Melia Hotels International Ensures Investors it Will Recover The Value Lost During The Pandemic.
Gabriel Escarrer Julia: 'Among all the current turbulence, there is one industry that is rising like a phoenix: tourism. I can assure you that Melia will emerge stronger from the crisis to face a period of recovery that will be extraordinary for the tourism industry, although full of challenges as we work to recover all the value destroyed by the pandemic and to become more efficient and competitive so that we can capitalise on all the opportunities that may arise.'
Gabriel Escarrer Jaume: 'We aim to respond to all your trust, and that is why I promise you we will see significant improvements in our results, our margins, our balance sheet and our expansion, allowing us to recover all the value lost due to the terrible impact of Covid, and build a bigger, more profitable, more efficient, more digital and more sustainable company in the new post-Covid era'.
Melia Hotels International held its Annual General Meeting today, chaired by Gabriel Escarrer Julia, with a 77,311%. Among other things, shareholders approved the annual accounts for 2021 for Melia Hotels International, ratified the appointment of Cristina Aldamiz-Echevarria as an Independent Director and of Luis Maria Diaz de Bustamante y Terminel as an External Proprietary Director, as well as the re-election of both for a period of four years. The appointment of Montserrat Trape as a new Director was also approved, and some articles of the Company's Bylaws and the Regulations of the Board of Directors were modified to make improvements in terms of Good Governance. After these appointments, the percentage of women members of the Board is now 36.36%, above the current recommendation of a minimum of 30%.
With the word 'recovery' as the leitmotif of their speeches, both the Non-Executive Chairman, Gabriel Escarrer Julia, and the company CEO, Gabriel Escarrer Jaume, explained the way the company has resisted the worst impacts of the pandemic to emerge even stronger thanks to a solid strategy and the cooperation of its different stakeholders. After thanking them for all their support, the Melia CEO promised shareholders that the company would meet ambitious short and medium-term goals that would allow it to bring forward the recovery of lost value.
The Non-Executive Chairman shared with shareholders his vision of what the company is going through, reflecting his optimism but also ensuring all the prudence and rigour required to face the uncertainties in the current business environment and the need to recover the value destroyed during the pandemic. He affirmed his faith in the tourism industry, whose fundamentals he believes to be more solid than ever, and also his confidence that Melia is one of the 'winners' after the pandemic, having strengthened its competitive advantages and fully prepared for the post-Covid period. The founder and Chairman of the company also highlighted the stock market's confidence in the company, focusing on the 27% rise in the share price until the beginning of June 2022.
After his speech, the company Executive Vice President and CEO, Gabriel Escarrer Jaume, explained the company response to the challenges created by the pandemic, recalled the positive forecasts for 2022, and presented the key areas in the roadmap that will define its priorities up to 2024.
Tactical and strategic response
As Escarrer Jaume recalled, the company combined a rigorous tactical approach and contingency management that were able to mitigate the worst impacts of the pandemic on the business and its people, together with a strategic vision that prepared the company for the challenges of the post-pandemic period. Escarrer detailed how the company's results in recent years have reflected the evolution of the pandemic, where after the crash in 2020, an irregular 2021, and a first two months of 2022 affected by the Omicron variant, the recovery is finally firmly consolidated in 2022, enabling the company to review its forecasts upwards as the year has progressed.
Escarrer explained the key areas of the Melia roadmap for the coming years, named the 'Road to 2024', which should lead the company to become a larger, more profitable, more digital and more efficient and more sustainable organisation up to 2024:
Expansion: Melia will stay focused on a so-called 'Holiday Axis' (from the Caribbean to Southeast Asia, passing through the Mediterranean, the Middle East and East Africa), where it already has a significant number of hotels, and plans to keep up the strong rate of adding new hotels seen over the last 12 months, with around 40 new hotels and 9,000 rooms being added each year, almost doubling the average number in the years prior to the pandemic.
