SOL MELIA ANNUAL REPORT 00 COMP

ANNUAL REPORT 2000
www.solmelia.com

CONTENTS
COMPANY PROFILE 2-7
LETTER FROM THE CHAIRMAN 8-11
COMPANY HISTORY 12-17
ORGANISATIONAL STRUCTURE 18-19
MILESTONES 2000 20-45
FINANCIAL RESULTS 22-26
HOTEL GROWTH 27-33
RESEARCH & DEVELOPMENT 34-36
HUMAN RESOURCES:
EVERYTHING IS POSSIBLE CAMPAIGN 37-38
QUALITY & ENVIRONMENT 39-42
COMPANY AND SOCIETY 43-45
SOL MELIÁ IN THE 21ST. CENTURY 46-54
BRAND STRUCTURE CHANGE 48-49
NEW PROJECTS 50-51
COMPLETING THE E-TRANSFORMATION 53-54
GOOD GOVERNANCE CODE 55-67
OFFICIAL COMMUNIQUÉS 68-70
FINANCIAL REPORT 72-160
CORPORATE INFORMATION 161

ANNUAL REPORT 2000

COMPANY PROFILE
ASIA: (10)
Indonesia (7), Malaysia (1), Thailand (1)
and Vietnam (1).
MEDITERRANEAN: (26+3)
Egypt (1+2), Morocco (7),
Tunisia (18+1).
+ (Includes projects signed by Sol Meliá)
EUROPE: (241+34)
Andorra (1), Belgium (1), Croatia (27),
France (8), Germany (12), Italy (1 + 4),
Malta (+1), Portugal (13+1), Spain (172 + 28),
Turkey (5) and United Kingdom (1).
MIDDLE EAST: (1)
Lebanon (1).
LATIN AMERICA & CARIBBEAN: (58+33)
Argentina (1), Brazil (15 + 25), Colombia (7),
Costa Rica (4), Cuba (20 + 5),
Dominican Republic (5), Guatemala (1),
Mexico (10 + 1), Panama (1), Peru (1+1),
Puerto Rico (+1), Uruguay (1)
and Venezuela (2).
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COMPANY PROFILE
CURRENT SOL MELIÁ POSITIONING
DIVERSIFICATION: A COMPANY SUCCESS STORY
• The largest resort hotel company in the world.
• Leader in the Spanish market in both
business and leisure hotels.
• Leading hotel company in Latin America
and the Caribbean.
• Second largest hotel company in Europe.
• Seventh largest hotel company in the world
by market capitalisation.
• Tenth largest hotel company in the world by
number of rooms.
• Hotels in 30 countries.
- More than 33,000 employees.
DIVERSIFICATION OF CITY & RESORT HOTELS
(NUMBER OF HOTELS)
49% 51%
City Hotels
Resorts Hotels
GROWTH IN NUMBER OF HOTELS, ROOMS
AND BEDNIGHTS
DIVERSIFICATION BY MANAGEMENT TYPE
(Percentage of rooms)
400
350
300
250
200
52.359
47.938
205
227
65.597 68.766 81.942
246
262
335
80.000
70.000
60.000
50.000
40.000
Franchise
12%
44%
31%
13%
Owned
150
100
50
C.A.G.R. 14,3%
30.000
20.000
10.000
Management Leased
DIVERSIFICATION BY HOTEL CATEGORY
0
1996 1997 1998 1999 2.000
0
(Percentage of rooms)
Nº of Hotels Nº of Rooms
C.A.G.R. for Nº of Rooms
37% 24%
BEDNIGHTS
39%
YEARS
BEDNIGHTS
1998 19 Million
1999 21 Million
2000 23 Million
3 Stars
4 Stars
5 Stars & Deluxe
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COMPANY PROFILE
DIVERSIFICATION OF NUMBER OF ROOMS
BY GEOGRAPHY
8% 4%
(3+1%)
22%
(7+15%)
22%
(5+17%)
44%
(19+25%)
DIVERSIFICATION BY GUEST
NATIONALITY
3% 1%
5% 7%
7%
8%
10%
12%
31%
16%
Spain
Africa-Mediterran.
Rest of Europe Asia
Latin America & Caribbean
In brackets, City%+Resort%
Spain
United Kingdom
Germany
USA & Canada
Latin America
France
Italy
Benelux
Asia
Others
BRANDS - CATEGORY - SECTOR
BRAND CITY RESORT
5 STAR ALL INCLUSIVE
5 STAR · SUPERIOR 4 STAR 5 STAR · SUPERIOR 4 STAR
4 STAR · SUPERIOR 3 STAR
4 STAR · SUPERIOR 3 STAR
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COMPANY PROFILE
FINANCIAL PROFILE
• Company foundation: 1956
• Date of IPO: 2nd. July, 1996
• IPO share price (before split): 900 pesetas (5.41 euros)
• Ticker Symbol: Sol
• Markets: Continuous Market (Spain)
• Forms part of IBEX 35 and EuroSTOXX
• Shares issued: 184,776,777
• Share price at 31/12/00: 11.01 Euros
• Rating BBB Stable from Standard & Poor’s
• Increase in value from IPO to 31/12/00: 103.5%
BASIC RATIOS
PER 17.4
EV / EBITDA 11.25
NET DEBT /
SHAREHOLDER EQUITY 77.6%
FIXED CHARGE COVERAGE 5.1 X
MARKET CAPITALISATION € 2,034,392.32
IBEX WEIGHTING 0.6
SOL MELIA’S SHARES
15
14
13
12
11
10
9
8
7
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
6
0
30/12/99 15/2/00 29/3/00 16/5/00 28/6/00 10/8/00 22/9/00 8/11/00 27/12/00
Stock Market Quotation € SOL MELIÁ
Stock Market Quotation € IBEX
Volume of shares
1999
Price % Increase IBEX-35 Max. Min Average Daily Volume Dividend EPS CFPS
(31/12/99) Shares Euros (M) € € €
11.25 +13.41% +18.35% 13.53 8.42 388,000 4.6 0.120 0.55 0.92
2000
Price % Increase IBEX-35 Max. Min Average Daily Volume Dividend EPS CFPS
(31/12/00) Shares Euros (M) € € €
11.01 -2.13% -21.75% 14.28 8.8 416,000 4.9 0.144 0.63 1.14
(+20%) (+24%)
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COMPANY PROFILE
ANALYSIS OF ACTIVITIES
Data in thousand pesetas
31-DEC-99 INCREASE 31-DEC-00
HOTEL REVENUES 94,845 (€570 Mill.) 36.8% 129,735 (€780 Mill.)
European Resort 42,859 (€258 Mill.) 14.5% 49,087 (€295 Mill.)
European City 30,382 (€183 Mill.) 61.6% 49,102 (€295 Mill.)
Americas Division 21,604 (€130 Mill.) 46.0% 31,546 (€190 Mill.)
MANAGEMENT FEES 5,734 (€34 Mill.) 17.4% 6,729 (€40 Mill.)
CASINOS 2,056 (€12 Mill.) 0.4% 2,064 (€12 Mill.)
TIMESHARE 1,931 (€12 Mill.) 25.6% 2,426 (€15 Mill.)
OTHERS 5,018 (€30 Mill.) 48.4% 7,446 (€45 Mill.)
TOTAL REVENUES 109,584 (€659 Mill.) 35.4% 148,399 (€892 Mill.)
ECONOMIC PROGRESS
Data in thousand euros
1996 1997 1998 1999 2000 C.A.G.R.
REVENUE 51 80 95 659 892 105%
- 57% 19% 596% 35%
EBITDA 27 43 52 199 261 76%
- 59% 21% 283% 31%
NET PROFIT 21 34 42 88 113 52%
- 62% 24% 110% 28%
1000
800
600
400
200
0
C.A.G.R. 105%
892
659
51
80 95
1996 1997 1998 1999 2000
300
250
200
150
100
50
0
C.A.G.R. 76%
261
199
43 50
27
1996 1997 1998 1999 2000
120
100
80
60
40
50
0
34
21
C.A.G.R. 52%
42
113
88
1996 1997 1998 1999 2000
Revenues
EBITDA
Net Profit
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LETTER FROM THE CHAIRMAN
dDear shareholders,
The year 2000 has been, without a shadow of a doubt, a key year for
Sol Meliá. The acquisition and integration of Tryp Hotels and the consequences
of the deal represent great milestones in company development and
a major step towards our consolidation as a major player on the world stage.
More than 330 hotels with more than 82,000 rooms in 30 countries makes
us not only the biggest resort hotel company in the world, but also undisputed
leaders in Spain and in Latin America and the Caribbean, as well as
the second largest hotel chain in Europe. And after almost half a century,
all of this has made the year 2000 a year in which Sol Meliá has entered
the prestigious “Top Ten” hotel companies in the world. A team of more
than 33,000 people and a portfolio of 80 new hotel projects already signed
for development will take Sol Meliá to 410 hotels with 102,000 rooms in
less than 2 more years.
As one would expect, the company that now emerges from this deal is much
more structurally sound, blessed with greater operational capacity and with
great expectations for improvements in results. The acquisition has also reaffirmed
our philosophy of diversification of our hotel portfolio and our ability
to provide solutions to the needs of all different types of business and leisure
travellers. Our consolidation in the city hotel arena and our clear leadership
of the Spanish market have also made it more difficult for foreign companies
to gain a significant foothold in our domestic market, while also improving
our position in terms of variable and structural costs.
This significant deal has not only served to increase the number of hotels
in our portfolio, but it has also provided, as expected, an increase in company
profitability. Our earnings before interest, taxes, depreciation and
amortisation (EBITDA) have reached 43,377 million pesetas – 260.7
million euros-, an increase of 31% over the previous year and, once again,
far in excess of the 20% annual growth we have always set as our objective.
