Melia returns to quarterly profit as Cuba exit impact eases
Spain's largest hotel chain returns to profit in the third quarter after a first-half loss tied to its withdrawal from Cuba operations. Summer resort demand supports revenue and room-rate growth, while fourth-quarter bookings rise despite a warning over transport disruption in southern Spain.
Highlights
- Melia reports third-quarter consolidated profit of 89.4 million euros, surpassing analysts' forecast of 80.3 million euros and rebounding from a first-half net loss of 7.5 million euros.
- Revenue increases 8% year-on-year to 659.6 million euros and EBITDA rises 4% to 198.3 million euros, in line with LSEG consensus estimates.
- Melia expects high single-digit full-year RevPAR growth and double-digit increase in fourth-quarter direct bookings, but warns Madrid-Seville rail disruption may dampen southern Spain demand.
Third-quarter earnings recover after Cuba withdrawal
As reported by Reuters, Melia posts a consolidated profit of 89.4 million euros in the third quarter, above analysts' average forecast of 80.3 million euros and broadly recovering from a first-half net loss of 7.5 million euros linked to its Cuba exit.The Mallorca-based company says demand at its resorts during the summer season offsets the effect of ceasing operations at its 34 hotels in Cuba, a process that occurs between June and July amid tighter U.S. sanctions and the island's worsening economic crisis.
Revenue rises 8% from a year earlier to 659.6 million euros. Earnings before interest, taxes, depreciation and amortization increase 4% to 198.3 million euros, broadly in line with the consensus estimate in an LSEG survey.
Bookings outlook tempered by Spain rail disruption
RevPAR rises 7.5% at constant currency in the third quarter, excluding the effect of discontinued Cuba operations, and Melia expects that measure to grow in the high single digits for the full year.The company says fourth-quarter bookings through its direct sales channels are increasing at a double-digit rate from a year earlier. Still, it warns that the deadly Oct. 28 train crash on the Madrid-Seville line and the suspension of service there could slow demand for its southern Spain destinations in the fourth quarter.
In our earlier article on the IMF’s October outlook for Europe, we highlighted how the region’s recovery remains uneven, with improving prospects in Germany and the UK, relative strength in Spain, and continued weakness in France. We also noted that persistent inflation, tight fiscal room, and competitiveness gaps are shaping borrowing conditions and credit sentiment, which can influence corporate performance across European markets.
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