NH completed the best year in its history and is preparing to create value with Minor Hotels
The Company expects to exceed the EBITDA (1) target of € 260 million announced at the end of 2018 and confirms its goal of reaching € 285 million of EBITDA (1) in 2019
In the framework of the International Tourism Fair (FITUR), the CEO of NH Hotel Group, Ramón Aragonés, took stock of the past year and of the initiatives that have contributed significantly to the Group being able to present the best in the near future. results of your story. In addition to highlighting the good harmony existing between the teams of NH Hotel Group and Minor Hotels and the joint opportunities that both companies are rapidly exploring, Aragones has anticipated favorable prospects for 2019.
Goals passed in 2018
The Company has announced that it expects to exceed the EBITDA (1) target of € 260 million marked for the end of 2018. While awaiting the presentation of results next February, Ramón Aragonés has anticipated that the evolution of the company in the The second part of the year has been even better than expected. This advance has been supported by a good performance in the main European cities, which highlights the recovery of Barcelona, among others.
Likewise, the CEO of NH Hotel Group has highlighted the levers that have contributed to the Company's compliance with all the profitability objectives with which it had committed, making the most of the improvement of the business, showing an efficient operational management and reducing the level of indebtedness beyond the initial objective.
Ramón Aragonés pointed out some of the initiatives carried out during the year, such as the greater positioning of the hotel portfolio under the NH Collection brand, which already reaches 22% of the Group's total rooms or the improvement of the customer experience . On this last point he highlighted the launch of FASTPASS, a combination of three innovative services -Check-in Online, Choose Your Room and Check-out Online-, which puts in the hands of the client all the control over his stay. In this sense, NH Hotel Group has become the first European chain to offer these three services simultaneously.
In addition to an efficient revenue management, supported by the improvement of quality, Aragonés highlighted an optimal turnover of assets during the year, among which he recalled the agreement reached for the sale and subsequent rental of the property where the NH Collection hotel is located Barbizon Palace of Amsterdam or the more than 2,300 rooms opened and signed during the year. Among others, he highlighted the opening of the NH Collection Gran Vía in Madrid or two new hotels in Marseille under the NH Collection and nhow brands. He also recalled that the current portfolio of hotels signed for the coming years has 26 hotels and nearly 5,000 new rooms. In this sense, it is worth noting the Group's commitment to the nhow brand, with seven iconic hotels under project in the cities of London, Amsterdam, Brussels, Frankfurt, Rome, Lima and Santiago de Chile, which will open their doors in the coming years.
On the other hand, Ramón Aragonés, highlighted that the Company has concluded 2018 with a solid balance sheet after the reduction of the indebtedness carried out, which has been a priority for the Group in the last two years. This reduction in indebtedness implies that, starting from a gross financial debt of around 900 million euros at the end of 2016, the Company would have achieved its objective at December 2018 of reducing the relative indebtedness below the EBITDA once.
Minor Hotels & NH Hotel Group
After the acquisition of 94.1% of the capital stock of NH Hotel Group by Minor International in the last quarter of 2018, both companies have begun to explore joint value creation opportunities for the coming years. The first initiative announced during the international tourism fair was the presentation of the imminent integration of all its hotel brands under a single corporate umbrella with presence in more than 50 countries around the world. In this way, a portfolio of more than 500 hotels under eight brands is ordered: NH Hotels, NH Collection, Nhow, Tivoli, Anantara, Avani, Elewana and Oaks, which completes a wide and diverse range of hotel proposals connected to the needs and wishes of today's global travelers.
Ramón Aragonés pointed out the confidence that Minor International is showing throughout the management team of NH Hotel Group and the enthusiasm they share with them in the creation of a leading and global hotel platform with presence in five continents. "The complementarity of both hotel portfolios and the reference position of their different brands will allow us to grow and compete with greater guarantees of success and create added value to our customer bases around the world," added the CEO.
The teams of both groups work together in different lines of action. Taking advantage of the broad brand umbrella of the two companies, the hotel repossesses the potential repositioning of the most premium brands of some assets located in Europe that have the capacity to boost their profitability under different brands. On the other hand, the two companies advance in the development of initiatives to take advantage of economies of scale with commercial channels and suppliers.
Thanks to the leading position of Minor Hotels in its home markets, NH Hotel Group is already benefiting from some cross-selling opportunities due to access to Asian customers, which represents a high growth potential due to the fact that it represents 1% currently for the company. At the same time, both work on the instrumentalization of the use and operation of the brands of the two groups in markets other than their natural ones, which will accelerate their expansion throughout the world.
Finally, one of the most advanced joint projects is the transfer to NH Hotel Group of the operation of a portfolio of 15 hotels of Minor Hotels in Portugal and Brazil, which will be completed shortly. In this way, NH Hotel Group will operate 17 hotels in Portugal (13 of Minor Hotels plus 3 open hotels and 1 of NH Hotel Group), achieving a leading position in the country with presence in Lisbon, Oporto, Coimbra, Sintra, Evora and Algarve. On the other hand, in Brazil both companies add their efforts with 3 hotels located in Bahia, Sao Paolo and Curitiba.
Positive forecasts of nh for 2019
The favorable evolution above what was expected, as well as the initiatives implemented during 2018 and those that are underway this year, among which we can highlight the investment in repositioning the company's key assets in cities such as New York, Amsterdam, Rome, or Munich, allow NH Hotel Group to confirm the objective of reaching an EBITDA (1) of 285 million for 2019.
Likewise, the Group's strong financial position has allowed the identification of additional repositioning opportunities with attractive returns that will be executed in 2019 and 2020 in cities such as Rome, Amsterdam, Milan, Brussels and Luxembourg, among others.