NH Hotel Group presents positive business performance at Annual General Meeting
NH Hotel Group confirms its upbeat guidance thanks to the positive evolution of its business plan
Year one of implementation of the business plan has fostered significant improvement in the performance of the hotel business, in the Company's image and in how it is perceived by the market and by travellers
The Company is outperforming its direct competitors on revenue per available room (RevPAR) in the bulk of its destinations and foreshadowed a strong 2Q15 in all markets, underpinned by estimated RevPAR growth of 11.4%
Management confirms guidance for 2015, which calls for RevPAR growth of between 5% and 7% and EBITDA growth of 25%, including the contribution by Hoteles Royal
MADRID, June 29, 2015 - NH Hotel Group held its Annual General Meeting today in its flagship NH Collection Eurobuilding in Madrid. The Company’s CEO, Federico J. González Tejera, took advantage of the event to update shareholders on the Company's business performance last year; he also overviewed all of the initiatives encompassed by the ongoing five-year business plan and reiterated upbeat guidance for 2015.
Specifically, Federico J. González Tejera said that “we are beginning to feel the impact of all of the transformation initiatives being executed by the Company, which are revealing strong potential going forward”, going on to stress that “rigorous compliance with the business plan initiatives, enhanced hotel user satisfaction, improved financial metrics across all business units and faster revenue growth relative to our competitors in most markets confirm that the Company as a whole is on target to deliver renewed growth”.
Some of the key milestones highlighted by the CEO were the growth in the bottom line, the start of tangible improvement in image in all of the Group's segments and acceleration of the growth plan in the wake of the acquisition of Hoteles Royal in Latin America.
Better positioning and profitability
The favourable trend in the hotel business, coupled with select repositioning and refurbishment in line with the NH value proposition, has driven guest satisfaction and Group earnings higher.
In 2014, the Company recorded recurring revenue of €1.27 billion, €12.5 million more than the year before, despite the adverse impact of exchange rate trends and the deconsolidation of assets that no longer fitted with the new standards introduced by the Group for its various trademarks. These adverse effects were offset by growth in business volumes and portfolio fine-tuning.
The impact of the initiatives being executed by the Company under the scope of its business plan is making a very significant contribution to improving the recognition and reputation of the Group's hotels in its various markets, enabling consecutive quarterly growth in average daily room rates (ADR) and RevPAR throughout 2014, with these metrics ending the year 1.7% and 3.6% higher, respectively.
As a result, NH Hotel Group reported growth in recurring EBITDA of 2.5% last year and bottom-line growth of 76%.
Elsewhere, the Group's CEO noted that the Company had topped guidance for proceeds from asset sales, having disposed of Sotogrande for €178 million, paving the way for the early non-scheduled repayment of €20 million of borrowings with the attendant deleveraging effect, while also providing the financing for the acquisition of Hoteles Royal.
Progress on the business plan
NH Hotel Group has implemented a new brand architecture and guest experience as part of the ongoing development of its new guest value proposition in all its business markets.
Against this backdrop, at the Annual General Meeting, management highlighted the take-off of its premium brand, NH Collection, which now operates 43 establishments, with another 14 in the pipeline by year-end 2015. Perception of the new brand is proving very positive, as evidenced by the trend in the guest feedback ratings tracked internally in the form of satisfaction surveys and externally by travel websites that base their recommendations on users' opinions.
Federico J. González Tejera also flagged the fact that the membership of new loyalty programme, NH Rewards, which has been segmented into four categories (Blue, Silver, Gold and Premium), has topped 4.7 million. Thirty per cent of the Group's revenue is currently generated by members of this programme.
NH Hotel Group has been stepping up its communication and marketing efforts in all its markets with information campaigns about the new NH, its brands and the various experiences associated with each. In parallel, the Company has launched a new Group website as well as a dedicated NH Collection website, both of which have been given a more contemporary, user-friendly and aesthetic design, while improving the booking and browsing processes. These initiatives are combining to enhance brand perception in the Group's key markets, including Spain, Italy, the Netherlands and Germany.
In the Meetings and Event segment, NH launched NH Meetings, a package of services articulated around NH's unique, touchstone values: extraordinary service, the best locations and unbeatable value for money as well as the most quality-consistent and versatile portfolio of meeting rooms in the market. NH Meetings has been reinforced by the installation of 3D holographic projection technology and telepresence and interactive collaboration systems for the first time in the hotel business; these technologies have been installed permanently in some of the Group’s hotels to ensure high-impact, high-performance meetings and events. In addition, the Group is currently working to further strengthen its value proposition in this segment thanks to the interactive 3D Virtual Planner® application, a solution that will be accessible from NH Hotel Group's website and will enable customers to take a three-dimensional virtual tour of the event rooms offered by the Group and personalize their configuration depending on their specific needs and requirements.
As for the repositioning plan, the Company refurbished eight establishments last year, is upgrading another 33 in 2015 and plans to work on another 27 in 2016, bringing total hotel refits to 68. A further 48 properties will benefit from smaller-scale reforms during this period. NH Hotel Group's repositioning plan entails €227 million of capital expenditure and affects hotels representing roughly 50% of the Company's revenue.
Turning his attention to the growth plan, NH's CEO underscored the fact that strong business plan execution had made it possible to accelerate the Company's growth targets without jeopardizing its financial commitments, thanks to the sale of the Sotogrande assets. In 2014, the Group added four hotels to its portfolio and in February 2015 it acquired Hoteles Royal in Latin America, a chain which consolidates the NH brand in Colombia (catapulting it to the number one spot in Bogota by number of rooms) and increases its footprint in Chile and Ecuador. In tandem, the Company is making progress on its joint venture in China, which is planning to develop a portfolio of hotels in this Asian country.
Lastly, the CEO alluded to the IT system upgrade plan, which is focused on fine-tuning management and organisational capabilities and is advancing as scheduled, and to the shift in corporate cultural, which is also going according to plan.
For 2015, NH Hotel Group said that is was confident that the improvement in the key business metrics will continue; specifically, management is expecting growth in RevPAR to almost double that of 2014, at between 5% and 7%. The Company is also looking for growth in EBITDA of around 25%, underpinned by the improvement in the key hotel business metrics and the first-time contribution of the hotels belonging to the Royal chain which are already being consolidated.
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, America 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.