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5-Economic Value

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The current recession and volatility in financial markets mean that there is reduced visibility both with respect to bookings and the global activity of the Company, preventing Sol Meliá from giving specific forecasts for 2009. Predictions are subject to an exceptional degree of uncertainty and the risks of reduced expectations are prevalent in all companies in all industries.

All of the leading macroeconomic indicators such as the first results announced in 2009 foresee the tourism industry further deteriorating this year. Sol Meliá estimates that the current crisis may hit the Company particularly hard in the first half of the year, where the comparison with the previous year is more unfavourable and where the slowdown in consumer spending will be more significant. First estimates point towards a RevPAR decrease of 10% for the first quarter.

The Company vision of the market situation indicates a greater decrease in business travel due to company savings policies, as well as greater difficulties in island resort destination as a result of the downturn in the UK market and the depreciation of the pound. These effects are expected to be partially compensated by the comparatively better evolution of destinations in the Caribbean. In January 2009, global RevPAR fell by 10.0%, while in Mexico and the Dominican Republic the changes were -3.5% and 0.3% respectively.

With regard to the Sol Meliá Vacation Club, a greater slowdown in business is also expected due to the difficulties caused by reduced consumer spending in key feeder markets.

With reference to expected investments, the Group expects to invest less than 100 million Euros over 2009, fundamentally in product maintenance. As in 2008, the Company expects to focus growth on projects which are not capital intensive in order to retain the financial strength the Company currently enjoys, and on projects with high added value from the brand standards point of view, one of the strategic areas at Sol Meliá. In the coming years, Sol Meliá expects to add 6,150 rooms (18 hotels), 87% under management agreements and 13% on lease. Of these, 3,077 rooms (9 hotels) will open in 2009, 11% on lease and 89% under management.