Sol Meliá Keeps Growing, Beefs Up Presence in the German Market

The Spanish hotel chain Sol Meliá announced financial results for the first nine months of the year which show an increase of 16.1 percent in net profits to 141.9 million euros, and also announced the purchase of the German hotel chain Innside and its portfolio of 12 leased hotels, of which 8 are currently in operation in Berlin, Munich, Frankfurt, Düsseldorf and Bremen. The other four hotels will be added between 2008 and 2010 in Vienna, Berlin, Dresden and Düsseldorf.

This strategic acquisition allows Sol Meliá to significantly increase its presence in Germany, its third most important feeder market and one of the strongest economies in Europe, from 16 to 28 hotels.

The portfolio will be strengthened not only in quantity, but also in quality. In line with the modern hospitality concepts pioneered by Sol Meliá, all of the hotels are new (none more than 5 years old) and located in the heart of the city centers, combining modern design, cutting-edge decoration and superior quality facilities and services.

The chain is perfectly aligned with the company strategy of increasing brand equity, and the incorporation of the highly experienced Innside management team within Sol Meliá also boosts the capitalization of the company through the promotion of talent throughout the organization.

In the first nine months of the year, Sol Meliá achieved revenues of 1,022.1 million euros, an increase of 6 percent over the same period in 2006, while EBITDA rose to 271.4 million euros, an increase of 2.3 percent. Net Profit grew by 16.1 percent to 142 million euros.

The key figures are significantly higher if asset rotations are excluded for the period, with revenues rising by 7.5 percent, EBITDA by 8.2 percent and Net Profit by 23.1 percent.

The positive results are explained by the chain as due to the strong summer season in Spanish mainland and Balearic Islands hotels, and the excellent performance in the Dominican Republic.

City hotels all over the world have also performed well all year, and excellent progress has been seen at Sol Meliá Vacation Club, where revenues have grown by 29 percent in the first nine months of the year leading to EBITDA growth of 51 percent.