NH Hotel Group Unveils A Recovery Plan Articulated Around Efficiency, Focused On Europe And New Initiatives To Attract Business Travellers

  • The Company’s shareholders approved the rights issue for capitalizing the €100 million loan advanced by its majority shareholder, Minor, while the Board agreed to a simultaneous rights issue so that all remaining shareholders can avoid dilution
  • This year and next the Company plans to implement an efficiency plan to drive digitalisation and execute a tailored plan for its luxury brand, Anantara, and its Tivoli resorts in the Algarve

NH Hotel Group’s shareholders attended the Company’s Annual General Meeting remotely today, ratifying the issuance of its financial statements and management report for 2020. CEO, Ramón Aragonés, took advantage of his presentation to provide insight into the key points of the Group’s recovery plan, which will focus on Europe, reinforcement of its highest-end brands, Anantara and NH Collection, and the Tivoli resorts in the Algarve, while developing an innovative offering for business travel which will take on a more hybrid and experiential format, opening the door to the SME segment.

In his speech to the shareholders, Alfredo Fernández Agras, the non-executive chairman of NH Hotel Group’s Board of Directors, highlighted the rapid deployment of the contingency plan set in motion by the Group in the face of one of the biggest crises in global tourism. He also expressed his satisfaction at how the Board has facilitated the strategic principles set by the Management Committee, particularly the safe-guarding of the firm’s liquidity and financial sustainability, two of the cornerstones around which the Company intends to articulate its recovery. “We have laid the foundations not only for getting back to where we were, but for becoming an international benchmark for the post-pandemic hotel experience”, he said.

At today’s AGM, the Company’s shareholders ratified the proposal to issue equity to capitalize the €100 million loan extended to NH by its majority shareholder, Minor International, as part of the financial structure and liquidity reinforcement strategy being executed by the Company since May. Simultaneous to that issue, the Board will launch a cash rights issue for the remaining shareholders for an additional and proportionate amount of up to €7 million. As a result, the Company will provide its shareholders the possibility of retaining their current ownership interests to avoid dilution. The new shares are expected to begin to trade next October. All terms of the two rights issues will be identical, including the issue price and discount, to be set in accordance with market conditions, as guided by the Company’s financial advisors.

Ramón Aragonés, CEO of NH Hotel Group, divided his presentation between an exhaustive review of the contingency plan executed by the Group in 2020 and a first glimpse into the recovery plan the Company has been executing since the start of the summer season. In his opinion, the recovery will initially be driven by the strength of the domestic demand, which accounts for an average of 7.3 stays out of every 10 in the eurozone as a whole. NH expects to benefit from that trend as it boasts a well-diversified portfolio across the main European markets, excellent locations and an improved customer experience, thanks to the recent introduction of contactless transactions, among other initiatives.

The Company has also launched a series of initiatives targeted at business travellers. Those initiatives include Smart Spaces, exclusive areas for working and holding small meetings in the Group’s hotels; Hybrid Meetings, events organised with a mix of in-person and virtual attendance from a range of places; Extended Stay at NH, special offers for stays of more than one week; and the NH+ Business Programme, a suite of additional benefits and discounts for SMEs.

Elsewhere, the hotel chain recently announced that it will join the Global Hotel Alliance (GHA) loyalty programme, which is expected to facilitate them access to new feeder markets. In parallel it plans to continue to pursue opportunities for managing hotels that are a good fit for the Group’s business objectives.

The Group expects to have all its hotels open within the next few days, having had 326 establishments open by the third week of June, which is just over 90% of the total. In June of this year, occupancy of the European open hotels climbed back to close to 40% and has gone on to increase considerably since May. Between now and 2024, the Group plans to open a further 3,700 rooms, with a strategic focus on the high-end brands and its core markets. In the last few weeks, the Group has opened the NH Collection New York Madison Avenue, the NH Hannover and the NH Collection Venezia Murano Villa. In addition, the Company is working on specific positioning plans for Anantara, its luxury segment brand, and its Tivoli resorts offering in the Algarve.

During his presentation, Ramón Aragonés stressed the fact that the Group would focus on an efficiency plan in 2021 and 2022, enabled by digitalisation. That plan includes the €34 million of annual cost savings captured due to the collective dismissal implemented at Corporate Services in Spain and other efficiency measures last April. Additional savings are expected to be captured over the coming quarters as part of a global plan in accordance with local legislations.

Re-election of directors

At the recommendation of the Nominating, Compensation and Corporate Governance Committee, the Company’s shareholders also approved the re-election of William Ellwood Heinecke, Emmanuel Jude Dillipraj Rajakarier and Stephen Andrew Chojnacki as proprietary directors. Rufino Pérez Fernández was ratified as executive director, having been appointed by the Board, availing of its co-option powers, in September 2020. Lastly, José María Cantero and Fernando Lacadena were re-elected as independent directors.

With respect to the corporate debt refinancing process, the CEO reminded his audience that NH Hotel Group had successfully issued €400 million of senior secured notes due July 2026 on the market. The proceeds have been used to repay the existing senior notes due 2023, in the amount of €357 million. The new notes carry a coupon of 4% and allow the Company to face no relevant debt maturities for the next five years.

The hotel chain has also agreed the extension of its €242 million revolving credit facility (RCF) from March 2023 to March 2026. Banks participating in this syndicated facility have proved their support by extending the financial covenants waiver for all of 2022. Elsewhere, in May, the Company had already extended the maturity on its €250m syndicated loan secured by Spain’s official credit institute (ICO) arranged in April 2020, until April 2026 with no amortizing schedule until maturity.

Ramón Aragonés believes that the proactive battery of financial measures, the rights issue and asset rotation strategy rolled out in recent months, most specifically the absence of relevant debt maturities for five years, endow the Group with solid foundations for leveraging the imminent sector recovery from an ideal position from the financial and capital structure standpoints.

About NH Hotel Group

NH Hotel Group is a consolidated multinational player and a benchmark urban hotel operator in Europe and the Americas, where it runs more than 350 hotels. Since 2019, the Company is working with Minor Hotels on integrating all of its hotel brands under a single corporate umbrella with a presence in over 50 countries worldwide. A portfolio of over 500 hotels has been articulated around eight brands – NH Hotels, NH Collection, nhow, Tivoli, Anantara, Avani, Elewana and Oaks – to forge a broad and diverse range of hotel propositions in touch with the needs and desires of today’s world travellers.

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