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-The Company increases its net profit to €9.7m in the first-half -

• A healthy performance in the Group's main markets drove revenue growth of 7.5% to €715.1 million and EBITDA growth of 27.4% to €73 million in the first half of the year

• The momentum in RevPAR extended into the second quarter (+6.7%), driven mainly by growth in the average daily rate (+6.1%), with NH Hotel Group outperforming its direct competitors in its main destinations where the Company operates

• The second quarter was marked by substantial improvement in recurring net profit, up €16.5 million year-on-year, and first-half net profit rose to €9.7 million from losses of €17.4 million in 2015

• The Company's positive business performance is reinforced by the improved credit rating by Moody's, having just assigned it a first-time corporate family rating of “B2”

MADRID - 29 July 2016 - NH Hotel Group continues to show the positive impact of all the initiatives being executed under the scope of its business plan, as evidenced by its first-half earnings performance, presented today, which revealed solid growth in consolidated revenue, EBITDA and net profit of the Group.

First-half 2016 earnings performance

The excellent revenue growth sustained by NH Hotel Group continues, with the Company reporting year-on-year first-half revenue growth of 7.5%. More specifically, the Group reported revenue of €715.1 million in the first six months of 2016, driven by a strong performance in key markets such as Spain (+13.8%) and Central Europe (+11.4%), both of which registered double-digit revenue growth, in the second quarter. The Italian business unit, affected by a tough comparative due to the Universal Exhibition hosted by Milan last year, fully offset the absence of this major event with a strong performance across Italy's secondary cities. In parallel, the trend in Benelux was positive despite the impact of the refurbishment work planned for the last quarter, and the Americas’ business unit was strong across the board in local-currency terms, absorbing almost all of the adverse impact of the exchange rate.

The price management strategy implemented in the first half enabled the Group to replace less profitable room rates as a result of the segmentation strategy initiated last year. In the first six months, the Group registered growth in revenue per available room (RevPAR) of 6.5%, driven mainly by price growth of 5.1%, as well as an increase in occupancy of 1.3%. Note that RevPAR growth in the second quarter was 6.7%, 91% of which driven by growth in the average daily rate (+6.1%), while the occupancy rate was broadly flat (+0.6%). Indeed, the strategy implemented enabled NH Hotel Group to outperform its direct competitors in its main destinations once again this quarter.

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First-half consolidated EBITDA rose by 27.4% to €73 million, despite the adverse effect of exchange rates in some markets and other factors such as a still-weak Belgian market in the second quarter.

Net profit, including non-recurring items, came to €9.7 million in the first half, marking a €27 million improvement year-on-year (1H15: net loss of €17.4 million). It is worth highlighting the positive trend in recurring net profit in the second quarter, sustained by underlying business momentum: the Company reported a recurring net profit of €32.2 million in this period.


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Improvement in the Group's financial position

Net debt stood at €801 million at 30 June 2016, down €37 million from year-end 2015, thanks to satisfactory cash flow generation during the period, as the repositioning investment effort made during the first half was financed almost entirely by proceeds from the sale of non-core assets.

Status of the strategic business plan

At the half-way mark of its five-year business plan, NH Hotel Group has fully repositioned 52 hotels; six additional refurbishments are in progress and another seven are due to start next year. By year-end 2016, most of the capital expenditure allocated to portfolio upgrade work will have been executed and 83% of the planned refurbishments (full and partial) will be completed.

With more hotels in perfect shape and a portfolio gradually gaining weight in the premium segment - where it operates under the NH Collection and nhow brands - the Company is witnessing a significant improvement in its consumer’s experience and feedback. NH Hotel Group is currently the Spanish hotel chain with the most worldwide hotels certified as excellent by the travel portal TripAdvisor. 35% of its properties rank in the top 10 in each destination when travellers perform a search using this engine.

This improvement in consumer feedback, which is being shaped by: (i) a unique end-to-end operational promise for each of the Group's brands; (ii) hotel refurbishment in each market; (iii) a renewal of the room basics (exclusive mattresses, premium showers, next-generation LED TVs, new amenities and salon hairdryers); (iv) redefinition of the gastronomic offering, now broader and healthier; and (v) a more efficient price management strategy supported by sharper predictive technology, is driving sustainable growth in RevPAR.

