- The swift recovery in leisure tourism since mid-February, coupled with reactivation of the business travel segment, have allowed to exceed monthly revenues of €100m in March with an occupancy rate of 53% and an ADR of €97
- In April, revenues have reached €140 million, as occupancy grew to 63% and pricing strategy allowed ADR to climb to €116, same level of the comparable perimeter in 2019
- Revenues for the quarter reached €233.7 million, almost four times more than in the same period of 2021, which, together with strict cost control policies, resulted in a positive recurring EBITDA in the first quarter of the year, reducing by 38% the losses of the period
- Fitch Ratings has recently upgraded corporate rating from ‘B-’ to ‘B’ with a stable outlook
Madrid – NH Hotel Group recorded revenue of €233.7 million in the first three months of the year, which is nearly four times more than the first quarter of 2021 (€62.3 million) but still 33.7% below pre-Covid levels. The Company expects to close that gap over the coming months, as the restrictions caused by the Omicron variant lasted for a very short period of time and the key business indicators – occupancy and average daily room rates – have been recovering month after month since mid-February.
So far this year, occupancy has reached 40% in the first quarter, growing from 53% in March to 63% in April. The ADR (Average Daily Rate) for the first quarter was 90 euros, with a relevant increase from 97 euros in March to 116 euros in April, the same level as in 2019. This upward trend in ADR continues in May, and this would imply approaching 2019 comparable RevPar level sustained by the ADR maximization strategy that partially offsets the lower occupancy.
According to Ramón Aragonés, CEO of NH, “the growth in business volumes began to gain traction in the second half of last year and has resumed intensely and quickly in the wake of the restrictions caused by Omicron, with a limited and temporary impact. The recovery has been gaining momentum in all our markets since mid-February. The Easter break, when we revisited pre-Covid levels, and the excellent trend in bookings, lead us to believe that 2022 will mark a full recovery”.
In the earnings report submitted to the Spanish securities market regulator (CNMV), the hotel chain notes the fact that the recovery in the leisure segment has been accelerating since mid-February, while the business travel segment is beginning to find traction, all of which translated into significant growth in occupancy and average prices in key city destinations. The hotel chain is also poised to benefit from its growing exposure to the mid-upper and upper segments of the market.
Between January and March 2022, all the European markets reported year-on-year growth in their RevPARs compared to the same period of the previous year. In Spain, first-quarter occupancy averaged 55%, a metric that jumped to 70% in March. The ADR in Spain, meanwhile, averaged €93 in the first quarter, which is above 2019 pre- Covid levels in most of the cities. It should be noted that, in April, the country as a whole exceeded 2019 levels in the average revenue per available room, known as RevPar.
In Italy, Q1 2022 occupancy averaged 41%, rising to 54% in March, while the ADR was €105 per room, slightly lower than 2019 levels. In Benelux, occupancy averaged 30%, rising to 47% in March and the ADR was also €105 in Q1, reaching in April average prices above 2019. In Central Europe, occupancy averaged 31% for the quarter with a 41% in March and the average daily rate for the quarter came in at €79, rising significantly in the last month. Lastly, occupancy in Latam averaged 46% (March: 54%), with the ADR averaging €63 per room and night.
NH was forced to close 15% of its establishments in January in the wake of the Omicron variant but its entire hotel portfolio has been open since March. Strict cost control and the initiatives rolled out to contain inflationary pressures drove recurring first-quarter EBITDA into positive territory: €9.2 million, up €47.4 million from the loss reported at the EBITDA level in Q1 2021 (-€38.2 million). In the first quarter of the year (seasonally the slowest in all its business markets), the Group reduced its recurring net loss by 38% to -€76.9 million (compared to a loss of -€124.4 million in the same period in 2021).
Having reduced its net financial debt by €29 million in the second semester 2021, excluding the capital increase, the Omicron impact in January and part of February drove a €31million increase in the Group’s net financial debt during the first quarter, to €599 million at the end of the quarter. In March the Group reached positive free cash flow and positive net recurring profit, as was the case in Q4 2021. Moreover, thanks to the debt refinancing processes achieved in 2021 with the extension of the maturities of the main debt facilities until 2026 and the waiver of financial covenants for all of 2022, the financial strength is further supported by an available liquidity of 481 million euros at the end of the quarter. Fitch Ratings has today upgraded corporate rating from ‘B-’ to ‘B’ with a stable outlook. The rating reflects ongoing business recovery and improved liquidity.
About NH Hotel Group, part of Minor Hotels
NH Hotel Group (www.nhhotelgroup.com) is a consolidated multinational player and a benchmark urban hotel operator in Europe and the Americas, where it operates more than 350 establishments. Since 2019, the Company has been working with Minor Hotels on integrating all of its hotel trademarks under a single corporate umbrella brand with a presence in over 50 countries worldwide. Together they have articulated a portfolio of more than 500 hotels operating under eight brands: NH Hotels, NH Collection, nhow, Tivoli, Anantara, Avani, Elewana and Oaks – to forge a broad and diverse range of hotel propositions in touch with the needs and desires of today’s world travellers.
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