MELIÁ: ANNUAL RESULTS 2023
Meliá earned €130 million (+8.3% vs. 2022) and recorded revenues of €1,928.8 million (+14.8%), consolidating the positive trend in occupancy and average rate, thanks to its brands and digital strength. |
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MELIÁ: ANNUAL RESULTS 2023
Meliá earned €130 million (+8.3% vs. 2022) and recorded revenues of €1,928.8 million (+14.8%), consolidating the positive trend in occupancy and average rate, thanks to its brands and digital strength. |
Catégorie : Monde - Économie du secteur
- Chiffres et études
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The Group's EBITDA, excluding capital gains, was €486.5 million (+16.2%)
Particularly positive performance in the fourth quarter, with the upward trend in demand continuing from previous quarters
Following its recent agreement with Banco Santander, Meliá will prioritize strengthening its balance sheet to return to pre-pandemic levels
Excellent outlook for Easter and summer as all outbound markets stabilize, and bookings are anticipated to increase
The portfolio expanded with the signing of 26 new hotels and the opening of 12 new properties
Gabriel Escarrer, Chairman & CEO:
"2023 marks a successful year for Meliá's hotel business, propelled by robust demand which continues with the positive trajectory observed since 2022. The favorable tailwinds of international tourism demand undeniably contributed to the achievement of the annual results we are presenting, further supported by a rigorous strategic roadmap prioritizing the quantitative and qualitative growth of our portfolio, and enhancing the efficiency of our management. This focus has enabled us to sustain our margins despite the inflationary context, and to reinforce our position among the leading companies in sustainability in the Hotels & Cruises sector, as recognized by the prestigious S&P's Global ranking.
These results solidify the recovery curve initiated in 2022, laying the foundation for the continued improvement we also expect to see throughout the current year, as, according to our estimates and booking indicators, 2024 will maintain the upward trend in our business. We plan to leverage this situation to strengthen our balance sheet, returning it to the healthy levels of debt and value generation witnessed prior to the pandemic. Jointly with other key value creation levers we are focusing on, such as cash generation, qualitative portfolio expansion, and improvements in operating efficiency, last week we announced the issuance and subsequent subscription by Banco Santander of new shares in a subsidiary holding hotel assets, totaling €300 million.
In summary, the performance of our company in 2023 reinforces our confidence in the robust fundamentals of the tourism sector, whilst highlighting the need to continue capitalizing on our strengths and refining our strategy in order to become “bigger, more profitable, more sustainable and more efficient" as our 2024 vision states, positioning ourselves to lead the growth that our industry will show along the coming years".
In 2023, Meliá Hotels International's results showcased complete operational normality. Coupled with robust demand, the Group surpassed the revenue figure (excluding capital gains) recorded in 2022 by +14.8%, and the 2019 figure by +7.8%, reaching a total of €1,928.8 million. This positive performance was evident across all divisions, contributing to a noteworthy improvement of +17.3% in the global Average Revenue Per Available Room (RevPAR).
Group EBITDA also exceeded market expectations, reaching €489.8 million (€486.5 million excluding capital gains). The Consolidated Profit also demonstrated an improvement of +8.3% compared to 2022 and was +6.9% higher than in 2019, amounting to €130.1 million.
Amidst a global increase in the prices of raw materials, energy, and other supplies, the company focused on capitalizing on strong demand to enhance operating efficiency, and despite the challenging environment, EBITDAR margins recovered to pre-pandemic levels. This achievements, attributed among other levers, to effective digitalization efforts and a stringent cost control policy, were compatible with improving customer and employee satisfaction rates.
Notably, the Group's luxury strategy played a crucial role in generating differential value. This strategy included the repositioning of the Paradisus brand and a substantial commitment to expanding Gran Meliá, ME by Meliá, and The Meliá Collection brands. The transformation of the hotel portfolio towards these luxury brands showcased the potential for improving RevPAR, with recorded increases in positioning and average rate. By the end of 2023, the average rate in luxury brands is projected to be 80% higher than in the rest of the brands.
