NH tops its 2019 performance with revenue of €1.03 billion and profit of €45 million

Madrid, 26 July 2023 – NH Hotel Group, part of Minor Hotels, generated €1.03 billion of revenue in the first half of 2023, which is 38.3% above the €742.4 million reported in the first half of last year. That record level of revenue is also 25% above the €822 million generated in the first half of 2019, the last full interim period before the onset of the pandemic.

The continued growth in revenue is attributable to a growth of 18.5% in the average daily rate (ADR), which increased from €114 in 1H22 to €135 this half. In addition, revenue per available room (RevPAR) increased by 44% in the first half of the year to €89 per night, compared to €62 in 1H22 and €72 in 1H19. Occupancy improved by eight percentage points in the first half of 2023 to an average of 66%, albeit still three percentage points below the 1H19 average. This gap has been narrowing gradually month after month. By the second quarter, occupancy in southern Europe was back at 2019 levels. The revenue momentum encompassed all the hotel chain’s destinations, while cost discipline drove recurring first-half EBITDA to €267.6 million, year-on-year growth of 43.3% and above the €257 million reported in the first half of 2019.

Thanks to that solid earnings performance, NH posted a total net profit of €45 million, compared to a loss of €15.4 million in the first half of last year and 13% above the €40 million total net profit reported in 1H19.

In the company’s opinion business momentum gathered pace in the second quarter of 2023, extending the sustained improvement etched out since April 2022. Solid demand in the leisure segment and the intense recovery observed in business travel are driving ongoing robust growth in the ADR, painting an optimistic outlook for the months ahead. The growth in revenue, coupled with rigorous cost discipline, partially mitigated the impact of the high prevailing inflation, enabling NH to outperform its 2019 metrics.

In the second quarter of 2023 alone, occupancy increased by four percentage points from 2Q22 to 73%. Although occupancy in the second quarter was still one percentage points below that of 2Q19, it was in line with pre-pandemic levels in the southern European markets. The ADR marked new records in May and June, averaging €152 for the second quarter, marking a growth of 18.4% from 2Q22 and of 23.7% from 2Q19 (€110).

In the second quarter, NH recorded revenue of €619.7 million, up 21.8% from the €508.8 million generated in 2Q22. Second-quarter net profit amounted to €81.1 million, a growth of 31.7% from the €61.6 million reported in 2Q22.

By country, occupancy in Spain was 73% in the first half, down one percentage point from 1H19, whereas the ADR was €134, compared to €116 in 1H22. Italy was home to the biggest increase in the ADR, which reached €175 in 1H23 compared to €141 in 1H22, while occupancy averaged 66%, one percentage point higher than in 1H19.

In Benelux, the ADR was €156 in 1H23 compared to €133 in 1H22, with occupancy at 64%, six percentage points below that of 1H19. In Central Europe, the ADR increased from €98 in 1H22 to €116 in the first six months of this year, whereas occupancy was eight percentage points below that of 1H19, at 62%. In Latin America, the ADR increased from €67 to €80 in the first half of this year and occupancy, at 65%, was seven percentage points above the 1H19 equivalent.

The company’s healthy cash flow generation in the first half of the year enabled a €62 million reduction in net debt in the first six months to €246 million as of the June close. Ample liquidity, of over €570 million at the June close, enabled the repayment in July of the $50 million loan arranged in 2018 to fund the refurbishment of NH Collection New York Madison Avenue, framed by the goal of continuing to deleverage in the current environment of high interest rates and keeping exposure to floating-rate debt at under 15% of the total.