NH tops expectations and delivers EBITDA growth of 35%
The Company posts first-quarter bottom-line growth of 24%
revenue and recurring EBITDA in a quarter marked by strong progress on the
Group's business plan and the acquisition of Colombian chain Hoteles Royal
The hotel business
performed well with all markets posting ADR and RevPAR growth thanks to the
host of initiatives set in motion, the experience afforded by the new
operational promise and strong metrics at the re-positioned hotels
as the quarter unfolded with March staging a very promising performance
Hoteles Royal's results have been consolidated for the first time from March and the integration plans are progressing as expected
Madrid, 15 May 2015. NH Hotel Group presented its first-quarter 2015 results which continue to display growing momentum, in line with the healthy performance evidenced by the Group over the course of last year. The Company managed to surpass expectations for the quarter, which was shaped by the acquisition of Colombian hotel chain Hoteles Royal and by the continued implementation of the various initiatives contemplated in the Group's five-year business plan.
In the first three months of the year, which is usually the least significant quarter due to seasonality, recurring revenue rose 4.5% year-on-year to €278.1 million, while recurring EBITDA jumped 35%. It is worth noting that EBITDA growth would have been higher if exchange rate trends had been more favourable last quarter.
The hotel business was shaped by significant growth in revenue per available room (RevPAR) in all of the Group's markets, driven by higher average daily rates (ADR). Indeed, NH Hotel Group registered its fourth consecutive quarter of price growth. First-quarter consolidated RevPAR rose by 5.8% and the average daily rate increased by 7.4%, while occupancy trended somewhat lower due to the withdrawal of certain negotiated rate packages that were less profitable during high season; this move will benefit the Group during the busier months by freeing up availability for other core segments.
Notably, RevPAR momentum accelerated month after month, notching up growth of 3.8% in January, 4.0% in February and 7.7% in March. Although the March numbers received a one-time boost from the new timing of the Mobile World Congress 2015 in Barcelona, the preliminary April figures confirm this positive trend.
The strong performance sustained across the board was primarily underpinned by the outcome of the battery initiatives set in motion under the umbrella of the five-year business plan being executed by the Company. NH Hotel Group is observing stronger guest feedback, with scores improving even at hotels that have not been refurbished (based on feedback left by guests on Trip Advisor), and a stronger price environment. The new operational and service promise, hotel repositioning and the launch of the NH Collection brand are some of the initiatives that are being welcomed by guests and having a positive effect on Group earnings.
More specifically, the hotels that had not initiated refurbishment work in the first quarter of 2014 sustained average RevPAR growth of 14.4% in 1Q15. Since the start of the plan's execution until the end of March 2015, 25 hotels have been refurbished and 112 have had their signage upgraded.
Meanwhile, the new NH Collection brand, which currently boasts 31 hotels, a figure slated to rise to 57 by the end of this year, is beginning to display its potential: 40% of these hotels already feature within the top 10 hotels by destination in the Trip Advisor city rankings.
The other initiatives contemplated in the business plan are also progressing to management's satisfaction, delivering stronger brand recognition and fostering guest loyalty as well as yielding management, operational and IT efficiency improvements.
As for the bottom line, the NH Hotel Group's loss narrowed by €9.5 million, marking a significant year-on-year improvement of 24.6%. Business momentum, coupled with strong progress on all the business plan initiatives, paints a bright picture for 2015: current guidance points to EBITDA growth of around 25% this year, fuelled by RevPAR growth of over 5%.
hotel business performance by Business Unit in 1Q15
(like-for-like data, including hotels being refurbished)
very strong RevPAR growth of 6.5%, driven overwhelmingly by rate growth of
8.7%, which was accelerated with respect to prior quarters. Revenue rose by
2.6% and the outlook for the second quarter is upbeat.
Italy continued to perform well, registering RevPAR growth of 7.0%, similarly underpinned by ADR growth of 8.7%. The outlook for the months ahead is very bright due to the Universal Expo scheduled to take place in Milan, a destination in which the Company boasts a significant presence.
Benelux is the business unit that released the most rooms at negotiated rates; as noted above, this strategic price move will benefit this market during the high season (second and third quarters). RevPAR in Benelux rose by 2.3%, driven by growth in the average rate of 4.3%. This business unit, particularly Amsterdam, is expected to perform well in 2015.
Central Europe registered RevPAR growth of 3.0%, underpinned by rate growth of 5.1%, despite the celebration of fewer trade fairs in the main city destinations. Munich stood out, with double-digit growth. Momentum is expected to gather pace during the second and third quarter of the year due to the impact of properties currently in the process of being refurbished. This market will be home to four NH Collection hotels by year-end 2015.
In America, region-wide RevPAR growth was 19.6%, or 11.7% in constant currency terms, driven primarily by rate growth of 20.0%. Both of the Company's operating regions, Mercosur and Argentina, performed well last quarter, particularly in terms of ADR, which jumped 21.4% in Mexico and 22.0% in Argentina.
In early February 2015, NH
Hotel Group agreed the acquisition of Latin American chain Hoteles Royal. This
acquisition makes the Company a key player in Colombia, while boosting its
presence in Chile and Ecuador and providing a solid platform for expansion in
Latin America. The deal adds 20 hotels with 2,257 rooms to the Group's
portfolio which offer a very good fit with those of NH in terms of product and
The integration of Hoteles Royal is progressing at a fast pace and is slated to culminate with the rebranding of this chain's hotels, system migration and the integration of the properties into the NH Hotel Group's sales channels this May.
About NH Hotel Group
NH Hotel Group (www.nh-hotels.com) is Europe's third-ranked business hotel chain. It operates close to 400 hotels with almost 60,000 rooms in 29 markets across Europe, the Americas and Africa, including top city destinations such as Amsterdam, Barcelona, Berlin, Bogota, Brussels, Buenos Aires, Düsseldorf, Frankfurt, London, Madrid, Mexico City, Milan, Munich, New York, Rome and Vienna.
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About NH Hotel Group
Over NH Hotel Group
NH Hotel Group is beursgenoteerd in Spanje met bijna 400 hotels in 30 landen in Europa, Afrika en Noord- en Zuid-Amerika. Onder de NH Hotel Group vallen de 3- en 4-sterren urban NH Hotels, de NH Collection flagship hotels, de nhow designhotels en de Hesperia vakantieresorts. Wereldwijd staan meer dan 20.000 medewerkers dag en nacht klaar om de beste service tegen de beste prijs te leveren voor de jaarlijks ruim 16 miljoen gasten. De hotels van NH Hotel Group zijn bekroond met de Zoover Award voor Beste Hotelketen 2014, 2015 en 2016. Kijk voor meer informatie op www.nh-hotels.com en www.nh-collection.com.
About NH Hotel Group
NH Hotel Group is listed on the IBEX 35 stock exchange of Madrid and has nearly 400 hotels in 30 countries in Europe, Africa and North- and South-America. The portfolio of the NH Hotel Group includes the 3- and 4- star urban NH Hotels, the NH Collection flagship hotels, the nhow designhotels and the Hesperia holiday resorts. Worldwide more than 20.000 employees work day and night to deliver the best service for the best price to the 16 million guests the hotel chain welcomes yearly. The hotels of NH Hotel Group have been rewarded with the Zoover Award for Best Hotel Chain of 2014, 2015 and 2016. For more information, visit www.nh-hotels.com and www.nh-collection.com.