The new and strategic incorporations, the benefits generated by the extensive
refurbishment programme in a large number of hotels and the repositioning
of company hotels and brands after such an important deal have
had an exceptional result: the achievement of record financial results for the
year 2000. Consolidated turnover increased by 35%, while consolidated
revenues grew to 149,399 million pesetas – 891.9 million euros -, and net
profits rose to 19,750 million pesetas – 118.7 million euros.
These results, the financial solvency of the company and the excellent perspectives
for the future have given us the second best credit rating in the
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LETTER FROM THE CHAIRMAN
hotel industry, a BBB (stable) from Standard & Poor’s. The achievement of
the rating was also a starting point for the launch of a Eurobond issue
aimed at diversifying our sources of finance and which ended its first phase
in 2000 with spectacular results.
And if the purchase of Tryp was the most important deal of the year, our
firm commitment to the use of new technology (the so-called e-transformation
of the company) is another of the key elements of the evolution of
the business in 2000. In general terms, the e-transformation involves the
modernisation and automation of a wide range of internal processes and
external transactions, affecting all departments in the company and the
three areas termed the Inside, Sell Side and Buy side.
Activities on the Inside include the integration of the SAP (System
Application Program) platform, an immense database designed to facilitate
and improve processes using the benefits of the internet and assisting in
placing the customer at the very heart of our organisation. Sales force automation,
a new Property Management System at the hotel Front Desk (RA
2000), new instruments for financial control (FICO), human resources (PA
& PD) or procurement (MM) will provide significant savings in time and
money. Thanks to a global communications network, this revolutionary
system will also provide extensive detailed information on all of the activities
carried out in hotels and corporate departments and on each of the
guests that stay in any of the company’s hotels.
The Sell Side includes the businesses fronted by the websites of AOL Avant
and Meliá Viajes and the solmelia.com site. Sol Meliá was a co-founder of
the family leisure portal, Prodigios, the embryo for what has now become
AOL Spain, the launch pad for America On Line in Spain, based in Palma
de Majorca, and for which Meliá Viajes is the exclusive supplier of travel
reservation services. Besides this major new venture, we are also working
hard on a new generation website and the growth of our multi-channel travel
agency Meliá Viajes.
Finally, Buy Side ventures include our participation in the HotelnetB2B
market place for the hotel industry. This initiative, founded by Sol Meliá,
Telefónica and BBVA, has now attracted 19 partners from amongst the leading
hotel companies in Spain and aims to provide the finest possible service
to hotel managers and suppliers through the optimisation of purchasing
processes using Internet technology.
Within the framework of the modernisation policy, the company has also
modified its Statutes so as to better adapt its management to the growing
demands of the market as well as facilitating the decision-making process.
The Shareholders’ Meeting held on the 23rd. October approved the initiative
with a quorum of 99.48 % of the representation of 82.41%.
Sol Meliá has also completed the final stages of its three-year Hotel
Refurbishment Programme, an ambitious project involving the modernisation
of a large part of the company’s hotels so as to adapt them to the needs
and standards of their respective hotel brands and equip them with the latest
modern technologies while maintaining the style and appeal of their different
local architectural styles and their respect for the natural environment.
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LETTER FROM THE CHAIRMAN
And it is precisely this policy of expansion and adaptation to new technologies
and the increasing demands of a highly competitive market that
forms the basis of our future strategy, aiming to consolidate the more than
80 hotel projects that we have already signed and successfully completing
the e-transformation of the company. As well as these future additions to
the portfolio, over the year 2000 we have added a total of 81 hotels in 11
countries with over 14,000 rooms, creating more than 3,000 jobs.
Our ambitious development programme, which will see more than 20,000
new rooms added, equivalent to the total size of some of our most direct
competitors in Spain, will be the cornerstone of the Sol Meliá of the future,
a grand company with a presence in the business and leisure destinations
most popular amongst our European and American clients.
Furthermore, and in line with the trends in the international hotel industry,
the company has reorganised its brand portfolio, reducing it to 4 key
brands, so as to simplify and better segment our hotel products. Tryp
Hotels will include all of our 3 and 4 star city hotels, while Sol Resorts will
include all of our resort properties in the same categories. Meliá Hotels &
Resorts will continue to be associated with superior 4 star and 5 star properties
in both major cities and first class leisure destinations. Paradisus
Resorts, meanwhile, will remain as deluxe “all inclusive” properties in privileged
exotic locations.
Slowly but surely, and not without the occasional difficulty, Sol Meliá is
managing to firmly establish its quality standards and its position as a company
of reference in the hotel business. How is it done Quite simple really:
through the implementation of challenging service, quality, technology and
environmental policies, the launch of an innovative “Everything is Possible”
campaign, the implementation of a Guest Satisfaction Assurance programme,
the constant refurbishment and enlargement of our hotel portfolio, our link
with social organisations and events and, above all, our insistence on placing
the customer at the very heart of our organisation and our belief in our
lemma “your satisfaction, our commitment”.
Guests, shareholders, suppliers, employees and hotel owners are the creators
of the success of a company that is now almost fifty years old. Their
confidence, their efforts and their co-operation will make tomorrow’s
Sol Meliá a truly great company on which the sun never sets and in
which, more than ever, Everything is Possible.
Gabriel Escarrer Juliá
Chairman
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COMPANY HISTORY
A dream is born ...
a
1956.- At only 21 years of age, an entrepreneurial Gabriel Escarrer
began to rent and operate his first hotel, the Altair in the residential area
of Son Armadans (Palma de Majorca). 60 rooms that would later become
Sol Meliá.
60’s.- The tourism boom of the 1960’s were fundamental to the consolidation
of the structure of a growing business. Through reinvestment
of profits, increased co-operation with Tour Operators and bank loans,
the company began to take shape. The tenacity of Gabriel Escarrer and
his team, led by Juan Vives, his charisma and innate flair for sales and
marketing would do the rest.
70’s.- This was a time for growth in the Balearic Islands, the most popular
destinations on the Spanish mainland and the Canary Islands with the
acquisition of the company’s first resort hotels. The entrepreneurial vision
and spirit of its founder and, once again, a risky but firm commitment for
making his name in the hotel business were key in this growth.
Sol Cala Blanca
Over a 20 year period, coinciding with the growth of Spain as a tourism
destination, Escarrer built up a small hotel chain with a strong presence
in the Balearic Islands operating as Hoteles Mallorquines until 1976,
and also laid the foundations for what is still company philosophy: reinvestment
of profits in new hotels, growth through the purchase of other
hotel chains and constant renovation of hotel facilities.
The embryo of a great company
At the end of the 70’s, Sol Meliá began to consolidate its expansion in
Spain with a presence in most popular tourism destinations on the
mainland and in the Canary Islands, changing its name along the way to
Hoteles Sol.
1984.- Time for real growth. In a joint deal with Aresbank (financial
representative of the KIO group in Spain), the 32 hotels of the HOTASA
chain in Spain were acquired. The purchase meant the beginning of a presence
in the city hotel market and the company moved up to number 37 in
the world ranking of hotel chains. At the same time, the company also
became the largest hotel chain in Spain, a position it has held ever since.
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COMPANY HISTORY
Meliá De Mar
Meliá De Mar
1985.- The company began its international expansion with its first
hotel outside Spain: the Bali Sol. The business instincts of Gabriel
Escarrer once again led to commercial success as the company became
the first international chain to build a hotel in the then-unknown destination
of Bali. It seemed like a very risky bet. Nowadays all of the
major world hotel companies are there, but only one can proudly claim
to be a pioneer.
1986.- Continuing with a policy of growth through acquisition,
Hoteles Sol took over Compañía Hotelera del Mediterráneo, including
11 hotels partly owned by the airline British Caledonian.
...and then there was Meliá
1987.- 27th. June, 1987 was the date for another milestone in company
history. Owned by the Luxembourg-based company Interport,with
Giancarlo Parretti at its head, the 22 Meliá hotels were the object of
desire of major international hotel groups including Sheraton, Wagon-
Lits or Hilton. Arduous negotiations finally led to Gabriel Escarrer
becoming the new Chairman of Hoteles Meliá.
Growth continued in mainland Europe, the Americas, the Caribbean,
South-east Asia and the Mediterranean. Globalisation and diversification
became the watchwords of the times.
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COMPANY HISTORY
New management
1993.- The incorporation of Sebastián Escarrer brought new ways to
the company as he began a revolution in Sol Meliá business strategy and
implemented the organisational structure that is in place today.
Meliá Bali
To favour continued growth, the management team was reinforced and
changes were made in management procedures and systems (information
technology, accounts, quality control, bonus systems, financial
management, added values for the 5 types of clients, etc...). Faithful to
its origins, the company also adopted a management style aimed at
encouraging an entrepreneurial and team spirit, with fluid lines of communication
and a greater focus on the market and the customer.
That same year the company was named as the recipient of the Príncipe
(Prince) Felipe Award for excellence in tourism for its management,
growth and contribution to the industry.
Meliá Castilla
Going public
1996.- Once the new organisation and management systems were
consolidated, on 2nd. June, 1996, Sol Meliá became the first hotel
management company in Europe to be floated on the stock exchange.
Prior to the flotation the company had been split into two new entities:
Inmotel. SA., the owner of hotels and the new Sol Meliá S.A., a hotel
management company and target of the flotation.
On 30th. December 1996, the value of the company’s shares had increased
by 72.2% and had been incorporated into the IBEX 35 index along
with all other major Spanish public companies.
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COMPANY HISTORY
Just six months later, the US agency Standard & Poor’s granted a credit rating
of BBB+, rating Sol Meliá as the most solvent hotel company in Europe and
allowing much greater capacity to obtain financing on capital markets.
