Melia Hotels Reports 10 Percent Increase in Quarterly RevPAR

Melia Hotels Reports 10 Percent Increase in Quarterly RevPAR
By Kerry Medina

Meliá Hotels International reported results for the first nine months of 2011, a period during which the company increased its accumulated RevPAR (revenue per available room) by 9.3 percent, in a scenario dominated by a recovery in prices and high occupancy rates.

For the third quarter, the company highlights the dramatic increase in RevPAR of 15.8 percent in Spanish resort hotels, notably in the Balearic and Canary Islands, resulting in an average increase of 10 percent, which confirms the trend observed during the first half of the year.

The slight decline in revenue (down 0.7 percent) and reduction in EBITDA (down 18.3 percent) compared to the first nine months of 2010 are due to lower capital gains, 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 nine months of 2011 would have increased by 5.6 percent to the earnings reported in 2010, and EBITDA would have shown an increase of 14 percent, 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 travelers 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 for the first quarter of 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 percent of Meliá Hotels International’s portfolio. The company reaffirms its commitment to reduce its net debt by the end of 2011 to less than 1 billion euros, announcing that they are currently in the process of revaluing the company' assets.

In recent years, globalization has been a strategic focus for Meliá Hotels International, and during the first nine 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 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 percent of the total portfolio.