Meliá Hotels International today held its Annual General Meeting
"We are on the threshold of a global recovery that at Meliá we intend to take advantage of to grow, recover lost value and multiply it", stated Gabriel Escarrer Jaume, CEO of the Spanish chain
Meliá Hotels International today held its General Shareholders' Meeting, chaired by Gabriel Escarrer Juliá, with a reduced attendance of the public and in a hybrid face-to-face-telematic format, complying with the Covid-19 protocols and the recommendations of good corporate governance.
The General Shareholders' Meeting has agreed to renew the positions of four directors, including that of the Executive Director of the Company, Gabriel Escarrer Jaume, and to appoint Ms. María Antonia Escarrer as proprietary director, replacing the company Hoteles Mallorquines Consolizadas, SL Likewise, the annual accounts for the 2020 financial year, the proposal for the application of results (without distribution of dividends) and the new Board Remuneration Policy for the years 2022 to 2024 have been approved.
The non-executive President of the Company took stock of the main impacts of Covid-19 in the tourism sector, highlighting Meliá's resilience, which he attributed in part to the great strengths that the company had when the pandemic broke out, referring expressly to financial solvency, the strong investment made in the renovation and repositioning of hotel assets, and the commitment to digitization, together with effective crisis management.
65 years in the Presidency
Escarrer Juliá, who recalled that MHI celebrates its first 65 years of history in 2021, also highlighted the role and responsibility of family businesses - which according to the World Survey carried out by PWC contribute more than half of the global Gross Domestic Product - and framed In the values of a family business, the responsible and collaborative management that the company has developed with its employees, clients, suppliers, hotel owners, shareholders, and the third sector, throughout the 15 months since the declaration of the disease.
In this way, he summarized the support offered by Meliá to its employees and the efforts made to preserve employment, facilitate teleworking and promote training, especially digital training, and also accompany them emotionally, in addition to protecting their health in all centers. of work. He explained the collaboration maintained with the owners of many of the hotels operated by the Group, which allowed Meliá to significantly save on rents due to the closure of the hotels and the absence of income, while still complying with the agreements and commitments agreed upon. Regarding the suppliers, Escarrer Juliá thanked the understanding and empathy shown by most of them, as well as the solidarity of the companies that selflessly offered products and services to the hotels that Meliá gave to be medicalized.
He also highlighted the relationship of support and closeness maintained by the Company with its customers, offering maximum flexibility and support, even expanding, despite the decrease in sales, the advantages for loyal customers, which increased by 4% during 2020 and they already reach the 13.5 million members of the MeliaRewards program. In front of his investors and shareholders, Escarrer thanked their trust and promised to recover and increase the value of the company after the crisis, while highlighting that, despite the still high volatility, the market has recognized the value of Meliá Hotels International , the action recovering from the initial sharp drop and maintaining a stable and positive trend, which they hope to maintain when facing the beginning of the recovery.
The Chairman of the Group wanted to leave until the end the commitments made by Meliá with the Society, the victims of the Covid and the essential groups in the face of the pandemic, as well as the advances in the Group's strategy against climate change, despite the setback suffered worldwide for the environmental agenda in the face of the health emergency. In this sense, he recalled the transfer of 18 hotels as assistance centers or for quarantines or groups in the first line, as well as other donations and actions of social and family support to employees in developing countries, and expressed his satisfaction with the recognition as the Hotel Company most Sustainable in the world in 2019, and as the second most sustainable in 2020, in the Corporate Sustainability Assessment carried out by Standard & Poor's Global,
Prudent management and strategic adaptation
Gabriel Escarrer Jaume began his speech with an emotional memory of the 11 employees of the Company who lost their lives due to the coronavirus, in Spain, Mexico, Brazil and the Dominican Republic, exposing below the negative results obtained in 2020 and the first half of 2021, due to the strong impact on the tourism business and the slow management of vaccines and international coordination. The Executive Vice President and CEO of the group regretted not having been wrong when predicting, when the health alarm was declared, that tourism activity could not recover until the third quarter of 2021.
Together with the competitive advantages already mentioned by the Chairman of the Group, the vision of the company's chief executive and his ability to react allowed Meliá to deploy effective contingency management focused on a series of “resilience levers” that he specified in the following : the safety of employees and customers, the preservation of employment and talent, relying on measures such as ERTE's in Spain, and liquidity and business continuity.
