After three years spent implementing its strategic plan, the Spanish group is able to announce strong growth with its EBITDA up 35.8% to nearly 150 M€ and its first profit since 2011. The outlook for 2016 is even more favorable.
The group's repositioning allowed for a significant increase in the global RevPAR, +11% on the entire year, of which 95% may be explained by the increase in average daily rate. The primary markets in Spain and Italy benefited from repositioning assets, the same should be true for operations in the Benelux and Central Europe where similar repositioning is underway.
The five-year business plan, initiated by the new CEO Federico Gonzalez Tejera, is ahead of schedule and the scope for outperformance has increased. According to its press release: "Execution to date has yielded a larger revenue base, a better-positioned, more streamlined and financially robust hotel portfolio and a substantial improvement in guest feedback." Since the plan was launched, 79 hotels received full or partial renovation, and 2016 is expected to witness the complete refurbishment of 27 more units.
Moreover, 42 hotels exited the portfolio since 2013 and 120 renegotiations of rental contracts must result in a more profitable portfolio with better potential for the future. In fact, the upscale brand, NH Collection now has 50 hotels and 7,715 rooms. 16 hotels and 2,660 rooms opened in 2015, under the brands NH Collection and Nhow (Rome, London, Amsterdam, and other destinations).
According to the group's, the outlook for 2016 is favorable, despite moderate growth in the economy. The company expects to see an increase by 8 % in revenues for this fiscal year, a like-for-like EBITDA of around 200 million euros and a leverage ratio down from 5.6 to 4.0%.
Strategic milestones for 2016 include the joint-venture with the group HNA (primary shareholder in NH Hotel Group) for the development in China of a chain of hotels under management contracts. Currently, the joint-venture is dedicated to integrating 6 hotels located in 4 cities (Beijing, Haikou, Dongguan and Tianjin).
The Spanish market is following a very positive trend at most of its locations (+16.3% in the RevPAR in 2015), in the same way as the Italian market with a recovery of close to 20% in the local RevPAR on the period. The forecast for the first quarter 2016 remains very favorable.
The RevPAR Benelux business unit grew by 7.1 % in 2015 driven by growth in the average daily rates. Central Europe was much more difficult with weak growth and a drop in visitors. Repositioning should make it possible to turn the situation in 2016.
Revenue for the America business unit, excluding the contribution by the Colombian chain, Hoteles Royal, acquired in March 2015, rose by 9.7 %, to more than 80 million euros.
- NHfocuses on Latin America to pursue growth in 2015
- Interview with Federico J. Gonzalez Tejera, Chief Executive Officer at NH Hotel Group
- NH Hotel group presents NH Collection
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