Hotel Revenues Soar Thanks To Tourism Boom

17 May 2016 – Expansión

Spain’s large hotel groups are preparing for another record year after figures for the start of 2016 have confirmed that the tourism boom is continuing across the peninsula. The volume of international tourists grew by 4.4% between January and April, to 16 million, which together with the successful Easter period and the continuation of the recovery in domestic demand, means that experts are forecasting a better summer season than in 2015 and another record year.

Last year, Spain received 68.1 million international tourists, up by 4.9%, which boosted the business of the main Spanish hotel chains. Barceló, RIU, Melià and Iberostar took advantage of the situation, favoured by instability in rival countries such as Turkey and Egypt, and closed 2015 with double-digit revenue growth. In 2016, profitability will continue to rise thanks to the continuation of the favourable environment and the fact that the chains are accelerating their entry into new markets, as well as remodelling their hotels.

Iberostar’s revenues soared by 29% to €1,847 million and it was the hotel chain that improved the most. The company owned by the Fluxá family will open six new properties in 2016 and will spend €90 million renovating its hotels.

Meliá’s turnover grew by 16.3% to €1,738 million, whilst Barceló generated revenues of €2,480 million in 2015, representing growth of 20.6%, and a net profit of €100.2 million, up by 116%. It was the most profitable Spanish hotel chain. This year the group expects to see improvements across all of the regions in which it operates. Specifically, its objective for 2016 includes generating EBITDA of around €326 million and a net profit of €125 million.

In the case of RIU, its revenues grew by 14% to €1,848 million. The company has announced its intention to invest €390 million in 2016 with the opening of four hotels and the complete refurbishment of another eight.

Meanwhile, last year Palladium recorded revenues of more than €500 million for the first time in its history, up by 20% compared with 2014. The chain owned by the former minister Abel Matutes plans to create 1,300 jobs in Spain and 300 in America. The group is undergoing an expansion process in Latin America, which includes opening new hotels in Jamaica and Mexico, with a committed investment of between €800 million and €900 million over five years.

According to the Chairman of Cehat, Juan Molas, who confirmed the current trend, 2016 is going to be a “very good year”, thanks to traditional markets, such as the UK, German and French and the recovery of the Russian Market, which had declined somewhat in recent years. In addition, new routes to Asian countries may boost alternative tourism besides the traditional sun and beach segment.

Meanwhile, the Chairman of Ceav, Rafael Gallego, said that some destinations, such as the Balearic Islands, Costa del Sol and Levante, are already close to overbooking. Instability in countries that compete with Spain, such as Turkey, is contributing to this record; as is the parity of the dollar with the euro, which makes Caribbean destinations less attractive; and the price of oil.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Santander Appoints Echenique To Lead Metrovacesa

7 May 2015 – Expansión

The Vice-President of the financial institution will take over the reins at the real estate company, after the bank increased its shareholding in the group, which has cut its debt in half in recent months.

A new President for a new era. That is the decision that has been taken by the four banks that own the real estate company Metrovacesa. Santander, BBVA, Sabadell, and Popular have decided to place the reins of the company in the hands of Rodrigo Echenique (pictured above), the Vice-President of the bank chaired by Ana Botín and President of the NH Hotel Group.

The appointment of Echenique as a non-executive director comes barely two weeks after the company held its annual shareholders’ meeting, which approved the appointment of four new directors, including Echenique. Abel Matutes and Juan Ignacio Ruiz de Alda also joined the management board, as representatives of Banco Santander, and Manuel Castro, from BBVA.

Rodrigo Echenique (Madrid, 1946) holds a degree in Law from the University of Complutense in Madrid and is a non-practising State Attorney. He has been CEO of Santander and is currently a member of the group’s board of directors and executive committees, as well as the Vice-President. Moreover, he is the President of the NH Hotel Group and a director of Inditex. He has also served as President of Vocento.

In his new role, Echenique replaces Ignacio Moreno, who will continue to perform executive duties as CEO, after less than three years as President. Meanwhile, Carlos García León, who served as CEO until now, will continue his duties as managing director.

Capital injection

The appointment of the new President comes just days after Metrovacesca’s shareholders approved the capitalisation of debt amounting to €751 million and five months after Santander acquired the 19% stake that Bankia owned in the real estate company.

Following the two operations, Santander has strengthened its position as the primary shareholder in Metrovacesa, which it first entered in 2011 along with five other entities; it currently owns 58.67% of the share capital. It is followed by BBVA with a 19.42% stake and Banco Sabadell, with 13.83%. In January, the three banks granted a loan to the real estate company amounting to €751 million to allow it to cancel tranche B of its syndicated loan early; in April this loan was capitalised. The other major shareholder, Banco Popular, did not participate in the transaction and holds 7.99% of the capital.

The capitalisation of this loan, together with the sale of its 26.9% stake in the French real estate company Gecina, has allowed Metrovacesa to significantly reduce its debt, down from a liability of €4,999 million in 2013 to net financial debt of €3,285 million at the end of 2014.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Metrovacesa Approves Capitalisation Of €751M Loan

29 April 2015 – Expansión

The real estate company Metrovacesa, owned by Santander, BBVA, Sabadell and Popular, received the green light from its shareholders yesterday to convert a €751 million loan granted by three of its owner banks into equity.

Santander, the primary shareholder in Metrovacesa, which holds a 55.89% stake after it took over Bankia’s shareholding; BBVA, which owns 18.3%; and Sabadell, which owns 13.04%, granted a loan to the real estate company for €751 million in January. Now, the three banks have converted the refinanced loan into shares through this increase. Thanks to this transaction and the sale of its stake in Gecina, Metrovacesa has reduced its debt to €2,409 million, compared with the balance of more than €5,000 million that it accumulated last year.

In parallel to this transaction, a further increase has been agreed, through monetary contributions and pre-emptive subscription rights, for €0.9 million, aimed at minority shareholders.

At their meeting, the shareholders also approved the appointment of four new directors, which means that the management body will comprise 11 members. The new appointments include Rodrigo Echenique, Abel Matutes and Juan Ignacio Ruiz de Alda, representing Banco Santander and Manuel Castro, from BBVA.

Metrovacesa also approved its accounts for 2014. The real estate company reduced its losses by 50% taking its consolidated loss to €186 million compared to €349 million in 2013, according to sources close to the company. Meanwhile, the parent company recorded a loss of €21.6 million.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake