of a strategic agreement with TCC Land Asset World, and is already operating the Sol The Imperial Boat House Beach Hotel and preparing to open at least two additional hotels in the next three years .

For Meliá Hotels International, Asia Pacific represents a future of sustainable long-term growth. A region in which to assert our competitive advantages and our management ability, and continue to deepen our diversification and the increased profitability of our hotels. Meliá now has 32 hotels in the region with almost 8,100 rooms either in operation or in the pipeline, and expects to grow at a rate of not less than 10 hotels per year. For the remainder of 2016 the Company will open 7 new hotels: 3 in Indonesia, 2 in China, 1 in Vietnam, and 1 in Myanmar.

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