in Spain and the Caribbean;
Reports Profit of 65 million Euros
Palma de Mallorca, 11 November 2004.- Sol Meliá today presented financial results for the hotel chain at the close of the third quarter of the financial year showing an increase in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) of 7%. The figures confirm the positive evolution of the hotel company performance after EBITDA growth in successive quarters. The figures are in line with market expectations for the ninth successive quarter.
In spite of difficult trading conditions, the summer season contributed to a RevPar increase of 2.5% (+4.0% in the third quarter itself) in the resort hotel market, thanks in part to the positive results obtained from the Spanish market, Sol Meliá’s leadership position in that market, strong growth in sales through solmelia.com and a positive performance in the Balearic Islands and Alicante. The Canary Islands also saw visitor numbers increase, in contrast to the lower than normal levels seen in the first half of the year. These factors contributed to the company achieving results in excess of those of competitors.
Caribbean destinations such as Cancun, Puerto Vallarta, the Riviera Maya, Cuba and the Dominican Republic have benefited from Sol Meliá brand recognition and product quality, with a focus on group and incentive business also strengthening the business. The appreciation of the euro with respect to the US dollar has also favoured greater European travel to the mentioned destinations.
A strong recovery in major European cities contrasts with a weaker performance in Spanish cities. Hotels in London and Paris saw RevPar increases of 34 % and 10% respectively to the end of September. City hotels in Spain, however, saw a 4.9% decrease in RevPar, mainly due to the increase in hotel supply that has occurred over the period. This decrease, however, was substantially less than that of other competing hotel chains thanks to the advantages of greater brand recognition, recently renovated products and proprietary distribution channels.
With regard to distribution, solmelia.com now generates 24% of the total revenues of the central reservation systems (14% in September 2003) and 88% of the total Internet revenues. This growth has largely been due to general improvements made to the site, growth in the number of newsletter subscriptions (currently 650,000), personalised campaigns, the simplification of the booking process and the launch of corporate promotions such as a 2 nights for the price of 1 deal, the Wednesday Web Weekends programme, a Uniform Rate Plan, etc. Solmelia.com is currently available in 6 languages and has recently launched versions for the Mexican and Brazilian markets.
The strategic agreements signed in 2003, including timeshare and distribution with Cendant Corporation; online distribution with Lastminute.com, hotels development with Hard Rock and Flintstone Hotels with the Rank Group and Warner Bros. Consumer Products respectively, are beginning to generate positive results in 2004. The Sol Meliá organisational structure has also been strengthened in the Food and Beverage, Timeshare and Asset Management areas to provide an extra impulse to those strategic activities.
Sol Meliá and Hard Rock Cafe International reached an agreement to develop and manage the Paramount Hotel (New York). Located in the popular Times Square, the hotel is the third project for the joint venture created by the two companies in 2003, the other two being the Hard Rock Hotel Chicago, recently awarded “Four Diamonds” certification by the American Automobile Association, and the Hard Rock Hotel San Diego, scheduled to open in 2006. A fourth project will shortly begin development in Spain.
During the first nine months of 2004, the “Sol Meliá Vacation Club” timeshare operation increased sales by 140 % in Cancun and Puerto Vallarta in Mexico and in Punta Cana in the Dominican Republic. The company expects further growth and more projects to be developed in 2005 in both the Caribbean and Spain.
Finally, as part of the non-strategic asset rotation programme, Sol Meliá sold the Tryp Caballo Blanco (Cadiz, Spain) generating 6.1 million euros in revenues on the asset sale with the company retaining a management contract with the hotel.
Consolidated income statement - 3rd quarter
Hotels open at 30 Sep 04 331 81,366
Corporate Communications Manager
The Sol Group Corporation
A subsidiary of Sol Meliá, S.A.
800 Brickell Ave., Suite 1000 Miami, FL. 33131
Ph: (305) 350-9828 ext 222 Fax: (305) 350-9960
|Also See:||Sol Melia Hotels & Resorts’ Properties in Dominican Republic and Puerto Rico Escape Major Damage / September 2004|
|Sol Melia Invests $140 million in New Paradisus Resort, Puerto Rico / January 2004|