The positive start to 2014 evidences the strength of NH's business plan

Like-for-like revenue in the recurring hotel business registered first-quarter growth of 2.5%

• Execution of the initiatives contemplated in NH’s five-year business plan is progressing on schedule and is beginning to be tangible in the group’s results • Positive performance in hotel activity across all Business Units on a like-for-like basis, with growth in occupancy rates significantly outpacing growth in operating expenses • Lease costs down a substantial 3% in the first quarter • The group managed to absorb the drop in sales as a result of hotels exited in 2013, with a significant impact on recurring EBITDA • Year-on-year growth in consolidated net profit of 7% • NH signed an agreement in April for the acquisition of Intesa Sanpaolo’s shareholding in NH Italy, the division which manages the group’s hotel business in Italy, as well as operating hotels in Germany, Belgium, the US and the Netherlands

NH Hotel Group presented its first-quarter 2014 results today, evidencing the ongoing improvement in earnings momentum initiated in 2013, as anticipated in its business plan.

Throughout the first quarter, the company made further progress on the key lines of initiative enclosed in this five-year plan, which are beginning to have an impact on the group’s earnings. Among the various initiatives currently being deployed, it is worth highlighting:

Repositioning plan – encompassing around 30 hotels set for refurbishment, with work already complete at two establishments (NH Embajada in Madrid, Spain and NH Firenze in Florence, Italy);

Brand management – the new corporate name and brand segmentation strategy designed to clarify the value proposition targeted at each guest profile were announced in February. Under the slogan, “NH, that’s me”, the group launched a global advertising campaign in April across all its business units, with a strategic focus on the Spanish, Dutch, Italian and German markets, in a bid to boost brand recognition worldwide, position NH as the hotel of choice among its target audience and communicate the company’s new value proposition.

Pricing and revenue management – the redefinition of the various room categories and price strategy in light of competitor positioning and the group’s hotel portfolio is complete. The new strategy has been pilot tested at 10 properties and is fixed for rollout in all remaining hotels between May and September;

IT - migration of the back office systems over to SAP is complete in Spain and will continue in the other markets in the months to come. Front-office migration is due to start in July. In addition, in parallel to the marketing campaign, the website has been revamped and new mobile apps launched;

Support functions – start-up of a shared services centre to handle administrative tasks in Spain. This service is in the process of being strengthened;

Disposals and Asset Optimization – the lease savings locked in under this strategy are already running at 45% of the target for the year.

First-quarter 2014 earnings performance

In terms of consolidated revenue, it is important to point out that multiple hotels ceased to contribute significantly to the topline in the course of 2013 either because they were sold, were exited as they were deemed non-core or due to a change in operating regime. This has a material impact on consolidated revenue, which narrowed a slight 0.6% year-on-year to €271.9 million.

Throughout the first three months of the year, the indicators used to take the temperature of the hotel business performed well, in line with the company’s expectations. As a result, like-for-like revenue in the recurring hotel business rose by 2.5% in the first quarter, driven by similar growth in revenue per available room (RevPAR), which was higher across all of the group’s business units, despite adverse currency trends in Latin America.

The growth in RevPAR in the first quarter extends the turnaround observed in 3Q13 (+1.8%) and 4Q13 (+2.7%); the growth of 2.5% registered in 1Q14 marks a very substantial improvement compared to the year-earlier performance (RevPAR 1Q13: -1.5%).

This strong start to the year was driven mainly by growth in the occupancy rate of 3.1%. It is worth underscoring the considerable effort made to contain operating expenses during the period: the growth in these key business metrics more than doubled growth in expenditure.

Elsewhere, and in line with the measures rolled out under the umbrella of the company’s business plan, the ability to unlock recurring improvements in the group’s earnings performance was also tangible in the initiatives undertaken to cut lease expenses. NH continues to reduce its lease cost in 2014 by renegotiating certain contracts and abandoning other loss-making agreements, offsetting the impact of rent increases negotiated in prior years and inflation adjustments.