Time for integration: the new Sol Meliá
1998-1999.- A strategic decision is made to reintegrate the hotel management
and property businesses, to further strengthen company growth and
initiate the company’s technological transformation. The integration ended
in 1999 with the take-over of Meliá Inversiones Americanas (MIA) and the
merger with Inmotel Inversiones. The new Sol Meliá became the 12th. largest
hotel group in the world with more than 260 hotels in 27 countries and a
market capitalisation of 382,646 million pesetas (2.300 million euros).
After the creation of the new Sol Meliá, another of the Chairman’s sons,
Gabriel Escarrer Jaume, joined the company as Chief Executive Officer.
He had held the same position with Inmotel Inversiones, a period during
which he brought about an important modernisation and adaptation of the
company to prepare for merger with Sol Meliá, while also initiating an
ambitious and highly successful plan for renovation of the hotel portfolio.
1999.- In 1999, the company added 27 hotels and purchased 34, further
reinforcing and developing its presence in its three key natural markets:
Latin America, the Mediterranean and major European cities. The
investment made in purchases reached 100,623 million pesetas (605
million euros).
Thanks to these investments, the company established a presence in
Europe’s foremost capital cities and business and leisure tourism destinations:
Rome, Paris and London.
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COMPANY HISTORY
Adapting to a new age:
E-Transformation
The natural evolution of the market led to Sol Meliá creating a new
E-Business Division, headed by Luis del Olmo, Executive Vice
President of Sales & Marketing. The Division is charged with adapting
all of the company’s purchasing and sales activities, as well as its internal
management, to the new technological environment, creating a true
“solmelia.com” on the Inside, the Sell Side and the Buy Side.
Tryp Hotels, the latest major deal
On 21st August, 2000, Sol Meliá sealed its purchase of Tryp Hoteles.
With the incorporation of the 60 hotels of the company led by Antonio
Briones, Sol Meliá has consolidated its leadership position in both the
business and leisure hotel markets in Spain, Latin America and the
Caribbean, and its ranking as number 2 in Europe. At the same time, Sol
Meliá has achieved a place in the Top Ten hotel companies in the world
by number of rooms and has become the undisputed leader of the
Spanish city hotel market.
Sol Meliá currently operates more than 330 hotels in 30 countries on
4 continents with a team of over 33,000 employees.
Meliá Colón
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ORGANISATIONAL STRUCTURE
CHAIRMAN
Gabriel Escarrer Juliá
gabriel.escarrer@solmelia.com
VICE CHAIRMAN
Sebastián Escarrer Jaume
sebastian.escarrer@solmelia.com
CHIEF EXECUTIVE OFFICER
Gabriel Escarrer Jaume
gabriel.escarrer.jr@solmelia.com
ADMINISTRATION
Mark Hoddinot
mark.hoddinot@solmelia.com
FINANCE
Onofre Servera
onofre.servera@solmelia.com
HOTEL DEVELOPMENT
Ángel Palomino
angel.palomino@solmelia.com
HUMAN RESOURCES
Pending announcement
INFORMATION SYSTEMS
Hervé Imbert
herve.imbert@solmelia.com
LEGAL
Juan Rotger
juan.rotger@solmelia.com
MARKETING, SALES & E-BUSINESS
Luis del Olmo
luis.del.olmo@solmelia.com
QUALITY & TECHNOLOGY
Agustín Serrano
agustin.serrano@solmelia.com
WORKS & MAINTENANCE
Antonio de La Calle
antonio.delacalle@solmelia.com
HOTEL
CLIENT
AMERICAS
Evagrio Sánchez
evagrio.sanchez@solmelia.com
ASIA
Miguel Payeras
miguel.payeras@solmelia.com
CUBA
Gabriel Cánaves
gabriel.canaves@solmelia.com
EUROPEAN CITY
Andrés Encinas
andres.encinas@solmelia.com
EUROPEAN RESORT
Marcello Pigozzo
marcello.pigozzo@solmelia.com
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MILESTONES 2000
s
New entry in
the Top Ten
Sol Meliá ended the 20th. century with a truly remarkable achievement. At
the end of the year 2000, the company had achieved record profits thanks
to the positive performance of its European City and Resort Divisions and
recovery in the Asian and Latin American markets. Above all other factors,
however, the achievement of such extraordinary results was in large part due
to what, without a shadow of a doubt, was the most important deal of the
year: the integration of the 75 hotels of the Tryp Hotels chain, with 60
hotels already in operations and 15 under development.
Above and beyond the contribution to the leadership of Sol Meliá in
Spain, Latin America and the Caribbean and our second position in the
European ranking, the deal also meant that Sol Meliá entered the “top
ten” ranking of world-wide hotel companies. This was a spectacular
achievement and represents another positive step towards the achievement
of the company’s growth and diversification objectives. During the
year 2000 another 81 hotels in 11 countries were added to the Sol Meliá
portfolio and agreements were signed to add another 70 new projects in
the next two years.
The “E-transformation” of Sol Meliá, its firm commitment to the use of
new technologies to allow the company to advance and adapt to the new
needs and preferences of the market, was another key feature of the year.
The application of a wide range of new technologies will facilitate processes
and reduce costs to the benefit of both hotel operations and guest services.
The 33,000 Sol Meliá employees that make up this immense global
team will thus be available, more than ever, to ensure that in Sol Meliá,
Everything is possible.
Finally, and in parallel with the company “e-volution”, Sol Meliá has continued
to make great advances with its Quality Assurance and
Environmental Protection programmes, efforts that have been rewarded
for yet another year by a large number of awards and certifications to a
growing number of hotels world-wide. Sol Meliá has also kept up its
support of social, cultural and sporting events through different types of
sponsorship aiming to provide a service to society and contribute to
improvements in the quality of life.
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MILESTONES 2000· FINANCIAL RESULTS
Excellent results for the year 2000
w2000 was another record year for Sol Meliá.At
the end of the year the company had far exceeded
its objectives for the year and had obtained
RevPar growth of 19%, a figure way above
the average for the rest of the Spanish and
international hotel industry. These results are
reflected in the INCOME STATEMENT:
ITEM 2000 INCR.
Figures
Consolidated Sales: 148,399 mill. ptas. + 35%
(891.9 mill. euros)
EBITDA: 43,377 mill. ptas. + 31%
(260.7 mill. euros)
Net Profits: 19,750 mill. ptas. + 26%
(118.7 mill. euros)
Profits to Mother Company: 18,761 mill. ptas. + 28%
(112.6 mill. euros)
As expected in our projections, the Americas
Division saw a recovery over the year. The profitability
of hotels added in more recent times
such as the Meliá Mexico Reforma and the
recovery of the Latin American market, led to
RevPars up to 30% above the previous year.
Finally, management fee revenues also grew by
18%, thanks to the contribution of the Cuba
Division (+ 10%) and, above all, Asia Pacific (+
25%) and the Americas (+ 23%).
Performance may be summarised as follows:
Income statement
Data in thousand Pesetas.
INCOME STATEMENT Dec-00 Dec-99 Dec-98
The performance of the different Divisions is
as follows:
With a RevPar increase of 15%, the European
City Division, which includes the major part
of the hotels added after the purchase of Tryp
Hotels, became the best performer for the year.
The excellent conditions for business travel in
Europe and especially in Spain were decisive
factors behind the spectacular performance of
the Division. At the same time, the positive
evolution of the summer 2000 season, once
again, especially in Spain, also took the
European Resort Division to a RevPar increase
of 11%.
TOTAL REVENUES 148,399,154 109,584,292 15,749,996
OPERATING EXPENSES (105,018,980) (76,485,646) (7,488,615)
EBITDA 43,380,174 33,098,646 8,261,381
DEPRECIATION / AMORTISATION (13,984,526) (10,379,849) (804,121)
EBIT 29,395,648 22,718,797 7,457,260
PROFIT FROM EQUITY INVEST. 158,539 161,248 579,889
FINANCIAL EXPENSES (16,387,435) (10,367,021) (350,165)
FINANCIAL REVENUES 7,878,646 6,186,070 457,081
FINANCIAL RESULTS (8,508,789) (4,180,951) 106,916
CONSOLIDATION GOODWILL AMORT. (443,670) (304,151) (231,119)
PROFIT / (LOSS ) FROM ORD. ACTIV. 20,601,728 18,394,943 7,912,946
EXTRAORDINARY PROFIT/ (LOSS) 3,458,069 884,574 (174,482)
PROFIT BEFORE TAXES & MINOR. 24,059,797 19,279,517 7,738,464
TAX EXPENSE (4,321,366) (3,611,561) (752,314)
MINORITIES (992,641) (1,024,201) (70,375)
NET PROFIT/(LOSS) AFTER MINOR. 18,745,790 14,643,755 6,915,775
FUNDS FROM OPERATIONS 33,729,836 26,528,584 7,615,983
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MILESTONES 2000· FINANCIAL RESULTS
As regards the Balance Sheet, the most important
changes that have been seen are due to the
purchase of Tryp Hotels, thanks to which Sol
Meliá assets have grown to almost half a
billion pesetas.
Net debt has increased by 57% due to the large
number of investments that have been made,
particularly, as we have already mentioned, the
purchase of Tryp. The ratio of net debt to own
funds has increased from 67% to 77.6%, a fact
which has meant that the average weighted
cost of debt has risen from 5.1% to 5.7%.
Finally, the ratio of interest coverage was at 5.1
times EBITDA at the end of the year, while all
short term liquidity ratios have improved with
respect to the previous year.
This excellent situation, together with well
structured financial planning for the coming
years have led Standard & Poor’s to classify the
health of the company balance sheet with a
BBB (stable) rating.
“From a financial
point of view, the
year 2000 has been
another record year
for Sol Meliá. The
purchase of Tryp
Hotels has made an
enormous contribution
to our firm
policy of providing
greater value for
shareholders,
allowing us to
increase the size
and profitability of
the company and
increasing earnings
per share”.
