SOURCE: Melia Hotels International

Melia Hotels International

June 27, 2016 16:03 ET

Melia Hotels International Holds General Shareholders' Meeting to Discuss 2016 Accomplishments and Future Strategic Priorities

PALMA DE MALLORCA, SPAIN--(Marketwired - June 27, 2016) - Meliá Hotels International held its General Shareholders' Meeting today, chaired by Gabriel Escarrer Juliá, who took the opportunity on the 60th anniversary of the brand to offer his vision of the past, present, and future of the hotel company. Escarrer began by highlighting the role of Meliá in the history of international tourism over the last six decades, and specifically thanked Meliá shareholders for their support in a year which also marks the 20th anniversary of the MHI's IPO.

"In 60 years we have grown from a small company to a multinational group with nearly 100,000 rooms in 43 countries, but we have never lost our family spirit nor our values," said Gabriel Escarrer, Chairman and CEO of Meliá Hotels International. It is precisely thanks to these values, and a united and talented team, that we have been able to achieve responsible and sustainable growth and maintain our global leadership

During his speech, Escarrer focused heavily on the future, presenting the current strengths of Meliá and the competitive advantages on which they thrive on. He also explained the current strategic priorities and the process of cultural transformation which, Escarrer hope will allow the brand to look forward to another 60 very promising years.

Current strengths and leadership

Escarrer began by reviewing the results for 2015, a year in which Meliá left the crisis years behind and reaped the benefits of its efforts and successful strategy: a 16% increase in global revenues, which rose to more than EUR 2,900 million, and a 29% increase in Ebitda, with profit before tax of EUR 101.6 million and EUR 40.5 million in net profit.

In 2015, Meliá also achieved its objectives of reducing net debt, which fell by more than EUR 200 million, and also in asset management, generating over EUR 200 million from hotel sales while retaining the management of all the hotels sold. Escarrer also stressed the commitment to renovation and repositioning, investing EUR 78 million in 2015, with the repositioned hotels achieving an average increase of 30% in average room rates in the first season after their reform.

With regard to the share performance over the year, the Escarrer explained that the Meliá Hotels International share price rose by 37%, compared with an average reduction in the IBEX index of 7%. He also expressed his satisfaction with the recent early repayment of the Convertible Bond which was due in 2018, for which almost all of the bondholders applied for conversion into shares, with the Company carrying out a capital increase of 13.34%.

Regarding the performance of the hotel business, Escarrer recalled the 15.1% increase in revenue per available room (after 23 consecutive quarters of growth), the 28% increase in sales through melia.com, and the 5 million members now registered with the MeliaRewards loyalty programme, among other data.

But above all, Escarrer was most enthusiastic about the international expansion of the Company, "a fundamental basis of its strength," which in 2015 allowed the Company to add 25 new hotels, and in 2016 will be reflected in the opening of 24 more new hotels. He also remembered with emotion the Meliá commitment to Cuba, where Escarrer signed the first international hotel management in the 1990s, and where the Company today enjoys a significant presence and market leadership in cooperation with its Cuban partners.

Competitive advantages

For the Chairman and founder of Meliá, the results and positioning of Meliá Hotels International after its first 60 years have been achieved through the following differential factors or competitive advantages:

  1. The early globalization of the Company which is now very well established
  2. A highly diversified business model (not only geographically, but also between owned-managed hotels, city-resort hotels, etc.)
  3. A broad portfolio of brands for different market segments and categories
  4. A corporate governance model that combines the rigor and transparency of listed companies with family business values.
  5. Corporate values, especially constant innovation, and
  6. Corporate social responsibility, guided by the desire to build a legacy focused on protecting and supporting children, sustainable tourism and the environment.

Facing the future with confidence

Escarrer devoted much of his presentation to discussing how the Company is preparing for the future, both with regard to strategy and the cultural transformation required to implement it. According to the Chairman, the new Meliá Strategic Plan focuses on enhancing the Company's brands, digitalisation, selective growth in key markets, talent management and a global and efficient organizational structure, always ensuring the quality and value of assets, and a consistent financial model which is robust when faced with risks and business cycles.

The basis for the cultural transformation of Meliá, according to its Chairman, will result in a Company which is:

1. More global (80% of operating revenues is already generated outside Spain)

2. Bigger but less "proprietary", with growth based on low capital-intensive formulas and focusing on our excellence as hotel managers.

3. More digital in our processes, sales and relations with customers and other stakeholders.

4. More decentralized and "glocal" with a more agile organization which is closer to each market

5. With better segmentation and more focused on the personalization of the customer experience thanks to the focus on priority brands.

Escarrer ended by stating that his company is fully prepared to achieve swift and strategic growth anywhere in the world, to meet the diverse and changing expectations of customers, and to face the challenges of a variable international environment, all thanks to a business model which is less capital intensive and less "bricks and mortar".

Expressing his gratitude for the responsibility, commitment and independence of the Board of Directors, and the professionalism and dedication of the management team led by the Vice Chairman and CEO, Gabriel Escarrer Jaume, the Chairman of Meliá made an endearing dedication "to Melia shareholders for continuing to form part of the history of the Company" while assuring them that "the best is yet to come."

As expected, the General Shareholders' Meeting was attended by the required quorum and proceeded to approve all of the proposals set forth in the agenda.

About Meliá Hotels International
Founded in 1956 in Palma de Mallorca (Spain), Meliá Hotels International is one of the largest hotel companies worldwide as well as the absolute leader within the Spanish market, with more than 370 hotels (current portfolio and pipeline) throughout more than 40 countries and 4 continents under the brands: Gran Meliá, Meliá Hotels & Resorts, Paradisus Resorts, ME by Meliá, Innside by Meliá, Tryp by Wyndham and Sol Hoteles. The strategic focus on international growth has allowed Meliá Hotels International to be the first Spanish hotel company with presence in key markets such as China, the Arabian Gulf or the US, as well as maintaining its leadership in traditional markets such as Europe, Latin America or the Caribbean. Its high degree of globalization, a diversified business model, the consistent growth plan supported by strategic alliances with major investors and its commitment to responsible tourism are the major strengths of Meliá Hotels International, being the Spanish Hotel leader in Corporate Reputation (Merco Ranking) and one of the most attractive to work worldwide.

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