Meliá Hotels Reports 14 Percent Decline in Property Assets

After recently reporting a rise in the company’s hotel earnings, Meliá Hotels International reported a new valuation of its property assets made by Jones Lang LaSalle Hotels, which results in a gross value of 3.31 billion euros, 3.16 billion of which relate to hotel assets.

Meliá Hotels International currently has a portfolio of 90 owned hotels and 13 other assets that have been valued by the international team of Jones Lang LaSalle Hotels, coordinated out of Madrid and supported by offices in Paris, London, Milan, Sao Paulo and Miami.

With regard to the valuation made in 2007, the principal difference is that in addition to the above-mentioned assets, the 2007 figures also included the valuation of the hotel brands and the contracts for hotels operated lease, management and franchise agreements.

With respect to the 2007 valuation, the company had suffered a decrease in the total value of its assets of 14 percent on a comparable basis mainly due to decline in the value of its property in Spain as a result of the economic crisis that has led to falling prices for real estate assets.

The decrease is in line with the discounts observed in recent asset rotation activity. The result of this evaluation represents a revaluation of 61 percent over the asset book value. The company has shown itself to be very conservative in its asset management, given that the value of its assets on the company balance sheet is made at historical prices, not adjusted to reflect the valuations made in 2007 and 2011. The decline in Spain has been partially offset by the improved valuation of assets in Latin America and the rest of Europe.