Onofre Servera,
Executive Vice President
Finance”
During the year Sol Meliá sold the Meliá Bávaro
(Dominican Republic), Sol Inn Bardinos (Gran
Canaria), Sol Las Olas (Fuerteventura), Sol Punta
Elena Apartamentos (Fuerteventura) and the
Guadalajara Industrial Laundry. These sales occurred
as part of an asset sales plan for the year 2000
that has generated additional revenues of 15,000
million pesetas –90 million euros- and capital
gains of 4,250 million pesetas (€ 25.54 million).
The main objective of the plan has been to benefit
from good divestment opportunities for nonstrategic
assets or in areas where the company
has already consolidated its presence, freeing up
resources for increasing the category of the company
portfolio in new destinations.
During the year there was also a gross dividend
payment of 20,057 pesetas to shareholders related
to 1999 results, and there was also an attendance
premium at the latest General
Shareholders’ Meeting of € 0.02 (3,33 pesetas)
gross per share.
Balance sheet 2000
Cash Flow
Another of the key features of Sol Meliá
financial policy for the year 2000 is 131,947
million pesetas (€ 792 million) made in
investments, of which 60,000 million pesetas
(€ 360 million) was used for the acquisition
of Tryp. The financing of that deal was achieved
through a capital increase of 33,000
million pesetas (€ 198 million) and debt of
27,000 million pesetas (€ 162 million). The
total increase in debt for the year 2000 rose to
68,000 million pesetas (€ 409 million).
Amongst other ends, other investments made
during the year 2000 included the hotel projects
Meliá Avenue Louise Boutique Hotel
(Brussels), Meliá Milano (Italy) and Paradisus
Puerto Rico (Puerto Rico), as web as the E-
transformation process and the renovation and
refurbishment of the company hotel portfolio.
Data in thousand Ptas.
CASH FLOW 2000
FUNDS FROM OPERATIONS 33,729,836
(INCREASE) / DECREASE OF WORKING CAPITAL (11,802,286)
CAPITAL EXPENDITURE (131,309,219)
PROCEEDS FROM ASSET SALES 14,170,521
CAPITAL INCREASE 32,999,602
INTEREST BEARING FINANCING 68,065,186
DIVIDENDS PAID AND ATTENDANCE PRIME (3,902,625)
INCREASE / (DECREASE) OF CASH 1,951,016
BEGINNING CASH 10,425,394
ENDING CASH 12,376,410
INCREASE IN DEBT NET 66,114,170
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MILESTONES 2000· FINANCIAL RESULTS
Balance Sheet 2000
Data in thousand Ptas.
ASSETS Dec-00 Dec-99 Dec-98 LIABILITIES Dec-00 Dec-99 Dec-98
CASH 12,376,399 10,425,394 4,008,228 TRADE ACCOUNTS PAYABLE 19,473,781 11,797,816 867,735
SHORT TERM INVESTMENTS 7,281,309 12,999,339 127,677 SHORT TERM LOANS 24,903,879 25,660,065 2,423,780
SHORT TERM DEBTORS 31,173,393 17,000,251 5,792,587 OTHER SHORT TERM LIABIL. 10,796,005 8,519,657 2,124,210
INVENTORY 5,992,508 4,232,986 21,262 CURRENT LIABILITIES 55,173,665 45,977,538 5,415,725
OTHER CURRENT ASSETS 3,124,854 1,730,880 879,908
CURRENT ASSETS 59,948,463 46,388,850 10,829,662 LONG TERM LOANS 169,731,234 100,909,862 45,261
OTHER LONG TERM LIABIL. 30,373,651 27,466,078 1,003,620
GROSS FIXED ASSETS 362,508,419 296,114,440 2,328,041 TOTAL LIABILITIES 255,278,550 174,353,478 6,464,606
ACCUMULATED DEPRECIATION -87,373,658 (68,541,373) (631,087)
NET FIXED ASSETS 275,134,761 227,573,067 1,696,954 MINORITY INTERES 9,799,570 7,250,035 123,935
LONG TERM DEBTORS 7,438,278 7,248,697 1,768,320 TOTAL COMMON EQUITY 224,949,555 166,217,239 48,004,568
OTHER FIXED ASSETS 147,506,173 66,610,138 40,298,173 SHAREHOLDER EQUITY 234,749,125 173,467,274 48,128,503
TOTAL ASSETS 490,027,675 347,820,752 54,593,109
TOTAL LIABILITIES
& EQUITY
490,027,675 347,820,752 54,593,109
Investments
Ratios
Data in Million pesetas
MOST IMPORTANT INVESTMENTS
TRYP HOTELS 60,000
FÉNIX AND COLÓN HOTELS (SPAIN) 12,501
MELIÁ AVENUE LOUISE (BRUSSELS) 1,538
HOTEL AZAFATA (VALENCIA) 842
PUERTO RICO RESORT DEVELOPMENT 6,440
MELIÁ MILAN CONSTRUCTION 5,315
GOLF COURSE AND OTHER FACILITIES
(DOMINICAN REPUBLIC) 3,247
PARTICIPATION IN AOL-AVANT 3,506
E-TRANSFORMATION (SAP) 2,808
HOTELNETB2B.COM 519
MELIAVIAJES.COM 264
REFURBISHMENT HOTELS IN SPAIN 18,335
REFURBISHMENT HOTELS
IN LATIN AMERICA 1,931
FIRST STAGE REFURBISHMENT
MELIÁ WHITE HOUSE (LONDON) 1,587
REFURBISHMENT HOTELS IN PARIS 1,225
OTHERS 11,252
Data in thousand Ptas.
FIXED CHARGE COVERAGE Dec-00 Dec-99 Dec-98
F.F.O. / NET DEBT 18.5% 22.8% -494.8%
EBITDA / NET INTEREST 5.1 x 7.9x -77.3 x
NET DEBT / EBITDA 4,2x 3,5x -0.2 x
LIQUIDITY Dec-00 Dec-99 Dec-98
CURRENT ASSETS / CURRENT LIABILITIES 109% 101% 200%
F.F.O. / CURRENT LIABILITIES 61% 58% 141%
F.F.O. / TOTAL DEBT 17% 21% 308%
LEVERAGE Dec-00 Dec-99 Dec-98
NET DEBT 182,258,713 116,144,533 -1,539,187
WEIGHTED AVERAGE COST OF DEBT 5.7% 5.1% 4.9%
NET DEBT / TOTAL ASSETS 37.2% 33.4% -2.8%
NET DEBT / SHAREHOLDER EQUITY 77.6% 67.0% -3.2%
NET DEBT / MARKET CAP (*) 53.84% 36.17% -1.00%
(*)
Price at closing (31/12/00): 1,832 ptas. (Eur 11.01)
TOTAL 131,309
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MILESTONES 2000· FINANCIAL RESULTS
Standard & Poor’s BBB rating
In November 2000, Standard & Poor’s granted
a BBB (stable) rating to Sol Meliá, the second
highest credit rating in the world for a hotel
company and the only such rating for a
Spanish hotel group.
These circumstances assist in increasing the
capacity of Sol Meliá to obtain resources from
capital markets, a policy which the company is
promoting as it looks to diversify its sources of
finance.
Euronote issue programme
The application of this financial diversification
policy has been seen in the programme to issue
Medium Term Euro Notes for a total value of
249,900 million pesetas (€1,500 million). Within
the mentioned plan, an initial issue of 56,644
million pesetas (€340 million) has been made,
with a duration of 5 years and with the Deutsche
Bank as Global Co-ordinator.
The funds obtained from the issue have been
used for the acquisition of Tryp (26,990 million
pesetas (€162 million) and refinancing existing
debt (22,990 million pesetas (€138 million).
receive regular updates on financial performance,
Annual General Meetings and
Dividends, amongst other things, while they
may also use the direct line set up with the
company to request any additional information
they may require.
Club members receive a membership card
giving them the following benefits in Sol
Meliá hotels: preferential rates, free newspapers,
priority reservations, express check in and
late check out (until 16:00 hours), amongst
others. In addition, for every stay in a Sol
Meliá hotel, Club members also earn points
that they can later exchange for free stays in
company hotels world-wide.
Those members of the Club that remain as
shareholders for a certain amount of time will
also receive additional benefits such as greater
discounts for hotel stays, welcome gifts on
arrival at hotels and discounts in hotel restaurants.
Sol Meliá also intends to introduce a new section
on its website specially for shareholders
providing such tools as a share price calculator
and calendar of events, presentations, information
on dividends, analysts recommendations,
annual reports, video clips, quarterly
reports, etc.
Creation of Shareholders’ Club
The Sol Meliá Shareholders’ Club is an innovative
initiative which aims to improve the services
the company provides to some of its most
important clients: its minority shareholders.
The Club offers a wide range of benefits for
clients staying in any Sol Meliá hotel while
also providing regular detailed information on
company development.
A special telephone hotline specifically for
shareholders has been set up along with an e-
mail service at club.accionista@solmelia.com.
Members of this exclusive Club will thus
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MILESTONES 2000· HOTEL GROWTH
Year 2000 data
dDuring the year 2000 the company added a
total of 81 hotels with 14,264 rooms as
follows:
HOTELS BY TYPE
SEGMENT
CITY HOTELS
RESORT HOTELS
HOTELS BY DIVISION
DIVISION
AMERICAS
CUBA
EUROPEAN CITY
EUROPEAN RESORT
HOTELS / ROOMS
53 hotels (7,171 rooms)
28 hotels (7,093 rooms)
HOTELS / ROOMS
7 (1,430 rooms)
6 (2,593 rooms)
46 (5,741 rooms)
22 (4,500 rooms)
“The agreement
between Sol Meliá
and Tryp creates a
giant hotel company
with Spanish
majority capital
and also unites two
complementary
strategies to take on
new projects that
will allow us to
continue our ascent
in the world
ranking”
”
Sebastián Escarrer,
Vice Chairman
Entering the “Top Ten”:
The integration of Tryp Hotels
Sol Meliá growth policy in 2000 was somewhat
marked by an event of tremendous importance
for the future: the purchase of the Tryp
Hotels chain. The deal was sealed on the 21st.
