SOL MELIÁ HOTELS & RESORTS ACHIEVES REVENUES OF 477.7 MILLION EUROS FOR THE FIRST HALF OF 2002

7 August 2002

Sol Meliá Hotels & Resorts has reported revenues of 477.7 million Euros during the first half of the year, 3.3% less than in 2001. Meanwhile, RevPar (revenues per available room) across the company fell by 7.3% compared to the first half of 2001. These results reflect the stagnation of the rest of the travel industry after the consequences of September 11, the subsequent slowdown in the world economy, especially in Germany, and the crisis in Latin America.

The company's European Resort Division has been hit by the fall in business of hotels in Tunisia, the Balearic Islands and Canary Islands. This is counterbalanced by the stronger performance of hotels in mainland Spain, which has kept up business from northern and central European countries while also performing well in the domestic market. The reasons for the stronger performance can be attributed to the leadership and brand awareness the company enjoys in Spain as well as the quality of its hotels after the 500 million Euros invested in renovation and refurbishment over recent years.

In the European City Division, the economic slowdown in the major European countries, particularly Germany, as well as the fall in the number of American visitors to European capitals - London, Paris, Rome, Madrid - and the reduced activity in the meetings and congress market have led to results below initial expectations. The Americas Division, the area of the company that most suffered the effects of September 11, has been further affected by the lethargy of the American economy and the continued reluctance of Americans to travel abroad, a fact that has hit Mexico in particular.

The change in the makeup of customer nationalities that the company has been able to effect in the Dominican Republic has led to a quicker recovery in their performance. On the other hand, the difficulties faced by Argentina, Brazil, Venezuela and Uruguay continues to affect the 25 Sol Meliá properties located in the four countries.

Earnings before interest, taxes, depreciation, amortization and rentals (EBITDAR) reached 135.7 million Euros, a 15% decrease over the previous year, while Earnings before interest, taxes, depreciation and amortization (EBITDA) was 105 million Euros, a decrease of 23%. Due to the devaluation of Latin American currencies in countries where the company operates hotels and the absence of extraordinary profits as compared to 2001, net profit of the Group was 8.1 million Euros, a 85% decrease over 2001, although operating cash flow stood at 71.3 million Euros, 23% less than in 2001. During the first half of the year, Sol Meliá also reduced debt by 128 million Euros, with consequent savings in financial costs.

Sol Meliá adds 14 new hotels during the first half of 2002

During the first half of 2002, Sol Meliá has added 14 new hotels to its portfolio and now operates 356 hotels with 87.651 rooms in 30 countries on 4 continents. The new hotels reinforce the company's position as the leading hotel company in Spain, especially in its city hotel market. As at 30 June, the company had also already signed agreements to add 47 further hotels over the next two years. 

Growth in the first half of 2002

Mention should also be made of the fact that the company re-inaugurated the Gran Meliá Fénix in the first half 2002 after an 18 million Euro renovation. The hotel is expected to become the company's flagship property in Madrid and one of the finest hotels in Spain. 

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 third 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 Hotels, Sol Hotels, TRYP Hotels and Paradisus Resorts.

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.