The effort underway to internationally roll out NH Collection, the Group's upper-upscale brand, and the positive impact this initiative is having on its overall image and ADR also stand out. In total, the Company has 63 NH Collection hotels in operation at present. In parallel, new nhow properties are due to come on stream in the coming years, with three projects under execution in core destinations for this brand such as London, Amsterdam and Santiago de Chile.

The Group continues to forge ahead with its expansion plans for strategic markets, reinforcing its presence in Europe and adding to its Latin American portfolio (9 hotels/1,283 rooms signed in the first half in destinations such as Venice, Antwerp, Monterrey, Mexico City and Eindhoven, among others). All these new rooms have been signed using capital-light formula such as management contracts and leases, enabling the Group to finance and develop its business operations without having to increase leverage. Also during the first half, the Company opened four new hotels/541 rooms in Madrid, Guadalajara (Mexico), Rome and Bariloche.

Execution of the portfolio optimization plan is progressing ahead of expectations: by June 30th realized asset sales produced an income of €76 million. Including the transactions closed in July, 73% of the proceeds target set for the full year has already been met.

NH Hotel Group highlight that the outlook for the rest of 2016 is positive, enabling it to reiterate its guidance for recurring EBITDA in the order of €190 million as well as its target of bringing Group leverage down to 4 times (net debt/recurring EBITDA) by year-end.

Moody’s has assigned NH Hotel Group a first-time corporate family rating of “B2”. The outlook on the rating is stable

The prestigious credit rating agency Moody's has assigned NH Hotel Group a corporate family rating of “B2”, thereby improving the Company's existing credit ratings. The rationale for NH Hotel's first-time assessment of “B2” lies with the fact that the Company is expected to “benefit from the successful implementation of its comprehensive turnaround plan, improved liquidity and 'asset-lighter' focus”.

The stable rating outlook, meanwhile, reflects Moody's expectation that NH Hotel Group will continue executing its five-year plan as outlined and continue to realize RevPAR gains similar to its results to date, while maintaining adequate liquidity.

Like-for-like hotel business performance by market

(1H16: like-for-like hotel data + hotels under refurbishment) ________________________________________

Spain continues to perform very well, boosted in the second quarter by a healthy showing in Madrid as well as excellent performances in Barcelona and Valencia, where RevPAR increased by 17.6% and 22.3%, respectively. RevPAR across this business unit as a whole registered growth of 15.3% in 1H16, driven by growth of 8.9% in the ADR and of 5.9% in the occupancy rate. Revenue rose by 16.5% year-on-year, while EBITDA soared 121.5% in the first six months of the year.

Italy countered the absence of the Universal Exhibition hosted by Milan last year with the positive impact of the refurbished hotels and a strong performance across secondary cities. Like-for-like RevPAR decreased a slight 1.2% in Italy in 1H16, without factoring in new openings. Adding these in, RevPAR growth was 1.7%. First-half revenue growth in the Italian market was 2.9%.

RevPAR in the Benelux business unit rose by 2.2% in 1H16, driven in full by stronger pricing. Revenue in this unit was flat due to a decline in the relative contribution by the Brussels hotels, mitigated in full by a strong performance in Amsterdam.

Central Europe saw its RevPAR increase by a magnificent 8.4%, with prices up 6.7% and occupancy slightly higher, at 1.7%. Revenue in this market rose 7.2%, boosted by a favourable trade fair calendar.

The America business unit posted healthy revenue growth in constant-currency terms. However, its contribution to Group earnings upon consolidation was adversely affected by currency trends (-5.9%). Note that the above drop in reported revenue, shaped by currency devaluation, was partially absorbed at the EBITDA level thanks to the Group's cost control plan in this region.

By region, Mexico reported local-currency RevPAR growth of 22.7% in 2Q16, driven by price growth of 16.6%. Mercosur, meanwhile, registered local-currency RevPAR growth of 36.0% last quarter, underpinned by growth in the ADR of 36.9%. Lastly, Colombia posted revenue growth of 7%.

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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.