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Dear shareholders,
We had a bittersweet year in 2003.
On the positive side, I would like to highlight the excellent
progress of the Latin American business, the very successful
cost-cutting plan, the amortisation of the bulk of goodwill
from the acquisition of Astron, the sale of the Princesa Sofía
hotel, which generated sizeable capital gains, the
considerable effort to reduce the cost of debt in Mexico, plus
the record level of committed sales in Sotogrande.
On the negative side, RevPAR remained stubbornly low in
Germany (with the consequent negative contribution to
EBITDA), there was a sharp increase in the supply of hotel
accommodation in Spain, and the restructuring and
rebranding process proved to be costly.
Thanks to our shareholders, our more than 12,000 employees
and our business partners, we are now more unified, leaner
and better-prepared for the future. We have always known
that the most complicated aspect of mergers and acquisitions
is not the operation itself but the subsequent integration
process. Accordingly, now that we have achieved our growth
target outside Spain and attained a healthy size, we have
dedicated, and will continue to dedicate, a large part of our
efforts to consolidating our company, now a veritable
multinational.
I would also like to add my special thanks to all of you for your
support last summer following the failed takeover bid
launched against the company.
In the last twelve months, we have worked very hard in the
face of difficult market situations in the countries where we
operate, particularly in Germany, where we have reorganised
and reinforced the management and sales teams, and
practically completed the integration of the Astron hotel
chain, which we acquired in May 2002.
In addition to implementing a major plan to cut operating costs
in 2003, we have reorganised our hotel portfolio to obtain a
more homogenous product which meets NH Hoteles' high
standards. Specifically, we have sold a total of fourteen hotels
and two restaurants, generating proceeds of more than 200
million euros.
Under our strategic plan, no major acquisitions were made in
2003 in order to concentrate on digesting previous years'
acquisitions.
The Sotogrande real estate business received a healthy
boost, with a record number of committed sales, worth more
than 70 million euros, yet to be booked.
LETTER FROM THE PRESIDENT
