Q1 results: Meliá reports a 25.5% revenue drop for Q1 2020
Meliá Hotels International has reported significant losses in Q1 2020. (Photo: Meliá Hotels)
COVID-19-related travel restrictions and lockdowns have resulted in Meliá’s RevPAR reporting a 14.7% decline after a strong start to the year.
2020 started strong for the hotel industry in many regions. Unfortunately, the emergence of COVID-19 promptly dashed any dreams of the new decade beginning with a record year.
We find out how Meliá Hotels International has been affected by taking a closer look at its Q1 results.
Meliá reveals impact of coronavirus
For Q1 2020, Meliá has reported a 14.7% decline in RevPAR [revenue per available room] and consolidated revenues of €293 million, which represents a 25.5% drop on Q1 2019. EBITDA was down by 85% at €14.2 million, and net attributable profit was negative at -€79.7 million.
“The disruption caused by the COVID-19 pandemic in the world economy and its brutal impact on the travel industry has generated an extreme turning point in the results of Meliá Hotels International, ruling out any basis for comparison with previous years,” said Gabriel Escarrer Jaume, executive vice president and CEO of Meliá Hotels International.
“The moderately positive performance that the company expected for the year, and which was the case up to the end of February, ended in mid-March when the global emergency was declared, causing the almost immediate closure of hotels worldwide. This forced us to implement a rigorous contingency plan to guarantee the continuity of the business and the preservation of employment, as well as adapting our strategic plan to ensure we are stronger and more competitive when the industry returns to business after COVID.”
Looking to the future
Despite the trying times and the drastic measures that Meliá has had to take recently, the hotel group’s leadership remains positive about its long-term prospects.
“Without any doubt, our financial strength, our strategic commitment to digital transformation over recent years, and our geographic diversification are strengths that will help us maintain our leadership and competitiveness in the new travel industry which emerges after COVID, and for which the company is preparing itself intensively,” said Jaume.
The company has also adapted its strategy in an effort to better meet the likely demands of doing business in a post-coronavirus world. Among the steps it is prioritising are adopting measures to ensure liquidity for the coming months of slow business, as well as stepping up hygiene and sanitation protocols, and adopting previously planned digitisation more quickly to reduce the need for direct contact at its properties.