Meliá earns 24.7% less in the first half

Meliá Hotels International recorded a net profit of 43.5 million euros during the first half of 2018, a figure 24.7% lower than that reached in the same period of 2018, the hotel chain informed the National Market Commission of Securities (CNMV).

From January to June, the turnover reached 869.3 million euros, 1.1% less%, although revenues without capital gains increase by 0.3%.

Gross operating profit (Ebitda) was 216.8 million euros, 0.7% less compared to the first half of last year. On the other hand, the result before interest and taxes (Ebit) was 21.8% lower, from a total of 89.4 million.

The profit per available room (RevPAR) grew by 0.4% despite the “different challenges” faced in this period, as detailed by the company.

Regarding the financial management of the company, the reduction of debt by 32.9 million euros in the semester, to 585.7 million euros, stands out.

The company, which has a portfolio of around 63 hotels totaling 83,000 rooms, has opened a total of five hotels this year.

The company’s vice president and CEO, Gabriel Escarrer, stressed that during these six months the tourism industry has encountered a “challenging competitive environment” in which “various factors” beyond its control have added pressure to the business model , “mainly to those who historically have been the most profitable”.

Specifically, Escarrer has referred to certain problems such as sargassum on the beaches, “smear campaigns” that created “noise and uncertainty” among visitors, the recovery of alternative destinations and the fall in the air capacity of some Spanish destinations.

BY REGIONS

Meliá’s operations in America have been affected by the situation in the Dominican Republic, especially in Punta Cana, due to the “noise generated by the United States press as a result of the deaths of American tourists due to various causes,” which caused cancellations that affected hotels in the country, especially in June. In addition, highlights the problem of sargassum in Mexico. Consequently, the region suffered a 5.2% decline in RevPAR, although the average price per room increased 9.2%.

In the Europe Middle East and Africa area, Meliá hotels have registered a positive evolution in all countries, with an average RevPAR increase of 2.8%.

The hotels in Spain were impacted by the seasonal effect of Holy Week, which affected the resorts and occupancy rates, although the occupation of the hotels on the coast offset the falls registered in the Canary Islands and the Balearic Islands due to the reduction in air capacity and competition from alternative destinations. RevPAR in Spain grew by 1.25% in these six months.

Asia Pacific recorded mixed results in the period due to various aspects that affected operations in the region, with a 5.5% increase in RevPAR.

In Cuba, on the other hand, this indicator decreased by 10.6% as a result of the deaths of several tourists and the bad relations between the governments of the island and the United States, which have caused the prohibition of country cruises and has eliminated travel licenses for US citizens from ‘town to town’.

GROWTH OF REVPAR DE DIGITO BAJO

For the rest of the year, the company expects a low-digit RevPAR growth, explained by price increases, and will focus on improving the margin at the Ebitda level.

In Spain, the group has positive expectations for urban hotels in Madrid and Barcelona, ​​but maintains uncertainty about the resorts of the Canary Islands and the Balearic Islands, as well as in America.

In addition, they have expressed their “firm commitment” to maintain a “robust financial situation” for the coming years in terms of Net Debt / Ebitda.

For the third quarter, it foresees a positive evolution, since it coincides with the high season, the strongest period for the Group. So far Meliá registers a 4.7% increase in sales already closed for this summer season and hopes to improve the 2017 figures in Spanish resorts.

They also expect improvements in margins due to higher efficiencies, the contribution of hotels in the launch phase and the increasing positioning in the premium segment.