After recalling the main achievements of the plan in each of these areas, Escarrer focused on exposing how the company has prepared for the new era of post-Covid tourism, within the framework of the Plan that they have called "The Day After", after decide that they would take advantage of the practical stoppage of operations to promote and accelerate the transformation of the company in terms of digitization, efficiency and sustainability. The progress made in the three main “pillars” of the plan, namely: digitization, the organizational evolution towards a more digital and efficient model, and sustainability, allowed Escarrer to affirm that in a normalized environment and with a similar level of income prior to Covid, the Company will have an improvement of 300 basis points in its operating margins.
Escarrer also explained the transition from contingency management to a new strategy designed for the post-Covid environment, until the 2019 income levels recover, (which the consensus of experts place around 2024), with the priority of to achieve a more resilient Company, through growth and improvement of its profitability, also contributing to the reduction of its debt.
Based on the 2030 strategic vision already outlined in the 2020 Strategic Plan, which established “the aspiration to position ourselves among the world's leading hotel groups in the medium and high segment, affirming our leadership in vacation hospitality and bleisure, and to be a benchmark in excellence, responsibility and sustainability ”, Meliá will focus in the coming years, according to its CEO, on boosting the Group's commercial and distribution capacity, one of Meliá's main competitive strengths, especially demonstrated during the pandemic crisis. At the same time, they will continue to bet on a quality, sustainable and profitable expansion, driven by their brands and their new franchise and hotel models “Affiliated by Meliá”, which allow them to incorporate third-party hotels under flexible formulas,
Regarding expansion, the executive recalled that to date, 11 new hotels have been signed in 2021, a figure that they expect to at least double during the year, in all cases under “asset-light” formulas and in vacation destinations, the segment that expects to recover the fastest. In this sense, Escarrer valued the launch of growth models through franchises and "Affiliated by Meliá" hotels, which thanks to their versatility and flexibility have allowed them to grow even during the crisis, in holiday destinations in Spain, Greece and Italy, as well as the positive evolution of the Innside by Meliá brand, which continued to incorporate hotels in cities such as Luxembourg, Amsterdam or Newcastle, or starring in hotel rebrandings in Madrid and Mallorca. By last,
The prelude to recovery
The CEO of Meliá insisted on demanding prudence given the still low visibility in international travel, and the fragility of the health situation in some markets, but clearly opted for placing the start of a "consistent recovery" in the second semester of this year.
To support this statement, Escarrer recalled the international air traffic figures, the “triggered” reservations after the State of Alarm in Spain (which already exceed 50% of those registered at the same time in 2019), and the good evolution of other markets such as German or French; In a special way, he highlighted the inflection in the trend that cancellations manifested during the pandemic, generating negative growth in reserves.
Meliá's exposure to the vacation segment, and its geographical diversification, once again acted as a protective shield, since destinations such as China, Mexico or the Dominican Republic have long since recovered the level of reservations prior to the Covid, and the vacation will clearly be the segment that was being retrieved before. For all these reasons, Gabriel Escarrer announced that, if the activity continues to recover, the Company will stop consuming cash from July, going to generate net cash.
An exercise of responsibility
The leader of Meliá Hotels International has also been, in recent years, the Exceltur Tourist Alliance, and did not want to stop making, in this important intervention, a call to national and European institutions and public-private collaboration, for the fundamental role that both will have in the recovery of the tourism sector after the pandemic.
After recalling the guidelines indicated by the Secretary General of the United Nations, Antonio Guterres, to guide this sustainable and competitive recovery of the tourism industry, coinciding with the proposals that companies have been demanding from Exceltur, Escarrer regretted that, as highlighted by the company itself Independent Fiscal Authority, aid to companies in Spain has been in general one of the most restrictive and late in Europe, and it again requested a Business Rescue Plan for tourism in the short term by the Spanish authorities, and an investment plan in competitiveness and sustainability in the medium and long term, in which the Next Generation Funds of the European Union must play a fundamental role.
Escarrer insisted that, as leaders in the sector, Meliá has exercised its responsibility and been involved from day one, not only in internal contingency management, but also in supporting society, and promoting the defense of the sector before the Administrations .
Finally, the Meliá CEO reminded shareholders that, if a year before he anticipated that 2020 would not be a year to think about benefits, but rather to demonstrate resilience, preserve the Company's value to the maximum, and “gain momentum ”, 2021 will be the year of the change in trend and the beginning of the recovery.