Meliá eliminates salary cuts for the CEO and directors

The CEO of Meliá, Gabriel Escarrer, has taken advantage of the holding of the general meeting of shareholders of Meliá Hotels International to end the coronavirus crisis. “In July, after fifteen months in negative, ebitda is positive again. The big change is that, thanks to vaccines and transmission control, the company is able to place the start of the recovery in the second half. These green shoots are a prelude to the recovery in the vacation sector, “he stressed during his speech. Some first signs of recovery that will lead, according to Escarrer, to the first Spanish hotel company stops burning cash after fifteen months in a row due to the absence of tourism and the lack of income. “If the rate of recovery continues, Meliá will stop consuming cash on July 1, starting to generate it.”

This economic boom will allow Meliá to eliminate the salary cuts applied to its top leadership during the past year. In a relevant event to the CNMV after the holding of the shareholders’ meeting, the hotel company confirmed the recovery of the full remuneration of the CEO and the directors. In the first place he assured that the 25% reduction in the fixed remuneration of the CEO ended on June 1, 2021, while the 50% reduction in the remuneration of the members of the Board of Directors for attending committees was also without effect from June 1, 2021.

A radically different situation from the one at the end of 2020 and from the first half of this year. In 2020 it closed with losses of 426 million euros, above the 371 million that NH left or the 137 of Barceló. “We closed last year with a liquidity position of 316 million, with all debt maturities for 2021 refinanced, with a 50% reduction in operating costs and we are profiling the sales of some assets,” he said. At this last point it is situated the agreement, still in negotiation with Bankinter, for the creation of a joint management company for the sale of eight hotels, which will remain in the hands of Meliá, and with which it expects to enter 200 million euros. “Now we can meet our commitments and reduce debt. But we are hoteliers and our role is to open hotels. Now we have 200 open around the world, of which 70 are in Spain, and the goal is to exceed 300 by the end of the year “. The current portfolio is made up of 317 properties and if the signed projects are added the sum scales to 368. Only in Spain there are 2,800 employees in ERTE.

Escarrer explained that the improvement in demand is not only limited to the Spanish market, but is also a global phenomenon, which benefits companies with a strong international presence such as Meliá, with 368 hotels around the world, of which more than half are outside of Spain. “The Spanish market, which has been content so far, has launched into booking its vacations and now accounts for 55%. The change in trend is observed in the decrease in cancellations, when a few months ago they far exceeded new reservations “.

The CEO acknowledged that although reservations in destinations such as Mexico and the Dominican Republic are at 2019 levels due to extensive vaccination in the US, its main issuing market, in the case of Spain “reserves for the third quarter are already above 2019 in the absence of the United Kingdom.” In the event that British tourism obtains the green light on June 24 to visit at least the Canary Islands and the Balearic Islands, where an important part of the Meliá hotels are located, the forecasts should be estimated upwards.

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