SOL MELIÁ HOTELS & RESORTS REPORT INCREASE OF REVENUES BY 18% FOR THE FIRST THREE QUARTERS OF 2001

Sol Meliá Hotels & Resorts has announced results for the first nine months of the year, showing a net profit, excluding extraordinary profits, of 83.9 million Euros. This is an increase of 12% over the previous year. The group also posted a net profit of 94.7 million Euros, a decrease of 10%. This decrease is due to the generation of 29.6 million Euros in extraordinary profits in 2000, after the sale of real estate including the Meliá Bávaro Hotel in the Dominican Republic. Consolidated revenues grew to 795.3 million Euros for the nine-month period, an 18% increase over last year.

Sol Meliá Hotels & Resorts' RevPar (revenues per available room) grew by 6% over the period, while average occupancy reached 73%. The company added 21 new hotels to its portfolio over the first nine months of the year, and has already signed agreements for an additional 68 hotels to be opened over the next two years.

The detailed results show how resort hotels in Spain were negatively affected by the strikes over the summer by Iberia Airlines pilots and ground transport operators in the Balearic Islands, as well as by the negative impact of the proposed environmental tax in the same destination.

The European City Division also suffered a minor slowdown, primarily due to the numerous cancellations of conventions and business meetings and the almost total lack of US clients after the events of 11 September.

In this respect, while some destinations such as Latin America, European capital cities and Tunisia have already seen their third quarter results suffer due to the crisis generated by the mentioned events, the company foresees an even greater impact over the last quarter of the year.

Looking to the future

Nevertheless, Sol Meliá Hotels & Resorts is confident that various factors will allow the company to face the current crisis in much better conditions than the majority of its competitors. These factors include:

The enormous diversity of its hotel portfolio in both the business and leisure sectors;

The excellent condition of its hotels (75% of which have been added to the company over the last five years or have been completely renovated and refurbished);

The ongoing brand restructuring and repositioning and high brand awareness;

The substantial absence of future hotel development projects requiring investment by Sol Meliá Hotels & Resorts (almost all of the new hotels will be taken over under lease or management agreements);

The company's financial strength and diversification and its low levels of leverage. Sol Meliá Hotels & Resorts has the second best credit rating in the world hotel industry with a BBB (Stable) rating from Standard & Poors and BBB+ from FITCH.

Sol Meliá Hotels & Resorts is the leading hotel group in Spain in both the city and resort hotel markets, the leading chain in Latin America and the Caribbean, the second largest hotel group in Europe and the tenth largest worldwide. The company is also the world's largest resort hotel chain. Sol Meliá Hotels & Resorts has a portfolio of more than 350 city and resort hotels in 30 countries under the brand names of Meliá, Sol, Tryp and Paradisus hotels.

Its properties in Asia include Gran Meliá Jakarta, Meliá Bali Villas & Spa Resort, Meliá Benoa All-Inclusive Resort (Bali), Sol Lovina (Bali), Meliá Purosani (Yogyakarta), Meliá Panorama (Batam), and Sol Elite Marbella (Anyer) in Indonesia; Meliá Hanoi in Vietnam; Meliá Kuala Lumpur in Malaysia; and Sol Twin Towers (Bangkok) in Thailand. Sol Meliá Hotels & Resorts has signed agreements to take-over and manage a further 68 hotels over the next two years.