The company highlights the unusual coincidence of events that happened in 2019 such as the smear campaign in some media affecting the reputation of the Dominican Republic as a tourism destination, sargassum seaweed in Mexico or the slowdown of some segments in Cuba as the most important factors, and is expecting a speedy recovery in the majority of cases.

Gabriel Escarrer Jaume, Executive Vice President and CEO of Meliá Hotels International: “The Meliá results for 2019 are in line with expectations, affected by simultaneous extraordinary events that had an unprecedented impact on certain destinations but from which we are already beginning to recover, as seen in the revival of bookings for the Dominican Republic in the US market, the disappearance of the sargassum seaweed in Mexico and the change in trends already apparent in the Canary Islands. Without these factors, and thanks to our strategic strengths of competitiveness and value creation, particularly our digitalisation, customer experiences, our people and sustainability, the company is prepared to face the next few years from a position of even greater strength."

The Meliá Hotels International results for 2019 were greatly affected by a combination of extraordinary events of very diverse origin, particularly in the Caribbean, and more specifically in the Dominican Republic and Mexico, both significant contributors to results. Other events such as the coronavirus in China have so far had only a moderate impact on company results, given that all of the five hotels in China are operated under management agreements, although the company remains very cautious with regard to the evolution of the heath crisis. The group has prepared a global contingency plan to ensure health and safety, as well as continuity in its operations and all the required legal and financial coverage.

In spite of these circumstances, excluding capital gains, Meliá achieved recurrent revenues similar to those of 2018 (€1,789.5M) and EBITDA of €470.9M, only -2.3% below the previous year. Consolidated Net Profit (€121.7M) was 19.8% below 2018 figures, influenced by less capital gains.

On a financial level, the company remains in a healthy position, having reduced pre-IFRS16 net debt by €15M in 2019 and holding the Pre-IFRS16 Net Debt/EBITDA ratio slightly above 2 (2.11X), influenced by the share buyback programme launched in 2019.

Regarding operating results, the company achieved a +0.6% increase in Revenue per Available Room (RevPAR) in owned and leased hotels, a figure which rose to +1.8% in the fourth quarter of the year. The increase in RevPAR was driven by an improvement in the average room rate (+2.3%) thanks to the brand strategy and improvements in the hotel portfolio and in spite of the issues in the Americas Division.

Sales through melia.com reached a record level (+3.1% compared to 2018), while the MeliaPro B2B channel grew by +14.9% in sales to travel professionals.

Digital transformation

Within the BeDigital360 programme, progress was made in management and technology in 2019 that included the application of Robotic Process Automation to internal processes such as payment management, e-commerce revenue insurance and invoicing, and also focusing on the service management strategy in areas such as temporary employment agencies, laundry, energy use, etc.

With a view to 2020, the company will continue to drive forward with innovation and technology enhancements to create a more digitalised and efficient operating model that maximises the opportunities presented by technology and robotics to improve the customer experience, efficiency in transactional processes and economies of scale. BeDigital360 also includes an important and comprehensive Accompaniment Plan for employees, designed to ensure the cultural transformation required so that they can contribute to the change.

Strategic priorities

On completion of its last Strategic Plan, Meliá Hotels International spent 2019 reflecting on the company's key priorities for the coming years in the current “VUCA" business environment (Volatile, Uncertain, Complex and Ambiguous) that causes frequent changes in business scenarios and competitive conditions. In response to these major challenges, the company has defined a series of strategic areas: the creation of shareholder value, digital transformation, the demand for experiences, the talent challenge and obligations in social and environmental matters.

• With regard to the challenge of creating shareholder value, the company plans to further enhance its hotel management model. Management of hotels offers greater profitability in the medium term, limiting investments to the acquisition of high-value management contracts, optimising the company's asset value focusing on quality growth in resort hotels (with 3 resort areas concentrating 80% of the growth: the Mediterranean, the Caribbean, and South-east Asia). Our portfolio of future additions stands at 62 hotels with more than 15,000 thousand rooms, of which 90% have been added under management and franchise agreements.​

• Secondly, Meliá aims to remain at the forefront of the digital transformation of the industry, having launched a project named BE Digital 360, to carry on with the success of the Be More Digital project between 2015 and 2019 in which we successfully digitalised our sales channels, sales team, and our entire sales ecosystem. Over the next few years, the challenge will be to extend the digital culture to the entire company, adapting the operating model, changing processes, introducing robotics, etc., as well as emphasising the importance of data and analytics.
• Thirdly, to respond to the growing “experience economy," the company will focus heavily on maximising the range of experiences on offer in hotels and destinations as a means of enhancing guest satisfaction and maximising revenue through a "total revenue" concept which goes beyond merely maximising revenues for rooms and breakfast, which is far removed from the requirements of modern travellers. The offer of personalised and unforgettable experiences is also an essential competitive factor when compared to other accommodation models such as holiday rentals, in which accommodation is basically just a commodity.

• Meliá will also prioritise the recruitment, development and retention of the best talent, as a critical factor in such a people-intensive industry as hospitality, in which technology can never replace personalised service and human interaction. Special attention will be given to the talent pools for Hotel General Managers and other critical positions, as well as the attraction and retention of talent, cultivating an “employer brand" which is also a fundamental factor in the company's international expansion.
• Finally, after being named the Most Sustainable Hotel Company in the World in 2019 in the Corporate Sustainability Assessment made by the sustainable investment agency SAM (belonging to Standard & Poor's), the company will maintain its strategic focus on sustainability and corporate responsibility as fundamental drivers of its reputation and positioning, especially given the current climate emergency. The company has designed a roadmap to continue to deepen its social commitment and environmental strategy, at the same time strengthening its corporate governance mechanisms.

