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Spain's Melia lifts 2024 core earnings guidance to at least $563 million

Spain's Melia hotel and resort chain logo is on display at Hotel Melia Bilbao

By Matteo Allievi

MADRID (Reuters) - Spanish hotel group Melia on Thursday lifted its 2024 core profit guidance to at least 525 million euros ($563.3 million) on expectations tourism will remain strong, and said it would resume dividend payments for the first time in four years.

The Mallorca-based company had previously forecast core earnings before interest, tax, depreciation and amortisation (EBITDA) of 500 million euros.

Having not paid a dividend since 2019 due to the effects of the COVID-19 pandemic, Melia said it would resume payments, distributing 20 million euros to shareholders.

Leisure travel demand, which has boomed since the pandemic restrictions ended, remains strong despite a squeeze on household incomes due to higher prices.

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Following a good performance in Easter, the group said it expects a positive summer, with double-digit increases in bookings at Spanish hotels.

"The current rate of bookings, which is 34% higher than one year ago, continues to show no signs of slowing down, while the cancellation rate is falling," CEO Gabriel Escarrer told a shareholders' meeting on Thursday.

Melia said its first-quarter net profit was 5.5 million euros, compared to a loss of 2.8 million euros in the same period last year. Attributable net profit was 7.5 million euros, up from a 500,000-euro loss in the first quarter of 2023.

The group's revenue per available room, one of the industry's main performance gauges, rose 15.6% to 74.9 euros in the quarter. The increase was more than 30% in Spain among holiday hotels.

The luxury hotel firm added it aims to reduce its net debt ratio to 2.5 times EBITDA.

Melia also confirmed its prior target of signing 30 new hotels this year, which would represent an increase of about 7,000 rooms compared to 2023.

The group is aiming to grow in the luxury and premium segments, which are expected to represent 68% of its hotels in Spain in 2026 from 45% in 2019.

Shares in the group, which have risen 26% year-to-date, closed little changed on Thursday.

($1 = 0.9321 euros)

(Reporting by Matteo Allievi, Corina Pons and David Latona; Editing by Inti Landauro, Tomasz Janowski and Jan Harvey)