Undoubtedly, one of the Company's standout business areas throughout the year was Congresses, Events, Conventions, and Incentives (MICE), accounting for 13.65% of the revenues of the hotels operated by the Group globally. When excluding holiday segment hotels with limited MICE activity, this contribution rises to 18%. The revenue from this segment experienced a remarkable increase of 37.78% compared to 2022 and a substantial growth of 30.1% compared to the pre-pandemic levels in 2019.
Breaking down the origin markets, Spain led with 31% of the total production, followed by the United States, Germany, the United Kingdom, and Mexico. Within the main sub-segments, 45% of the business originated from corporate meetings, 14% from Congresses and Events, and 7% from Incentives.
Looking ahead to 2024, the MICE segment bookings indicate a 14% increase compared to the same dates in the previous year. Noteworthy improvements are expected in the MICE business in urban hotels, with particular growth in markets such as Europe (increasing by 39%) and the Spanish market, showing a significant uptick at +17%. The company expresses confidence that the recently opened complex comprising the Palau de Congressos de Cataluña and Gran Meliá's Torre Melina hotel will provide a fresh impetus to its Congress business, particularly robust in Barcelona.
Meliá remains committed to optimizing its revenue through its own channels, currently directing 46% of centralized sales through Melia.com and other channels such as MeliáPro (B2B platform) or the Call Centre. The B2B channel, MeliáPro, which underwent renewal in 2023, experienced a notable increase in sales by +15.68% compared to the previous year, incorporating 6% more agencies as members of the platform. An additional pivotal driver of revenue and innovation is our Loyalty Programme, Melia Rewards, which celebrates its 30th anniversary in 2024. The program continues to enhance its knowledge and personalization of offers to customers, attracting new members daily. Melia Rewards, like other components of the Company, plays a fundamental role in our expansion process.
The "BeDigital360" digitalization roadmap has also empowered Meliá to advance in technology, and presently we boast a top-notch suite of solutions for efficiently managing our owned and third-party hotels. Our global technology approach accompanies the customer throughout their journey, offering a more efficient and digital relationship model wherever the customer requires it. This emphasis is particularly evident during their stay, providing a wide range of solutions to create a truly immersive hotel experience.
Financial Management
In financial matters, Meliá Hotels International maintained a robust performance, successfully reducing its post-IFRS net financial debt by €60 million. In recent months, the company has actively worked on the refinancing of its debt, aiming to extend maturities scheduled for 2024 and 2025. As of now, Meliá maintains liquidity in excess of €330 million.
In addition to generating operating cash and prioritizing the strengthening of its balance sheet while reducing financial leverage, the company is actively pursuing various strategies. This includes a recently announced transaction involving the issuance and subsequent subscription by Banco Santander of new shares in a subsidiary that owns hotel assets, totalling €300 million. Furthermore, concerning asset rotation, the Company received an advance of USD 30 million from a future partner, for the purchase of a stake in a hotel in Mexico, currently subject and conditioned to the approval of the Mexican competition authorities.
Expansion strategy
In 2023, Meliá's growth is intricately tied to our brand strategy, featuring significant advancements such as the consolidation of our unique luxury hotels' brand, Meliá Collection, with 8 hotels already in operation and 8 more slated to open in the future. The ZEL brand, created in collaboration with Rafael Nadal, made its debut and continues to expand its pipeline for the coming years. Additionally, we saw the much-anticipated arrival of the resort brand "Paradisus by Meliá" in Europe, with Paradisus Salinas Lanzarote and Paradisus Gran Canaria, both in the Canary Islands. 2024 marks a pivotal year for the ME brand as well, with planned openings of the hotels ME Malta, ME Sayulita, ME Guadalajara in Mexico, and ME Lisbon in Portugal.
Throughout 2023, the company signed agreements for a total of 26 new hotels, adding 4,465 new rooms, and opened another 12 hotels. Highlights include the Gran Meliá Palazzo Cordusio in Milan, the ZEL Mallorca hotel, Gran Meliá Nha Trang in Vietnam (our first Gran Meliá in Southeast Asia), and Innside Bangkok in Thailand. The company emphasizes its growth in destinations like Mexico, while also solidifying its presence in emerging holiday hotspots like Albania and Malta.