August 2000 and brought with it the extension
of the company’s leadership position in the
Spanish city and resort hotel markets, the consolidation
of its second position in the
European ranking and a position as the leading
hotel company in such important leisure tourism
destinations as Cuba and Tunisia. Above
all, however, this giant leap forward brought
about the entry of Sol Meliá in the world top
ten, the ranking of the 10 largest hotel companies
in the world.
HOTELS BY COUNTRY
COUNTRY
HOTELS / ROOMS
BELGIUM
1 (80 rooms)
BRAZIL
5 (960 rooms)
CUBA
6 (2,593 rooms)
GERMANY
2 (251 rooms)
ITALY
1 (270 rooms)
MOROCCO
1 (147 rooms)
PANAMA
1 (287 rooms)
PERU
1 (183 rooms)
PORTUGAL
2 (260 rooms)
SPAIN
51 (6,783 rooms)
TUNISIA
10 (2,450 rooms)
Commercial and strategic reasons abound for
the purchase of Tryp: the size of the company,
relatively easy to digest but, at the same time,
Tryp Fénix (future Gran Meliá Fénix)
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MILESTONES 2000· HOTEL GROWTH
with a presence all over Spain, the absence of
any net debt so as not to compromise the future
growth of Sol Meliá, the possibility of generating
cost savings of around 1,100 million
pesetas - 7 million euros- through synergies in
operations, the barrier to entry created for
international hotel groups to get a significant
foothold in Spain and, above all, the impact on
financial results.
The deal in figures
With a very strong position in Spain with a
portfolio of 50 hotels, the Tryp chain also had
an international presence with 3 hotels in
Cuba, 1 in Andorra and 7 in Tunisia. Its solid
position in the city hotel market and, particularly,
its outstanding presence in Madrid make
the new company a reference point if the
Spanish city hotel market. 51% of Sol Meliá’s
hotel portfolio is now in city locations with
49% of hotels in resorts.
The purchase of Tryp Hotels means the addition
of 60 hotels and more than 9,700 rooms,
figures which take us to more than 330 hotels
in 30 countries on 4 continents. The company
portfolio also includes 81 signed new projects
(15 from Tryp) which will take the total number
of Sol Meliá hotels in 2003 to at least 410
with more than 102,000 rooms.
RANKINGS OF SPANISH COMPANIES*
COMPANY HOTELS ROOMS
SOL MELIA 203 42,281
RIU HOTELS 59 14,377
NH HOTELS 86 10,101
FIESTA HOTELS 34 8,369
IBEROSTAR 25 8,173
BARCELO HOTELS 28 7,743
H10 HOTELS 21 6,647
HOTELES GLOBALES 31 6,376
PRINCESS HOTELS 15 5,910
GRUPOTEL 38 5,470
Source: Hostelmarket.
(*) Including signed projects for Sol Meliá.
TOTAL COST
60,891 Million pesetas
PAYMENT STRUCTURE 27,000 Million pesetas in cash payment +
13,222,266 Sol Meliá shares (at 15€)
% OF SOL MELIÁ CAPITAL IN OWNED
BY TRYP SHAREHOLDERS
(Antonio Briones, Rufino Calero y Max Mazin) 7.2%
MEMBERS OF TRYP IN
SOL MELIÁ BOARD 1
Nº OF HOTELS INCORPORATED 60 + 15 signed projects
COMPLEMENTARY ADQUISITION Hotels Tryp Fenix (Madrid)
(Included in total nº of hotels)
and Tryp Colón (Sevilla)
PRICE OF COMPLEMENTARY
ADQUISITION
12,500 Million pesetas
RANKING INTERNATIONAL LEVEL*
RANKING COMPANY HOTELS ROOMS
1 CENDANT CORP. 6,315 542,630
2 BASS HOTELS & RESORTS 2,886 471,680
3 MARRIOTT INTERNATIONAL 1,888 355,900
4 ACCOR 3,234 354,652
5 CHOICE HOTELS INTERNATIONAL 4,248 338,254
6 BEST WESTERN INTERNATIONAL 4,037 313,247
7 HILTON HOTELS CORP, 1,700 290,000
8 STARWOOD HOTELS & RESORSTS 716 217,651
9 CARLSON HOSPITALITY 616 114,161
10 SOL MELIÁ + TRYP 420 103,274
11 HYATT 195 85,743
12 SOCIÉTÉ DU LOUVRE 990 65,970
13 HILTON INTERNATIONAL 217 61,889
14 FORTE HOTEL GROUP 449 58,636
15 FELCOR LODGING TRUST 188 50,000
Source: Hotels Magazine, july 2000.
(*) Including signed projects for Sol Meliá & Tryp.
EBITDA MULTIPLE ANALYSIS
Acquisition of lease / management company 2000 2001(*)
Purchase of tryp before synergies (1) 9.36x 6.87x
Purchase of tryp after synergies (2) - 5.89x
Purchase of Tryp after synergies and fiscal
deduction of Goodwill (3) 5.25x 3.30x
(1) At Friday 1st December closing price of € 9.11
(2) Sol Meliá estimates 6,87 million euro synergies.
(3) Goodwill’s fiscal deduction 124,2 million euro
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MILESTONES 2000· HOTEL GROWTH
Meliá Balneario Mondariz
Consolidating our position
in Spain
which (4,978 rooms) in city destinations and
10 (1,887 rooms) in resorts.
As we have seen, the integration of Tryp has
strengthened Sol Meliá’s leadership position in
its domestic market where, after the addition
of the projects currently under development,
the company will provide more than 200 city
and resort hotels.
Meliá María Pita
Amongst the most significant hotels that have
joined the portfolio in Spain, special mention
must be made of the Tryp Fénix (future Gran
Meliá Fénix) in Madrid, the Meliá Colón
(Seville) or the Meliá Balneario Mondariz
(Pontevedra).
Within this framework, Madrid has become one
of the destinations most favoured by the deal,
with the addition of the 20 Tryp hotels in city
making the new Sol Meliá the undisputed leader
in the hotel industry in the Spanish capital with
27 hotels with 5,069 rooms.
Throughout the year 2000, Sol Meliá added a
total of 50 hotels (6,865 rooms) in Spain, 40 of
The evolution of Sol Meliá in the Spanish
market is a result of a dual objective: to diversify
the hotel portfolio to respond to the needs
of different customer segments and to consolidate
the company’s position as the leading
hotel chain in Spain through a high profile
presence in the company’s major cities and
provincial capitals.
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MILESTONES 2000· HOTEL GROWTH
Meliá Avenue Louise Boutique Hotel
Growth in European Cities
For Sol Meliá 2000 was a year for the consolidation
of its European expansion programme
and its firm commitment to the city hotel
market, 50% of its total supply in Europe.
Over the course of the year a total of 46 hotels
were added with almost 6,000 rooms in
important cities in Belgium, Germany, Italy,
Portugal and Spain.
The company has opened its first hotel in the
Italian capital, the Meliá Roma Aurelia Antica
and has also added the Meliá Avenue Louise
Boutique Hotel (Brussels-Belgium), the Sol Inn
Wolfsburg and Sol Inn München in Germany
and the Meliá Confort Doña María or Tryp
Atlántico in Portugal. The number of city
hotels in Spain also grew by 40 properties.
Our arrival in Rome and Brussels is also another
step towards achieving our objective of
being in all of the major European cities and
establishing our position as an important player
in the European business travel market.
“The incorporation
of the Meliá Roma
Aurelia Antica is
another step
towards the
development of our
expansion policy in
the capitals and
major cities of
Europe and another
sign of our firm
commitment to Sol
Meliá growth in
Italy, a country that
is host to an average
of 35 million
visitors per year”.
”
Andrés Encinas,
Executive Vice President
European City Division
Diversification in European
Resorts
Sol Meliá ended the year 2000 having added
23 hotels with 4,790 rooms. Amongst the
additions, the company confirmed its firm
intention to remain the market leader in
resort hotels in the Mediterranean with 11
Meliá Royal Tanau Boutique Hotel
In European cities Sol Meliá currently has a
portfolio of 153 hotels with 22,649 rooms, 132
of them (19,581 rooms) in operations and 21
under development in Spain, Italy and
Portugal with a total of 3,068 rooms.
new hotels in Tunisia (8 of which came with
the purchase of Tr yp) and another in
Morocco. The addition of the Tryp Roc de
Caldes made Andorra the 30th. country in the
Sol Meliá portfolio.
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MILESTONES 2000· HOTEL GROWTH
In Spain the number of hotels grew by 10: 6 on
the Costa del Sol, 2 in the Canary Islands, 1 in
Lérida and 1 in Pontevedra (Galicia). Amongst
the new hotels, special mention must be made of
the Meliá Royal Tanau Boutique Hotel (Valle de
Arán - Lérida), which together with projects
under development for new hotels in Formigal
and Vielha, will further strengthen Sol Meliá’s
leadership of the Spanish ski resort market.
Many of the hotels in the Division have also
seen considerable improvements to their facilities:
enlargement of sports and leisure installations,
perfection of entertainment programmes,
new food and beverage concepts, environmental
protection or changes in the organisation
of services to better adapt them to the real
needs of guests.
A large number of resort hotels have also added
options for congresses, conventions and incentives.
These new and comfortable facilities for business
travellers are equipped with the latest modern
technologies and provide an interesting and complementary
addition to hotel facilities that is
expected to reduce seasonality in the business.