Management excellence: the company's digital capacity and particularly its leadership in distribution have become one of the key attractions in the expansion of its brands through low capital-intensive formulas such as management and franchise agreements that currently represent 96% of the hotels in the growth pipeline. In addition to optimising sales thanks to melia.com, MeliaPro and the MeliaRewards loyalty programme, the company is also focused on maximising total revenue, including revenues in addition to room and board, assisted by a growing portfolio of hotel and destination experiences.
Digital and organisational transformation: Melia will continue to support its comprehensive digital transformation (including the Back Office, Front Office and Distribution with a new state-of-the-art website) with a humanistic and inclusive perspective and a priority focus on the training and re-skilling of its team members. In addition, the company has also reviewed its operating model to adapt the organisational structure, processes and workflows to the current digital environment and increase efficiency.
Innovation: the company remains committed to innovation and moving forward with partners who are specialists in the implementation of innovative and/or disruptive practices and formulas.
Sustainability: consistent with its industry leadership in sustainability, Melia has further reinforced its commitment to responsible tourism by improving its governance to adapt it to the current regulatory 'tsunami' with regard to sustainability, increasing its ambitions in combatting climate change, and consolidating a socially and environmentally responsible management model in all its hotels. As a sign of this commitment, Escarrer recalled the forthcoming opening of the company's first carbon-neutral hotel, the Gran Melia Villa Le Blanc, on the island of Menorca.
Balance sheet consolidation: the CEO of Melia also reaffirmed that the company will deploy a financial strategy aimed at reducing its debt and progressively return to the excellent levels of leverage prior to the pandemic. As the first steps towards this goal, he recalled that the company has stopped consuming cash after overcoming the Omicron variant in March, and that it expects to complete the sale of certain assets in the second half of this year.
Conclusions and commitments
The Chairman and the CEO of Melia agreed with their shareholders on the importance of having strong and trustworthy companies, especially in 'extraordinary' times such as those caused by the pandemic, the war in Ukraine or the inflationary crisis. Escarrer Jaume reminded them about the strength of the tourism industry, which despite the pandemic has emerged strongly and seems to be heading for a 'V-shaped' recovery with a record-breaking summer season, citing some of the strengths that justify the confidence of investors in Melia Hotels International, such as its leadership in the resort and urban leisure hotel segments (the ones with the highest growth and potential globally), its brands, its renovated hotels and its commitment to talent and sustainability, all of which have become increasingly important competitive advantages, along with its progress on digitalisation and expansion,
Finally, Gabriel Escarrer Jaume reciprocated the trust and support shown by shareholders 'in times of difficulty', committing to make 'significant progress' in improving its balance sheet and profitability in the short, medium and long term, and specifically to reduce the Group's debt by at least EUR250 million, as well as to achieve an Ebitda excluding capital gains of at least EUR400 million in 2022, and to improve the Ebitda margin in 2024 by no less than 300 basis points. ?
About Melia Hotels International
Founded in 1956 in Mallorca (Spain), Melia Hotels International operates more than 390 hotels (portfolio and pipeline) throughout more than 40 countries, with brands including Gran Melia Hotels & Resorts, Paradisus by Melia, ME by Melia, Melia Hotels & Resorts, INNSiDE by Melia, Sol by Melia and TRYP by Wyndham. The Company is the global leader in resort hotels, while also leveraging its experience to consolidate the growing segment of the leisure-inspired urban market. Its commitment to responsible tourism has led the Group to become the third most sustainable hotel company in the world in 2018, according to RobecoSam, the investment company to produce the Dow Jones Sustainability Index. Melia Hotels International is also included in the IBEX 35 Spanish stock market index and it is the Spanish hotel leader in Corporate Reputation (Merco Ranking). Follow us on Twitter, Facebook, Linkedin and Instagram meliahotelsinternational.com
MELIA HOTELS INTERNATIONAL, S.A. 
