Sol Melia announced results for the first quarter 2003 that showed revenues of…
Sol Melia announced results for the first quarter 2003 that showed revenues of 209 million Euros, an 8% decrease over 2002, while earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 26% to 40.2 million Euros. Net profits came in at 2.7 million Euros, a 75.3% decrease over the previous year. If the negative effects caused by the fluctuation in the Dollar-Euro exchange rate were not taken into account, revenues, EBITDA and net profits would have decreased by 2.4%, 14.8% and 28.8% respectively.
RevPar (revenue per available room) of all affiliated hotels fell by 4.6% compared to the first quarter 2002, mainly due to the significant impact of the conflict in Iraq on the travel and tourism industry, to the celebration of the Easter holidays in the second quarter 2002 (April) rather than in the first quarter as occurred in 2001, and to the weakness of the dollar against the Euro which has strongly affected the results of many hotels in the Americas Division. If the exchange rate differences were not to be taken into consideration, RevPar of comparable hotels would have fallen by only 1.7%.
RevPar in resort hotels in Europe fell by 2.7%, mainly due to a 6.4% reduction in the Spanish Canary Islands and a 12.4% reduction in the Spanish Balearic Islands.
In the company`s European City Division RevPar fell by 3.3%, while the Americas Division saw RevPar drop by 18.5%, due to the significant decrease at the Gran Melia Caracas (RevPar down by 77%) and exchange rate differences. Excluding these effects, RevPar for the Division would have actually increased by 14.5%.
Optimistic forecasts for the summer season
April seems to have represented a turning point, and bookings made to date for May and June, as well as those expected for the summer season, indicate a general improvement in results. These figures, together with the relatively minor weight that first quarter results generally have in overall results for the year due to the seasonality of a large part of the business, make Sol Melia optimistic about performance improvements over the rest of the year.
Solmelia.com: a vital tool for stimulating direct sales
At the end of the first quarter 2003, sales made through solmelia.com increased by 322% over the same period in the previous year. Now available in Spanish, English and German, the site received more than 20,000 per day. Focusing on sales and on personalization, the new solmelia.com aims to become one of the company`s most important distribution channels, as well as a fundamental tool for improving customer relations and brand awareness. Solmelia.com also guarantees that visitors will find the best online rates for company hotels or the company will pay the difference.
During the first quarter, and to better serve guests and families staying at resort hotels, Sol Melia reached an agreement with Warner Bros. to create theme areas for this summer season featuring the characters from The Flintstones in some Sol Hotels in Spain.
The first two hotels to add the theme areas, which have been greeted with enthusiasm by guests, will be the Sol Milanos Pinguinos (Menorca) and Sol Tordos (Majorca). In 2004, they will be joined by the Sol Antillas Barbados (Majorca), Sol Falco (Menorca) and Sol Principe Principito (Costa del Sol). The agreement between Sol Melia and Warner Bros. also includes the development of further cooperation in Americas Division.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