The Group's Luxury strategy has a positive impact on the portfolio's evolution, with luxury brands already representing 13.4% of operating hotels, and 35% of the expansion pipeline. These brands contributed 25% of total hotel revenues in 2023, and the luxury brands' portfolio experienced an impressive RevPAR increase of +18.3% in 2023 compared to 2022, and of +31.1% compared to 2019. Expectations include double-digit RevPAR growth in 2024. Thanks to this potential, combined with growing market demand and resilience to economic cycles, the Luxury strategy has solidified as a competitive strength, contributing to maintaining a more qualitative RevPAR.
Outlook 2024
Currently, demand remains robust, with On The Books sales showing a double-digit increase compared to the same period last year, sustaining the positive trend observed throughout 2023. This strong demand, combined with favorable weather conditions and our brand strategy, particularly in the Premium and Luxury segments, where many of our hotels have transitioned, enables us to expedite the opening of many Spanish holiday hotels this year. Whilst some hotels along the peninsular coast have remained operational throughout the winter, 16 hotels on the peninsular coasts and islands are set to open in early March.
Based on the On The Books sales, Easter 2024 is expected to see a 10% growth in revenue compared to the previous year. This growth is particularly noteworthy as the holidays fall in April, traditionally a more favorable period for travel consumption. The outlook includes a satisfactory evolution of the average rate, and the volume of bookings is anticipated to continue its upward trajectory. The extension of the holiday seasons not only positively impacts revenues but also enhances destination management, mitigating the negative effects of demand over-concentration in short periods. Additionally, the Company acknowledges an improvement in the attraction and retention of top talent by improving stability in our employee value proposition. Regarding forecasts in the MICE business, all the segments remain positive, building on the strong growth recorded in 2023 and the confirmed bookings for 2024 and 2025.
The initial months of 2024 align with forecasts, supporting the continuation of the strong recovery initiated in Chinese markets, which registered a remarkable 70% increase in travellers during the last "Golden Week" compared to the previous year. Southeast Asia sees strong demand for Bali, emphasizing the destination's experiential value, and positive developments in Vietnam, with bookings surpassing 2023 levels, especially in the MICE segment in Hanoi. Thailand shows signs of reactivated demand from the Chinese market, with the Direct Client and OTA segments standing out. Jointly with this boost in International demand, there is an uptick in outbound travel from Asian markets to the rest of the world.
As a result, the Company remains cautiously optimistic, supported by the bookings figures not only for the first quarter, but also very positive for Easter and the summer in all destinations, with an increasing return of early and medium-term bookings, as opposed to "last minute" bookings, which continue to be significant.
Together with the Average Rate component, -which according to the Group's estimates will continue to support RevPAR (Average Revenue per Room) growth in line with recent months- , the Company sees significant room for improvement in the occupancy factor, which closed 2022 4.3% lower than that recorded in 2019.
Hotel business: evolution and outlook (Q4/23 and Q1/24)
Spain: the evolution of urban and holiday hotels was positive in terms of both occupancy and rates, maintaining the upward trend recorded in previous quarters. Among the urban hotels, Seville (which benefited from the Latin Grammy Awards), and the booming Barcelona and Madrid stood out, followed by Valencia, Palma and Alicante, also in positive territory. In terms of segments, the strength of the direct client and in second place, the Tour Operation stood out, followed by the MICE segment and also Corporate (business travel) in strong recovery. For the coming months, urban hotels in bleisure (business + leisure) destinations such as Madrid, Barcelona, Seville, Valencia, Malaga, Palma and Alicante expect to maintain the positive evolution of rates and occupancy volumes registered since the beginning of the year, with hotels in Barcelona and Madrid benefiting especially from the strength of the MICE and Corporate business, where the opening in January of Gran Meliá's Torre Melina hotel in Barcelona also stands out as a relevant milestone.
In terms of holiday hotels, the positive trend of the summer continued in the fourth quarter, both in terms of rates and occupancy, with an excellent season in the Canary Islands with a greater anticipation of tour-operated sales and an increase in direct customers, while in the Balearic Islands there was a positive pace of bookings, increasing the average stay and allowing an extension of the season, in some hotels until November. The British and German markets performed well, and among the trends, there is still a strong demand for superior rooms, which recorded the highest rate increases. As for the forecasts for holiday hotels, the focus in the first quarter is concentrated mainly in the Canary Islands and in some hotels on the Spanish mainland coast, where a consistent improvement in prices and occupancy is also noted, with a greater weight of the direct channel and with the forecast of bringing forward the opening of numerous establishments to the end of March.
EMEA:
Germany: In the fourth quarter of 2023, Germany experienced solid growth in hotel demand, encompassing both leisure and business segments. Revenue improved compared to the previous year, driven by congress activity, Christmas celebrations, and various sporting events in Frankfurt and Munich. Looking ahead to 2024, further improvement is anticipated, attributed to the Corporate and MICE segments (which hold significant weight in Meliá's German hotels) and direct customers, alongside new major events planned for the year.
United Kingdom: In the UK, London hotels demonstrated a better performance in general, with a notable contribution from the direct customer segment and events like WTM. Hotels in the northern part of the country also exhibited positive trends in occupancy and rates. The positive momentum continues in London for 2024, with a slight slowdown in the corporate client and OTA segment. However, hotels in the North of England experienced a significant 23% growth, primarily driven by the direct client segment.
Italy: Milan stood out in Italy, with the recent opening of Meliá's fourth hotel, the Palazzo Cordusio by Gran Meliá. Milan recorded growth in rates and average occupancy, particularly in the MICE segment and among air crews. Some football events, such as the Champions League, also contributed to the positive performance. Rome had a positive high season and an uneventful fourth quarter. Looking ahead to 2024, the positive trend in both occupancy and rates is expected to continue, with Milan showing particular intensity and a greater contribution from the MICE, OTAs, and Direct Customer segments.
France: In France, the consolidation of Melia Collection hotels (both Maison Colbert and Villa Marquis) and the positive performance of Melia Paris La Defense contributed to a general improvement, despite negative impacts on the destination such as street protests. For 2024, "on the Books" bookings point to an improvement in RevPAR, with growth expected in all segments, driven from June onwards by the Olympic Games.
America
In Mexico, the evolution in the fourth quarter surpassed that of the same period in 2022, particularly in the Direct Customer and Tour Operation segments, contributing to improved air connectivity for domestic customers. In order to maintain the positive evolution of both occupancy and average rates, the Company aims to increase the local customer demand, as well as to sustain the excellent contribution of the MICE segment seen in 2023, primarily driven by groups from the United States.
In the Dominican Republic, the Canadian market remained the predominant source market in the fourth quarter, complemented by the US, Germany, France, and Spain. Key segments included the Direct Client and Tour Operation, with a growing presence of high purchasing power clients and superior rooms. The MICE segment experienced growth, particularly in the Paradisus Palma Real and Melia Caribe Beach hotels. For 2024, an improvement in air connectivity is expected to impact occupancy positively and lead to an increase in the average fare and to strengthen the Direct Client, OTAs, and the MICE segments.
Asia
The recovery in the continent after the pandemic has finally reached a turning point, notably in China, where the "Golden Week" saw a remarkable 70% increase in domestic travellers compared to 2022, surpassing pre-pandemic records. The positive trend continues in the first months of 2024, with the rise in international air connectivity driving the return of domestic travellers and an increased demand from China to other countries.
Southeast Asia, particularly Bali, is experiencing a consistent improvement in demand, further fuelled by enhanced air connectivity, too. In Vietnam, tourist destinations like Phu Quoc and Nha Trang show positive evolution, and there's a rebound in corporate and local customers in urban hotels in Hanoi and Tanh Hoa. The outlook for 2024 remains strong for Bali, emphasizing experiential value, and Vietnam, with bookings exceeding those of 2023, along with promising prospects for the MICE segment in Hanoi. In Thailand, demand from China is reactivating, with notable contributions from the Direct Client and OTA segments.
Cuba
In the fourth quarter of 2023, Cuba maintained the year's trend, with a slight decrease in Canadian customers and an increase in other nationalities such as Russia, Germany, Spain, and Argentina. The domestic market was affected by the country's situation and the devaluation of the peso. Looking ahead to 2024, there is a greater anticipation of bookings, with improvements compared to the same period last year. Canada remains a predominant source market, and there is a positive outlook for the recently opened Melia Trinidad Peninsula hotel, the first five-star hotel in Trinidad, which boasts exceptional attributes and quality.
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