The intense activity carried out by the Division
in making improvements to product and service
quality has been rewarded by many major
tour operators. Over the year 2000, many
hotels have received awards, including:
“Sol Meliá is firmly
committed to
development in the
Mediterranean
region, an area
which is still one of
the world’s most
popular, competitive
and profitable
holiday destinations.
We are also firmly
committed to aiding
socio-economic and
cultural development
in those countries in
which we operate”.
”
Marcello Pigozzo,
Executive Vice President
European Resort Division
AWARD TOUR HOTEL
OPERATOR
ACCOMODATION AWARD Airtours -Sol Magalluf Park (Majorca)
-Sol Alcúdia Center (Majorca)
-Sol Élite Gavilanes (Menorca)
-Sol Élite Menorca (Menorca)
BEST 3 STAR ON THE Airtours -Sol Príncipe-Principito
COSTA DEL SOL
(Torremolinos-Malaga)
OVERALL AWARD BEST 4T HOTEL Thomson -Sol Príncipe-Principito
SKYTOURS PROGRAMME
(Torremolinos-Malaga)
GOLD AWARD Thomson -Sol Guadalupe (Majorca)
-Sol Mirlos Tordos (Majorca)
-Sol Cala Blanca (Majorca)
GOLD AWARD FOR BEST SUMMER Thomson -Sol Élite Gavilanes (Menorca)
RESORT DESTINATION
The European Resort Division includes 154
hotels with 46,819 rooms, of which 137 hotels
with 41,954 rooms are currently in operation.
The additional 17 hotels with 4,865 rooms
currently under development will be located in
Egypt, Italy, Malta, Spain and Tunisia. The
figures illustrate the objective of Sol Meliá to
maintain its position as the world’s largest
resort hotel company.
The power of Latin America
and the Caribbean
At the end of 2000, Sol Meliá closed another
year as the leading hotel company in Latin
America and the Caribbean, the opening of 13
more hotels in the two regions having extended
this lead even further. During the year 7
new hotels with 1,430 rooms were added in 3
countries in the Americas Division: Brazil (5),
Panama (1) and Peru (1), and another 6 with
2,593 rooms joined the Cuba Division.
The company thus was able to consolidate its
position in Brazil, now with 13 Sol Meliá
hotels, and extend its presence to new countries
such as Peru and Panama. With easy access to
the nearby airport, historical city centre and
Congress Centre, the Meliá Lima provides
excellent business and leisure options. The
Meliá Panama Canal, located in a spectacular
natural environment, provides great sports and
business facilities adapted to satisfy the needs
of the widest range of different types of guests.
The 20 hotels operated by Sol Meliá in Cuba
make the company the leading hotel company
in this Caribbean island. The 6 hotels added
during the year 2000 are a further indication of
the company’s firm commitment to this first
class tourism destination and, especially, to the
booming region of “Los Cayos”. Sol Meliá
currently operates 3 hotels in Cayo Coco, 2 in
Cayo Guillermo and one in Cayo Largo and is
soon scheduled to open another hotel in Cayo
Santa María.
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MILESTONES 2000· HOTEL GROWTH
Paradisus Punta Cana
Latin America and the Caribbean are considered
to be natural markets for Sol Meliá and the
company has thus extended and improved its
portfolio in the region, both in the city, with a
presence in most of the region’s capital cities,
and in resorts, with the inauguration of
modern Convention Centres in three of its
finest properties: the Meliá Cancun, the Meliá
Cabo Real (Mexico) and the Meliá Caribe
(Punta Cana-Dominican Republic).
The quality of the products and services provided
by Sol Meliá in the region has also been
recognised by many important Tour Operators.
The Meliá Azul Ixtapa and Meliá Cabo Real in
Mexico have received the Golden Apple Award
from the US Tour Operator Apple Vacations,
while Jet Tours has named the Paradisus Punta
Cana (Dominican Republic) as winner of its
Quality Facilities Trophy.
With a portfolio of 100 hotels and 26,057
rooms, the future of the leadership of Sol Meliá
in the region is guaranteed. Furthermore, the
34 hotel projects under development will add a
further 8,102 rooms in Brazil, Cuba, Mexico,
Peru and Puerto Rico.
“We aim to maintain
our leadership
position in Latin
America and the
Caribbean with
hotels in paradise
locations, able to offer
the finest
accommodation, food
and beverage and
entertainment
services with the
support of the latest
modern technologies
and extensive
meeting and
convention facilities.
We will thus attract
both business and
leisure travellers and
achieve one of our
eternal objectives: the
reduction of
seasonality”.
”
Evagrio Sánchez,
Executive Vice President
Americas Division
Meliá Panamá Canal
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MILESTONES 2000 · RESEARCH & DEVELOPMENT
E-Transformation: Creating a Company
for the 21st. Century
d
During the year 2000, Sol Meliá embarked on a
process of “E-Transformation”, a complex but
wholly necessary process to adapt the company
to the needs of a 21st. century business. With a
budget of around 12,000 million pesetas for creating
new technological infrastructures and participating
in joint ventures, the company aims to
remain highly competitive in a world in which
new technologies will play an increasingly
important role. The investment is distributed as
follows: E-Transformation (5,000 million pesetas
- 30 million Euros), E-Procurement (500
million pesetas - 3 million Euros), Prodigios
(3,500 million pesetas - 21 million Euros) and
Meliaviajes.com (3,000 million pesetas - 18
million Euros).
To assist in the implementation the company
has created a new E-Business Division led by
Luis del Olmo, also the Executive Vice
President of Sales & Marketing. Company
strategy is divided into three areas which are
enormously different but in which there are
three common objectives: to place the customer
at the heart of the organisation, to make
processes more efficient and save costs. The
three areas are:
1. Business to Consumer
(B2C) or Sell Side.-
Based on changes in our relations with our
customers, improving the distribution of our
products, improving the ability to attract new
customers and retain them through efficient
loyalty programmes and also improving the
services and information provided to real and
potential hotel guests. This is expected to
“We aim to
generalise the use of
the Internet and
new technologies to
find new ways of
distributing our
products and
improving the
services we provide
to our guests,
centralising all of
our procurement
procedures and
carrying them out
online, improving
the efficiency of our
operations and
optimising the
functionality of the
Sol Meliá Intranet
to improve internal
management at all
levels”.
”
Luis del Olmo Piñeiro,
Executive Vice President
E-Business
generate a greater number of reservations with
a consequent increase in revenues and decrease
in distribution costs.
Solmelia.com.- the company is currently
working on the development of a new generation
website (www.solmelia.com) to adapt the
site to the developing needs of users. A faster
and easier search engine, a more modern
design and the incorporation of innovative
new services are just some of the features that
the new site will have.
Meliaviajes.com.- This new multichannel
travel company is destined to become
a major player in the travel industry. Initially
the company will operate in Spain and
Portugal, before moving on to Latin America.
The investment earmarked for development is
set at almost 3,000 million pesetas.
AOL Avant.- Sol Meliá was a co-founder
of the generalist portal “Prodigios” which
was later also supported by Planeta and BSCH.
The initiative has ended up being integrated
with AOL Avant, the Spanish arm of America
Online which has been set up at the ParcBit in
Palma de Majorca. With a shareholding of
6.2%, Sol Meliá is also taking part in family
and leisure portal through Meliaviajes.com,
the exclusive provider of travel reservation services
through the site. The Banco Santander
Central Hispano (BSCH) and American Online
(AOL) hold 40% stakes in the business and
Planeta holds 6.17% with the remainder in the
hands of minor shareholders.
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MILESTONES 2000 · RESEARCH & DEVELOPMENT
2. Inside.
The company is working on optimising the
functionality of its Intranet to improve internal
company management at all levels. The
incorporation of the SAP platform (System
Application Programmes) will allow the storage
of an immense amount of data, required
to accelerate and improve processes using
Internet channels. The new applications cover
5 main areas: Sales Force Automation (SFA),
hotel receptions (RA 2000), financial control
tools (FICO), Human Resources (PA and
PP) and purchasing (MM). The integration
and use of these valuable applications are
expected to generate significant savings in
time and money.
3. Business to Business (B2B).
Buyside.
The incorporation of new technologies will
also bring the centralisation of purchasing processes
and allow them to be carried out online,
leading to improved efficiency, more competitive
pricing and reductions in operating costs.
Sol Meliá is a co-founder together with
Telefónica, Barceló, Iberostar and the BBVA of the
Hotelnetb2B.com portal. A further 18 hotel
companies have taken a stake in the venture
which aims to provide the finest possible service
to all hotel managers and their suppliers to allow
them to optimise the purchasing process for
goods and services using new technologies.
The portal aims to operate throughout Spain,
the Mediterranean and Latin America and already
has a portfolio of more than 900 hotels in 21
countries. The expected investment for its first
two years of operations is 5,000 million pesetas
(€30 Mn.).
This firm commitment to e-transformation has
already begun to bear fruit, with awards received
during the year 2000 including the following:
AWARD FROM TO
Estrategas.com Dinero Magazine Sebastián Escarrer
(Vice Chairman Sol Meliá)
Best Website CETT (Hospitality & Sol Meliá
Tourism Research Centre)
Hermes Award HTR Magazine (France) Sol Meliá
for Best Website
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MILESTONES 2000 · EVERYTHING IS POSSIBLE CAMPAIGN
With Sol Meliá, everything is possible
mMore than 33,000 people in 30 countries on 4
continents are at work every day to ensure that
when we say that in Sol Meliá “everything is
possible” we really mean it. It is the excellent
work and enthusiasm of this immense team
that is the principle ingredient in the company’s
recipe for success.
During the year 2000 Sol Meliá has very successfully
incorporated the more than 2,000
employees of the Tryp hotel chain to the team.
Together with the incorporation of a stream of
new hotels due to the rapid growth of the company,
the deal has led to the creation of many
new opportunities for professional development
and an enriching exchange of experience
and know-how.
