NH returns to profit and improves pre-pandemic revenues
NH Hotel Group settles accounts with the pandemic and improves sales. The group controlled by Minor International achieved total revenues of 1,759 million euros in 2022. This volume is more than double the 834 million euros of 2021 and, at the same time, represents an improvement of 2.4% compared to those achieved in 2019 (1,718 million euros).
Broken down by quarter, last year’s revenues were 234 million in the first quarter, 509 million in the second, 516 million in the third and 501 million in the fourth.
516 million in the third and 501 million euros in the fourth.
Pricing strategy and cost control have enabled gross operating profit (Ebitda) to reach 519 million euros. This is equivalent to 94% of the 2019 figure, mainly due to the negative impact of the first quarter of last year. The company indicates that the strong recovery in sales has allowed it to achieve a net result of 76 million euros. This is the first positive annual result since the health crisis.
El grupo confía en compensar la ralentización del oocio con la reanudación de grandes congresos y viaje internacionales
If the omicron effect in the first quarter is discounted, between April and December 2022 the net profit was 156 million euros. This is 29% more than in the same period of 2019. In addition, capital gains from the rotation of non-strategic assets contributed EUR 100 million to NH Hotel Group’s cash flow.
NH is relying on the resumption of large congresses and long-haul international travel to grow its sales. Above all, both segments, together with the continued revival of business travel in large corporations, will offset any occasional slowdown in demand in the leisure segment.
Debt reduction
NH’s net financial debt was reduced from EUR 568 million in 2021 to EUR 308 million at the end of 2022. This reduction was due to strong cash generation, the contribution of asset rotation, as well as higher sales.
In this respect, EUR 200 million of the EUR 250 million ICO loan granted during covid was repaid last year. In January 2023, the company repaid the remaining EUR 50 million of the syndicated loan, reducing its exposure to variable cost debt from 47% to 25%, an additional strength in the face of possible rises in the Euribor.
A large part of all these improvements can be explained by the recovery of average prices (ADR) and revenue per available room (RevPAR), which offset the lower occupancy level in 2022 compared to 2019. Thus, NH Hotel Group’s RevPAR averaged 74 euros, in line with the equivalent figure for 2019 and despite the negative impact of the first quarter’s omicron.
The upward trend was even stronger in ADR, from an average price per day of €90 in the first quarter to €128 in the fourth quarter. ADR growth compared to 2019 was 19% and, excluding the first quarter, the increase was 22%. Average occupancy in 2022 was 61%, penalised by the omicron effect which reduced it to 40% between January and March.
In Spain, the average room rate for 2022 as a whole was €123 per day, 10% higher than in 2019, while average occupancy was 69%, five percentage points lower than in 2019. The increase in revenue was due to the excellent performance of secondary cities throughout the year, and the significant upturn in Madrid and Barcelona from the second quarter onwards with the reactivation of business travel.