The group’s recurring first-quarter EBITDA narrowed slightly year-on-year (down by €0.6 million), driven by the deconsolidation of numerous hotels which accounted for an earnings contribution of €1.2 million. However, the group cushioned 67% of the revenue contraction at the EBITDA level. In terms of the bottom line, the net loss, including non-recurring items, narrowed by 7% year-on-year.

Earnings performance by Business Unit

The trend in Spain in the first three months of the year confirms the group’s outlook for this market; growth in occupancy and average prices unlocked a better RevPAR performance than in any quarter of 2013. The Madrid and Valencia markets have both turned the corner and are showing clear signs of recovery. Healthy business volumes, coupled with the positive take-up for the group’s new pricing strategy and substantial lease savings, enabled this business unit to register EBITDA growth of 41%.

The Italian market extended the positive trend witnessed in 2013, registering growth of almost 3% in prices on a like-for-like basis, driven by stronger demand and slight growth in the ADR. January was particularly strong, thanks to excellent performances in cities such as Milan and Rome, whereas the March results are not comparable due to the way Easter fell this year compared to last and the choice of new Pope in 1Q13.

Central Europe has been sustaining RevPAR growth since 2Q13, driven by growth in occupancy and prices. The main German city destinations posted uneven performances due to the timing of trade fairs. Cities such as Cologne, Dusseldorf and Nuremberg were strong, thanks mainly to a number of trade fairs and congresses, whereas others, such as Berlin, Frankfurt and Munich, were weaker, marked by a slow January.

Benelux, UK, France & Africa presented much higher RevPAR growth quarter-over-quarter, with occupancy up and prices down. Occupancy in this unit has been rising since 2Q13, offsetting the downtrend in average prices. Price weakness was the result of a poor January; the market was stronger in February and March. Certain cities, such as Amsterdam and London, however, stood out registering revenue growth of 7.5%.

Americas registered RevPAR expansion of 38% on a like-for-like basis, thanks to a spike in occupancy of 16% and growth in average prices of 19% in constant currency terms.

The growth in occupancy and average prices in Mexico was driven by the re-segmentation strategy pursued in recent months, coupled with healthy local economic growth. RevPAR growth in Argentina, meanwhile, was the highest across the company in constant currency terms, which is particularly noteworthy in light of the fact that the first quarter was marked by holidays and a lack of major trade fairs or congresses.

Real estate

The real estate activity posted revenue of €3.2m in 1Q14, compared to €2.1m in 1Q13. The deeds for the sale of one villa and one mooring were signed in 1Q14. Meanwhile, through its investee Residencial Marlin, the unit signed deeds on two apartments at an amount of €0.69m, compared to two homes for €1.05m in 1Q13.

First-quarter 2014 earnings highlights

Trend in the main hotel business metrics by quarter in 2013 and 2014:

ADR: average daily rate

RevPAR: Revenue per available room

Other significant developments in 2014

NH Italy: NH Hotel Group signed an agreement in April for the acquisition of Intesa Sanpaolo’s shareholding in NH Italy, the division which manages the group’s hotel business in Italy, as well as operating hotels in Germany, Belgium, the US and the Netherlands. The acquisition will take place by a capital increase in NH Hotel Group through a non-monetary contribution of the 44.5% in hands of Intesa. Specifically, the transaction will entail the issuance of 42 million new shares at an issue price of €4.70 (par value of €2.00 and a share premium of €2.70). Both the equity issue and the appointment of a new director to represent Intesa will be submitted for approval at the upcoming Annual General Meeting. When the deal closes, NH will own 100% of NH Italy, giving it greater decision-making autonomy and flexibility with respect to the establishments operated by this investee.

About NH Hotel Group

NH Hotel Group ( is Europe’s third-ranked business hotel chain. The Company operates close to 400 hotels with almost 60,000 rooms in 28 countries across Europe, the Americas and Africa, including top destinations such as Amsterdam, Barcelona, Bogota, Berlin, 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 en

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 and