Training and promotion are the foundations
on which Sol Meliá human resources policy is
built, a philosophy that has remained intact
since the day the company began. An example
may be seen in the collection of training courses
out together by the Human Resources
Department aimed at achieving company
objectives on product and service quality.
The company also continues to develop its
extensive internal Management Development
Programme for Hotel General Managers, inaugurated
in 1988, based around an 18-month
period of theoretical and practical training
followed by a period as Assistant General
Manager in a hotel before moving up to a
General Manager position. The Human
Resources Department also coordinates
Corporate Career Plans for key positions in
the company structure, and internal development
programmes for Sales Managers and
Administration Managers.
“The success of any
good business person
depends on them
surrounding
themselves with a
truly great team
and in a situation
where positions are
earned rather than
granted”.
”
D. Gabriel Escarrer Juliá,
Chairman
On an institutional level, Sol Meliá enjoys
active and fruitful relations with prestigious
universities and other centres of learning
world-wide co-operating on the placement of
students and training courses.
In June 2000 Sol Meliá signed an agreement
with the Autonomous University of Barcelona to
jointly develop projects aimed at improving the
training and education of future professionals
in the tourism and hospitality industries.
The agreement includes cooperation in developing
an integrated tourism training model to
cover the entire educational cycle and combine
both practical and theoretical learning. More
than 1,000 students from the Catalonian
Tourism and Hospitality faculties will be given
in-house training at the Tryp Campus, a hotel
which is managed by Sol Meliá and located in
the same building as the two faculties.
The company has also been involved in a
large number of similar projects including
sponsorship of wine education courses ate the
Balearic Islands University or the course on
Tourism Development Management organised
by the University of Wisconsin-Stout, the
Balearic Islands Hotel School and the Balearic
Islands University Tourism School. The company
also reached an agreement with the
Galicia Hospitality School to train senior
managers.
Finally, the Sol Meliá website (www.solmelia.com)
also has a special section for employment
opportunities with the company and a
dedicated e-mail service for candidates at
(rrhh@solmelia.com).
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MILESTONES 2000 · QUALITY & ENVIRONMENT
Towards Total Quality
sSol Meliá continues with the implementation
of its ambitious corporate standards programme,
working towards “Total Quality”. Under
the slogan “Your satisfaction, our commitment”,
the philosophy of the company is based
around placing its 5 different types of clients
(hotel owners, shareholders, suppliers, guests
and employees) at the very heart of the organisation
and adapting its products and services to
their needs and preferences.
During the year 2000 the Guest Satisfaction
Programme has been given a further impulse
aiming to provide an immediate response to
the needs of increasingly discerning guests.
The company is in the process of gradually
introducing a new Guest Satisfaction
Assurance programme which aims to improve
service quality and levels of personalisation,
while also increasing the motivation of hotel
teams through a flexible system which focuses
on Creating Memories for guests and anticipating
their needs.
Thanks to the fine-tuning of processes, the use
of new quality control tools and the active and
enthusiastic involvement of personnel, problems
may be detected and resolved more
quickly, while fluid communication channels
and a will to learn from the experiences of
others mean that in Sol Meliá its really true
that “everything is possible”.
Recognition for a job
well done
Since the company created its firs Guest
Satisfaction Programme in 1994, the constant
“At Sol Meliá we
encourage a
philosophy of
Continuos
Improvement and
competitiveness,
which means not
only complying
with standards, but
also going one step
further, keeping up
with our clients as
their needs develop
and trying to stay
one step ahead of
those needs”.
”
Sierra
Gabriel Escarrer Jaume,
Chief Executive Officer
Gran Meliá Don Pepe
Nevada
efforts by the company to grow and adapt to
the changing needs of guests have been rewarded
with a large number of official certifications.
In 1996 Sol Meliá became the first
European hotel company to achieve ISO 9002
Quality Certification, a distinction that would
later be shared by the Meliá Lebreros hotel
(Seville) or Meliá Kuala Lumpur (Malaysia),
amongst others.
Another 12 company hotels in Spain have also
merited the “Q” for Quality granted by the
Spanish Hotel Quality Institute to those hotels
that tirelessly strive to create “continuous
improvements” in their products and services.
The hotels are the Meliá Zaragoza, Meliá
Sierra Nevada and Meliá Granada (Granada),
Meliá Balneario Mondariz (Pontevedra), Gran
Meliá Don Pepe, Meliá Costa del Sol, Sol Élite
Aloha Puerto, Tryp Alameda and Sol Príncipe-
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MILESTONES 2000 · QUALITY & ENVIRONMENT
Principito (Malaga), Gran Meliá Bahía del
Duque (Tenerife), Sol Magalluf Park (Majorca)
and Meliá Altea Hills Resort (Alicante). The
Meliá Varadero in Cuba has also received the
“Quality 2000” award from the Tour Operator
Cubanacan.
Respecting the Environment:
a commitment to Sustainable
Tourism
Always conscious of the importance of environmental
respect and conservation, Sol Meliá
was the first Spanish company to create its
own Corporate Environmental Protection
Manual back in 1995. The insistence of the
company’s senior management has been a decisive
factor in making the environment a priority
concern in all company activities and in
introducing the concept of sustainable development
in the company’s strategic planning
processes.
“Increasing environmental
sensitivity
bring a need to define
and document in a
written Manual our
company policies. Sol
Meliá believes in an
equation that says
Better environment
+ Better product +
Better Service =
Better quality.
Training our staff
and improving the
information we
provide to our guests
is the road we have
to follow to ensure we
achieve our environmental
plans and
that our achievements
are rewarded.”
”
Agustín Serrano,
Executive Vice President
Quality and Technology
Apart from creating its own internal
Environmental Management Systems, Sol
Meliá has also taken part in a large number of
initiatives organised by private and public
bodies aiming to continue to make progress in
the application of its environmental protection
policies. Company representatives have taken
part in the AENOR Work Group designing
regulations to adapt ISO 14001 to the hotel
sector, which a large number of hotels have
also signed up with the Environmental
Foundation.
The Environmental Department organises and
manages hotel staff attendance on courses and
seminars on environmental policy and offers
consultancy services for hotels. Sol Meliá also
provides internal assessment services on environmental
legislation for certified hotels and
works together with hotels to constantly update
procedures manuals to ensure continued
compliance with environmental protection
guidelines.
Meliá Varadero
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MILESTONES 2000 · QUALITY & ENVIRONMENT
Sol Gavilanes
Rewarding Environmental
Concern
The great challenges Sol Meliá has overcome
to implement its environmental protection
policies have been amply rewarded both in
Spain and abroad with numerous awards from
prestigious environmental protection organisations.
These are the hotels that have received environmental
management certification:
Sol Magalluf Park
CERTIFICATION
ISO 14001
HOTEL
Sol Élite Falcó (Menorca)
Sol Pelícanos Ocas (Benidorm-Alicante)
Sol Élite Milanos/Pingüínos (Menorca)
Meliá Confort Montevideo (Uruguay)
Sol Magalluf Park (Majorca)
CERTIFICATION
EMAS (European Community “Eco-Management and
Audit Scheme”)
HOTEL
Sol Élite Falcó (Menorca)
Sol Cala d’Or ( Majorca)
Sol Élite Gavilanes (Menorca)
Sol Pinet Playa (Ibiza)
Meliá Barcelona (Barcelona)
Meliá Confort Apolo (Barcelona)
Meliá Confort Girona (Gerona)
Meliá Sitges (Barcelona)
Sol Falcó
CERTIFICATION
GREEN GLOBE COMMENDATION AWARD
1999 and 2000
HOTEL
Meliá Bali (Indonesia)
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MILESTONES 2000 · COMPANY AND SOCIETY
A Useful Member of Society:
Sponsoring with Sensitivity
a
A high level of commitment to society has
always been one of the distinctive characteristics
of Sol Meliá. In this sense, our sponsorship
of cultural and sports events or other occasions
to benefit society has always been the most
common means of demonstrating our commitment
and contributing to the development of
less privileged communities while encouraging
excellent relations between our hotels and their
neighbours.
During the year 2000 Sol Meliá worked together
with a very wide range of organisation on
many different projects, all aimed at encouraging
the integration into society of people with
some type of problem, fighting injustice, relieving
illness or epidemics or improving the quality
of life in areas in need:
“Sol Meliá has
always professed a
firm desire to offer a
service to society
and to contribute to
improvements in
the quality of life”.
”
Jaime Puig de la Bellacasa,
Director of
Communication and
Institutional Relations
BENEFICIARY
NIDO Foundation for
assistance and support
for the disabled
ACTION AGAINST
HUNGER
EVENT
SPONSORED
Christmas market to
gather funds
to assist with
attending to the
needs of members.
Inclusion in Solidarity
Campaign of
Clara Magazine to finance
a Nutrition Therapy Centre
in Gao (Mali).
4 SOLIDARITY PROJECTS Participation in the
· Untouchables in India “Solidarity Telephone”
· Angolan war victims initiative organised by the
· Straits of Gibraltar immigrants Sunday supplement
· Street children Brazil of the Spanish daily
newspaper “La Vanguardia”.
SPANISH ASSOCIATION
AGAINST CANCER
Sponsorship of Grand
Charity Gala Dinner for the
Balearic Delegation of the
Spanish Association Against
Cancer.
WORLD HEART
FEDERATION
MESSENGERS
OF PEACE
Sponsorship of
“World Heart Day”
September 2000.
Participation in the
“Telemarathon” organised
by Antena 3 TV.
Co-operation in the
Christmas Charity Concert
Organised by
Globomedia and shown
on Tele 5 TV.