As Gabriel Escarrer explains: “Our company has shown remarkable strength and resilience, which have been extremely important factors in maintaining our leadership in the current complex and volatile business environment. To consolidate these strengths over the next few years, we have to reinforce our diversified business model, our talent, our digital and analytical capacity, our advantages over alternative accommodation models through authentic brand experiences, and of course, the reputation and confidence we generate in our stakeholders. If we do that, we will be in the best possible conditions to create value and enjoy the consistent growth we anticipate for the coming years".

Outlook 2020

The company expects a positive year in major European cities (despite renovations in several hotels in the UK, France and Italy), and also expects Spanish cities to continue their positive trends, in spite of the cancellation of the Mobile World Congress in Barcelona. In resort hotels, the outlook is moderately optimistic both in the Canary Islands (where business is now stabilised after its previous downturn) and in the rest of the Mediterranean, with important competing destinations such as Turkey already having reached record occupancy levels. With respect to the impact of the incipient extension of the Coronavirus Covid-19 virus outside China, the company has been affected by the cancellation of some MICE events such as the MWC in Barcelona and certain events in Milan. The company remains prudent with regard to its forecasts, subject to the evolution of the management of the Covid-19 virus and the consequent impact it may have.

With regard to America, the recovery in the Dominican Republic is expected to be noticeable in the second half of the year, and we also expect RevPAR to stabilise in Cuba as a result of the different actions carried out.

Meliá is scheduled to open 23 hotels in 2020, most of them under management contracts, mainly in Asia Pacific (with 9 hotels in Vietnam, Indonesia, Malaysia, Thailand and China) and in EMEA (with 11 hotels in Germany, Portugal, Spain, UK, Netherlands, Bulgaria , Cape Verde, United Arab Emirates, Morocco and Qatar). In America, two new hotels will open: the Paradisus Playa Mujeres (Mexico) and Meliá Trinidad (Cuba).

The company wishes to highlight that it has a comprehensive Contingency Plan which includes the preparation and response of the company with regard to public health and safety in all its hotels and offices worldwide, and also to the continuity of business and operations as well as legal and financial aspects. It has also prepared a Sales and Marketing Action Plan "post-Covid-19" to boost the recovery of hotels that may be affected both in China and elsewhere.

​Result by Division - 4th Quarter 2019

Americas

• RevPAR in USD (-2.1%) fell less than in previous quarters, mainly affected by the absence of the US market in Punta Cana (-14%) and especially in the MICE segment.​

• Brazil maintains a positive trend (+17.8%) thanks to MICE business and international events held in Sao Paulo.
• Mexico is on an upward trend, especially driven by Los Cabos.
• Excellent evolution of Gran Meliá Iguazú.
• Scheduled openings Paradisus Playa Mujeres.

EMEA

• RevPAR slightly below (-1.4%) the 4th quarter of 2018 and with slightly positive expectations for the 1st quarter of 2020.
• Consistent improvement (+11.6%) in management fee revenues.
• By country, highlights include continued RevPAR growth in Germany (+4.7%) and in Italy (+7.5%). On the negative side, France continued to perform negatively (-5.6% on a comparable basis) in the first 9 months, affected by the transport strike and other factors, although a rapid recovery is expected when the situation returns to normal.
• In the UK, the uncertainty (now overcome) caused by Brexit and the elections, added to the renovation under way at the Meliá White House which is scheduled to end in the 1st quarter of 2020, affected RevPAR (-4%), in spite of the excellent performance of the new Melia London Kensington Hotel.
• Scheduled openings (2020):

Meliá Frankfurt (Germany)

ME Dubai (United Arab Emirates)

Innside Doha (Qatar)

Meliá Saidia Residences and Sol Marrakech (Morocco)

Innside Liverpool and Innside Newcastle (United Kingdom)

Innside Amsterdam (Netherlands)

Innside Lisboa (Portugal)

Melia Sunny Beach (Bulgaria)

Meliá White Sands (Cape Verde)

Spain

• Excellent RevPAR performance (+4.5%) and positive outlook for the first quarter of 2020, based mainly on city and ski hotels.

• Hotels in Madrid (+5.8%), Barcelona (+5.1%) and southern Spain (+7.2%), particularly Seville, Costa del Sol and Granada, contributed to improvements in the Division
• The Canary Islands improved slightly (+0.6%) on the road to a more general improvement, although still affected in the 1st quarter 2020 by the reduction in the number of flights from the UK and Germany
• Scheduled openings (2020): ME Barcelona

Cuba

• RevPAR in USD fell by -13.5% compared to the 4th quarter in 2018, affected by the collapse of Thomas Cook, the slowdown of arrivals in some segments and several partial reforms in hotels
• Strong growth in online sales (+15.33%)
• The new Meliá Internacional Varadero leads the sales figures for the quarter  
• Scheduled openings: Meliá Trinidad

Asia

• RevPAR in USD increased by +9.7% in the 4th quarter

• Total management fee revenues grew by +10.5%
• melia.com increased sales by +37.5%
• The excellent performance in China (+9.2% in revenues) will be cut short in the 1st quarter of 2020 due to the impact of the coronavirus, whose impact on the rest of the destinations in Asia Pacific has so far not been significant
• On the other hand, the outlook in Indonesia is positive and in line with forecasts, while the company expects to continue consolidating its leadership in Vietnam

• ​Schedule openings (2020):

Gran Meliá Cam Rahn Bay, Innside Halong Bay and The Reed Hotel (Vietnam)

Gran Meliá Chengdu, Gran Meliá Zhengzhou, Meliá Chongqin (China)

Meliá Phuket (Thailand)

Meliá Bintan (Indonesia)

Innside Kuala Lumpur (Malaysia)