Sol Meliá increases revenue 14% in Q1 on higher occupancy, rates

PALMA DE MALLORCA, SPAIN Sol Meliá SA has quadrupled its earnings in the first quarter thanks to higher revenues and improved hotel performance across the board.

Sol Meliá earned €4.6 million in the quarter, compared to a profit of €1 million in the same period in 2010. Revenues reached €293.7 million, up 14% compared to the €258.5 million taken in a year ago. EBITDA grew by 28.9% to €52.3 million euros, up 29% year over year. These results do not yet reflect the positive trends in occupancy and ADR for the Easter period, which fell entirely in April, the company says.

Hotels in Latin America—particularly Mexico, Puerto Rico and the Dominican Republic—along with the Canary Islands, have performed especially well during the period, with a combined RevPAR increase of 24.7%. ADR is up 4.1% overall, with increases across all brands and in 58% of the hotels.

After adding 78 hotels to its portfolio between 2008 and 2010, Sol Meliá maintains a strategy of diversification and international expansion focused on markets in which it has competitive advantages, and also new emerging markets with high potential for the group’s brands. The company has already created a new business area for Asia Pacific to support the significant growth planned in the area, especially in China.

Sol Meliá is also expanding in its core market, the Caribbean, soon opening two new all-inclusive Paradisus resorts in Playa del Carmen, Mexico —a 512-key property for families and an adults-only 394-key resort. Sol Meliá has also recently announced the 300-key Papagayo Paradisus Bay, opening in Costa Rica in 2013.

Overall, Sol Meliá is preparing to open 30 new hotels, representing 8,465 guestrooms, or 11% of the current portfolio. Most of the new inventory, 88%, is in the upper-scale segment, and mostly under asset-light strategies.