After the Chairman and founder,
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The Annual General Meeting agreed to renew four directors, including the Executive Director of the company,
The non-executive Chairman of the company explained the most important impacts of Covid-19 on the tourism industry, highlighting the resilience of Melia, which he attributed in part to the significant strengths the company had when the pandemic began, particularly its financial solvency, the strong investment it had made in renovating and repositioning its hotel assets, its commitment to digitalisation and its effective crisis management.
65 years as Chairman
Escarrer Julia reminded attendees that MHI is celebrating its 65th anniversary this year, before highlighting the role and responsibility of family businesses - which the
He summarised the support offered by Melia to employees and its efforts to preserve employment, encourage teleworking and promote training and especially online training, while also accompanying its employees on an emotional level and protecting their health in all of their different workplaces. He then described the cooperation with the owners of many of the hotels operated by the company which has led to significant savings given the closure of hotels and absence of revenue, and how the company has complied with all of the subsequent agreements and commitments. With regard to suppliers, Escarrer Julia thanked most of them for their understanding and empathy, as well as for the solidarity shown by those that offered products and services free of charge to hotels that Melia offered to be converted into hospitals.
He also highlighted the company's relationship with and proximity to its customers, ensuring maximum flexibility and support, maintaining and even extending the benefits for loyal customers despite the decrease in sales, leading to 4% growth in membership of MeliaRewards in 2020 to a total of 13.5 million members. Escarrer thanked investors and shareholders for their trust and confidence and promised them that the company would recover and increase its valuation after the crisis. Despite continuing high volatility, he also emphasised how the market has recognised the value of
The Chairman ended his speech with the commitments of the company to society, the victims of Covid and essential workers, as well as the progress made in company strategy to combat climate change, despite the setback in the global environmental agenda caused by the health emergency. In this regard, he mentioned the use of 18 hotels as centres for quarantines or for essential workers, as well as donations and other types of support for employees in developing countries. He also expressed his satisfaction with the company being named the
Prudent management and strategic adaptation
Along with the competitive advantages mentioned by the Chairman, the vision of the company CEO and his ability to react allowed Melia to implement a highly effective contingency management system focused on key areas to ensure resilience: the safety of employees and customers, the preservation of employment and talent supported by furlough systems, and the liquidity and continuity of the business.
After recalling the key achievements in each of these areas, Escarrer explained how the company has prepared itself for the new post-Covid tourism age through a plan known as 'The Day After', deciding to take advantage of the circumstances to accelerate a reset of the business in terms of digitalisation, efficiency and sustainability. The progress made in digitalisation, the evolution of the organisation towards a more digital and efficient structure, and sustainability, allowed Escarrer to affirm that in normal business conditions and with revenues similar to those achieved before Covid, the company would see an improvement of 300 basis points in its operating margin.
Escarrer also explained the transition from a contingency management situation to a new strategy designed for the post-Covid environment and until revenue levels reach those of 2019 (which experts expect around 2024). The strategy prioritises creating an even more resilient company through growth in profitability and a consequent reduction in corporate debt.
Based on the 2030 strategic vision declared in the 2020 Strategic Plan, involving 'the aspiration to position ourselves among the world's leading hotel groups in midscale and upscale hotels, consolidating our leadership in the resort and bleisure markets and becoming a benchmark for excellence, responsibility and sustainability', Melia will focus over the coming years on boosting its sales and distribution capacity, which, as the pandemic has shown, is one of its most significant competitive advantages. At the same time, it will continue to seek high- quality, sustainable and profitable growth in its portfolio, driven by strong brands and a new 'affiliated by Melia' franchise model which allows third-party hotels to be added through highly flexible partnerships, something considered fundamental given the current market conditions.
Regarding company expansion, he stated that 11 new hotels have been signed up to date in 2021, a figure which is expected to more than double over the year. All of the hotels have been added under 'asset-light' formulas and all of them in resort destinations, the segment that is expected to be the quickest to recover after the crisis. Escarrer praised the launch of efforts to grow through franchises and 'affiliated by Melia' hotels, whose versatility and flexibility have allowed growth in holiday destinations in
The prelude to recovery
The Melia CEO insisted that caution is still required given the continuing low visibility surrounding international travel and the fragility of the health situation in certain markets, although he insisted that the start of a 'consistent recovery' is expected for the second half of this year. To support this, Escarrer quoted international air traffic data, the growth in bookings after the end of the State of Emergency in
Melia's exposure to the resort segment and its geographical diversification, has once again helped create a protective shield, as destinations such as
A year of responsibility
In recent years, the leader of
After recalling the guidelines indicated by the Secretary General of the
As industry leaders, Escarrer insisted that Melia has shown its responsibility and been involved from day one, not only in internal contingency management, but also in supporting society and defending of the industry before public authorities.
Finally, the Melia CEO reminded shareholders that while he always said that 2020 would not be a year for thinking about profits, but rather to demonstrate the company's resilience, preserve its value and prepare for the future, 2021 will be the year in which we will see a change in trends and the beginning of the recovery. ?
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