NH Hotel Group closed 2020 with losses of € 371 M

Destinations

This contingency plan applied by the company since the beginning of the pandemic, focused on preserving cash and controlling expenses, has managed to cushion by 60% the effect on results of this drastic drop in income. To do this, recurring operating expenses went from 1,069 million euros in 2019 to only 549 million euros in 2020, with a saving of 48.6%.

For Ramón Aragonés, CEO of NH Hotel Group, “the effort in management and cost containment has allowed us to endure the worst year in our history. We have taken all the necessary measures to get here, and we will continue to apply whatever is necessary until we overcome the current situation. Preserving liquidity and controlling spending remain the foundation of our strategy. The priority objective is to guarantee the sustainability of the Group and its brands, because it is the only valid result for our professionals, clients, suppliers, creditors and shareholders ”.

The company increased cost containment in the year by renegotiating rental contracts (with accumulated savings in fixed rentals of 63.6 million euros in the year, which represents a 25% reduction) and through the section on personnel (with an annual decrease of 46.7% as a consequence of the temporary measures of labor adjustment and reduction of working hours and wages. ”). The flexible structure is one of the Group’s competitive advantages, which allowed a rapid reopening of more than 300 hotels since June to capture the demand of national clients, reaching 80% of the open portfolio in the third quarter. Due to the impact of the second wave, with new perimeter closures and mobility restrictions after the summer, many hotels closed again, reducing the percentage of open hotels to 60% at the end of the year. By quarters, revenues were 279 million euros in the first, 30 million in the second, 148 million in the third and 82 million euros in the fourth.

The occupancy of the entire portfolio, including closed hotels, was reduced to 25% of the total in 2020, the company’s historical low from 71.6% in 2019. After the closing of the portfolio in the second quarter, it was recorded an occupancy rate of 30.8% in the third and decreased to 16.9% in the fourth. The low occupancy also caused the revenue per available room (usually called RevPar) to fall by 72.2%. Lower costs were decisive for NH’s pre-lease operating margin to reflect losses of just € 9.6 million in 2020.

The Group also prioritized strengthening and protecting the cash, which ended 2020 with an average monthly operating drain of 28 million euros. That way, he

The company closed the year with a liquidity of 346 million euros. NH ended the year with a net financial debt of 685 million euros, after an increase of 507 million euros in the year

The Group also prioritized strengthening and protecting the cash, which ended 2020 with an average monthly operating drain of 28 million euros. Thus, the company closed the year with a liquidity of 346 million euros. NH ended the year with a net financial debt of 685 million euros, after an increase of 507 million euros in the year.

The extension to 2023 of the maturity of the syndicated credit line RCF worth 236 million euros, allows not having to face any relevant debt maturity until 2023. Additionally, the commitments of the financial ratios are waived until the December measurement of 2021, including the ICO loan worth 250 million euros.

In the information sent to the regulator, NH values ​​that the flexible operating structure, cost control and financial resilience demonstrated in 2020 “give confidence” to overcome the important challenges of the first half of 2021, with demand that continues to be severely affected in the start of the year. To this end, the Group stresses that strict control and efficiency measures continue to be implemented to protect the business, investments will continue to be limited throughout 2021 and in the medium term, it will benefit from high brand recognition, excellent locations and strong market positioning once the recovery is activated.

No relevant expiration until 2023

The extension to 2023 of the maturity of the syndicated credit line RCF worth 236 million euros, allows not having to face any relevant debt maturity until 2023. Additionally, the commitments of the financial ratios are waived until the December measurement of 2021, including the ICO loan worth 250 million euros.

In the information sent to the regulator, NH values ​​that the flexible operating structure, cost control and financial resilience demonstrated in 2020 “give confidence” to overcome the important challenges of the first half of 2021, with demand that continues to be severely affected in the start of the year. To this end, the Group stresses that strict control and efficiency measures continue to be implemented to protect the business, investments will continue to be limited throughout 2021 and in the medium term, it will benefit from high brand recognition, excellent locations and strong market positioning once the recovery is activated.