NH Hotels Unveils Major Expansion Plan for Europe, Latin America

Spanish company NH Hotels has presented a three-year plan for doubling its results which will involve capital expenditures totaling 1,300 billion euros.

By embarking on this ambitious development plan, NH Hotels expects to double its operating income (EBITDA) from its hotel business, to above 300 million euros in 2009.

The expansion plan envisages integrating Jolly and Framon, two hotel chains that have recently been added to the company, into its Italian Business Unit. This will involve an outlay of over euros 700M in capital expenditure and debt taken on.

The company also plans a further 100 million euros in capital expenditure for renovating the Italian chains to convert them into the NH Hotels standards.

The target set by the company for its Italian Business Unit will lead to a double its current results by the end of 2009, improving the operating efficiency of the hotels that have been acquired.

A major feature of Jolly Hotels and Framon is that the two companies are complementary with NH Hotels as far as customer profile, services on offer, strategic urban locations and broad geographical cover.

NH Hotels plans to strengthen its position as leader in the medium price range segment in Europe by focusing its capital expenditure on growing organically in the major markets on the continent where it already has a well-entrenched presence.

The group plans to invest 500 million euros in Europe, based on the company’s position as a reference in the major countries where it operates and making the most of the promising prospects for the economy for the coming years.

The target set by NH Hotels, to have more than 70,000 rooms by the end of 2009, will consolidate its position as the leader in the European hotel middle segment.

The growth plan for Latin America focuses mainly on increasing the number of rooms in the capital of Argentina and the major cities in Mexico, as well as continuing to study other interesting markets such as Chile, Colombia and Peru.

In the holiday segment, where NH currently has a number of projects under development in Cap Cana (the Dominican Republic) and Riviera Maya (Mexico), the company plans to build on its growth by making a limited investment of no more than 3 percent of the total capital expenditure of the plan by 2009.

The company has approved a euros 250 million capital increase to finance the plan, in addition to the funds that will be generated by its own cash flow.