Sol Meliá puts all its eggs in Europe’s basket

Tough, tense, dramatic and spooky. Sol Meliá could perfectly splay any of these adjectives on last year’s farewell ribbon. But it might as well say that it never took a break all trough 2002 and put out all the stops to remain as the leading hotel chain both in Spain and Latin America.

Until the first half of the past year, the Majorca-based company had scored notorious losses. Its gross revenues plunged 92 percent and pushed the most dramatic drop ever for a Spanish leisure-industry firm at the Madrid Stock Exchange. Sol Meliá’s stocks dipped a walloping 55.85 percent in 2002 down to 3.77 euros a share, according to IBLNews. Fortunately, the yearend figures took a second wind and plummeting revenues by the end of the third quarter were not as far-reaching as in the first half of the year.

In its effort to weather the storm, the company held on to a diehard investment policy and opened more than 30 new hotels, especially in the Old World. There’s no doubt that its presence in the European market is strategic amid great geopolitical strains –the threat of a war in Iraq is way too worrisome. Vacationers are moving to closer-to-home destinations and Europe is, by a long shot, the top tourist sender.

However, the company execs have rushed to warn that Cuba is high on their list of top priorities. The Cuban keys are “a stronghold Sol Meliá is fully committed to regardless of the addition of new destinations in the tourist-sending markets,” says Francisco Camps, head of Sol Meliá’s Operation and Development Department on the island nation. “Cuba’s safety and security are two of the major incentives the country has to offer, besides its culture, its history and its people,” Mr. Camps added during the grand opening of the Sol Pelicano Hotel on Cayo Largo del Sur, the chain’s 24th establishment on the Cuban archipelago.

The company has plentiful reasons to pin its hopes on the Caribbean. In the course of 2002, the Dominican Republic was another destination that went to bat for Sol Meliá, financially speaking.

With more than 350 hotels and a grand total of 88,686 rooms distributed in 30 countries over four continents, Sol Meliá is the leading hotel chain in Spain, Latin America and the Caribbean, the third such company in Europe and the world’s tenth largest. And it’s willing to stand up for it.