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MILESTONES 2000 · COMPANY AND SOCIETY
Support for education, the arts and culture,
whatever the genre or origin, is another of the
constant pillars of the company sponsorship
programme. Over the year we took part in:
On the sporting field, Sol Meliá was an active
participant in a number of events through different
sorts of sponsorship. Our support and
promotion of the benefits of sport were seen in:
BENEFICIARY
Red Cross
EVENT
SPONSORED
Concert by
JOSÉ CARRERAS
in Palma de Majorca
Co-operation agreement
With the Spanish
Red Cross to train
employees
The firm commitment of Sol Meliá to sponsorships
that bring some benefit to society will
continue in the 21st. century, maintaining our
solidarity with local communities as we prepare
to face the challenges of increasingly complex
markets.
SPORT
Tennis
EVENT SPONSORED
III Edition of the Majorca
Open ATP Tennis Tournament
Hotel School
of the Balearic Islands
UIB Tourism School
& University of
Wisconsin-Stout
European Wine
Management
course organised by the
Hotel School
of the Balearic Islands
the UIB Tourism
School and the
University of
Wisconsin-Stout
Sailing
Diving
Golf
Regatta
Cadiz - Havana
World Record Attempt
La Palma-Isla Bonita
Corporate Challenge
Golf Spain
Europa Universitas
Foundation
XIII Edition of the
Europa Universitas
Awards
October Productions
Filming of the
“El Mar de l’Home”
series
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SOL MELIÁ IN THE 21 ST.
CENTURY
Looking to the Future
sSol Meliá faces the 21st. century with the solidity and confidence that
has been gained from almost half a century of operations and having set
in motion the internal reorganisation that will allow the company to meet
the growing challenges of the new millennium. One of the major features
of this preparation has already been seen when after detailed research
and analysis Sol Meliá has slimmed down and reorganised its hotel brand
portfolio to better focus and segment its products and services.
The finalisation of the three-year hotel refurbishment programme, with
investments of over 60,000 million pesetas, and the current pipeline of
over 80 signed hotel development projects, means that by 2003 the company
will have grown to at least 420 hotels in 32 countries with more
than 102,000 rooms.
The coming years will also see the consolidation of the company’s
investments in new technology. Greater flexibility in processes and
important cost savings will be the first noticeable consequences of new
systems. At the same time we will also see the release of the fourth generation
www.solmelia.com, continued growth in quality joint ventures
aimed at increasing our distribution, the growth and consolidation of
our multi-channel travel agency, meliaviajes.com and the automation of
internal systems to allow us to move towards far greater personalisation
and superior quality service.
The 21st. century Sol Meliá will continue to be a company that is firmly
committed to preserving the natural environment, passionate about quality
and placing the customer at the very heart of our organisation. A
company in constant growth, perfectly integrated in its social and natural
environments. A company that will continue to strive to maintain its
position as one of the world’s finest hotel chains and with the finest
team of people working to achieve that aim.
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SOL MELIÁ IN THE 21 ST.
CENTURY · BRAND STRUCTURE CHANGE
t
Simplifying things:
New Sol Meliá Brand Structure
The rapid growth enjoyed by Sol Meliá in recent
years together with the development of the
international hotel industry in general brought
the company around to analysing its hotel portfolio
and considering the possibility of introducing
certain modifications aimed at simplifying
and better segmenting its hotel products.
After the purchase of Tryp Hotels, the incorporation
of a new group of hotels provided an ideal
opportunity for revisiting the subject of brand
structure with the assistance of Infratest Burke,a
world leader in ad-hoc market research and strategic
brand positioning, and analysing the market
perception of company brands and the characteristics
they are felt to have.
The results of the analysis made it very clear that
the Meliá brand is extremely well known and
respected and that the Meliá Confort brand is
associated with Meliá but transmits no clear
notion of the services its hotels might provide
nor its category. The Tryp brand is very clearly
associated with city locations and functional
hotels. Sol and Sol Élite hotels are not seen to be
any different from each other, while Sol Inn is a
brand with limited recognition and confusion
over its nature.
The research also showed how the international
hotel market concentrates a large number of
properties in a limited number of brands and
uses the concept of sub-brands for specialist
market segments such as health, golf and congresses,
amongst others.
“Sol Meliá has
decided to simplify
and clarify its
brand structure,
eliminating those
brands that may
have created
confusion or lacked
high brand
awareness, and
repositioning the
remaining brands
in the market niches
to which they are
best suited”
”
Sebastián Escarrer,
Vice Chairman
100 (90)
157 (111)
8 (3)
BRANDS - CATEGORY - SECTOR
BRAND CITY RESORT
Paradisus Resorts: exceptional “all inclusive”
hotels located in exotic and very special
destinations.
Meliá Hotels & Resorts: prestigious,
luxury hotels in the five star and superior four
star categories, especially suitable for meetings
and conventions.
Tryp Hotels: located in major city destinations,
providing excellent value for money for
business travellers.
Sol Resorts: great value for money and the
widest range of sports and entertainment activities
for the whole family.
155 (137)
5 STAR
ALL INCLUSIVE
5 STAR 5 STAR
SUPERIOR 4 STAR SUPERIOR 4 STAR
4 STAR
SUPERIOR 3 STAR
4 STAR
SUPERIOR 3 STAR
The company will be investing a
total amount of 2,000 million
pesetas in carrying out the
changes required to adapt to
the new brand structure, 400
million of which will be
spent on an advertising campaign.
As a result of the conclusions of the research, Sol
Meliá has reorganised its hotel portfolio into a
new brand structure:
Sol Hotels & Resorts
Tryp Hotels
( ) Operating Hotels
Meliá Hotels & Resorts
Paradisus Resorts
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SOL MELIÁ IN THE 21 ST. CENTURY · NEW PROJECTS
Sol Meliá: consolidating
constant growth
Sol Meliá is the biggest resort hotel company
in the world, leader in the Spanish, Latin
American and Caribbean markets, the second
largest hotel company in Europe and the
tenth largest in the world. These market seg-
sments will also form the backbone of the
company’s expansion policy, aiming to
strengthen its leadership position in its key
destinations. Thus Latin America and the
Caribbean, the Mediterranean region and
major cities in Spain and Europe are the
areas in which hotels are under development
and in which future focus will continue to
reside, with particular attention to the city
hotel market and consolidating leadership
positions in all markets.
“Our main objective
is to continuing
growing in our natural
markets: major
cities in Spain and
Europe, the Mediterranean
region and
Latin America and
the Caribbean. In
parallel we will be
absorbing the 22,000
rooms already
scheduled to be added
and to reaffirm our
commitment to
geographical and
business
diversification”.
”
Ángel Palomino,
Executive Vice President
Hotel Development
After the purchase of the Tr yp hotel chain,
on 31/12/00 Sol Meliá had a portfolio of 347
hotels in 30 countries and 83 signed agreements
for new hotels*, which, when incorporated,
will bring the portfolio up to 420
hotels 102,000 rooms in less than 3 years.
Next year will also see continuity in the process
of renovations of the portfolio to adapt
them to company product and service quality
standards.
The regions of Latin America and the
Caribbean, Europe and Spain’s major cities,
and the Mediterranean region in general are
not only the company’s natural markets, but
also the destinations in which all new projects
are located. Sol Meliá will continue to
focus on the city hotel market and the consolidation
of its market leadership.
• As of 31/12/00 but susceptible to modification in the coming months as
the Company incorporates new development projects.
Gran Meliá Jakarta
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SOL MELIÁ IN THE 21 ST. CENTURY · NEW PROJECTS
The 83 projects under development with
21,000 rooms are distributed as follows:
NEW HOTEL PROJECTS BY DIVISION
EUROPE · MEDITERRANEAN
Resort City TOTAL
Hotels 23 25 48
Rooms 6.946 3.375 10.321
AMERICAS · CUBA
Resort City TOTAL
Hotels 7 28 35
Rooms 4.595 6.081 10.676
NEW HOTELS (ROOMS) BY OWNERSHIP TYPE
Owned Leased Managed Franchised Total
2000* 5 (1,027) 48 (6,978) 23 (5,224) 6 (1,252) 82 (14,481)
2001 3 (915) 9 (1,515) 29 (7,632) 2 (162) 43 (10,224)
2002 5 (1,443) 7 (1,245) 17 (5,881) ——— 29 (8,569)
2003 ——— 3 (424) 8 (1,780) ——— 11 (2,204)
TOTAL 8 (2358) 19 (3184) 54 (15,293) 2 (162) 83 (20,997)
* Hotels already incorporated (including Tryp)
After gaining a position in the world hotel
company top ten, Sol Meliá continues to seek
future growth based on sustainable expansion
in its main markets but with a view to becoming
an increasingly global company. This
growth is expected to reinforce the company’s
leadership positions and its brand awareness
world-wide.
Meliá México Reforma
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SOL MELIÁ IN THE 21ST. CENTURY · COMPLETING THE E-TRANSFORMATION
A Company for the New Millennium:
completing the E-transformation
t
The first few years of the 21st. century will see the
consolidation of the Internet as a channel for an
important volume of sales transactions. In this new
economy, the only companies that will remain competitive
are those that have been able to adapt their
organisation to the requirements of the emerging
market and whose structure is sufficiently flexible
and open to grow along with it. Fully aware of the
need for change to face the new future, in the year
2000 Sol Meliá began an ambitious “e-transformation”
process which is now nearing completion.
Given that an optimum performance would never
be possible without solid internal infrastructure,
the company is also finalising the renovation of all
of its computer systems to create a single, unified
and integrated platform which will provide cost
reductions, accelerate processes and store and
process enormous amounts of information. This
new nucleus will avoid loss of information, external
filtration and pirate programmes. The final
stage of the integration of SAP (System
Application Programme) will take place over the
next couple of months, allowing the automation
of most of the company’s principal functions.
“Sol Meliá is
modernising its
entire technological
platform in order to
prepare the company
for a new era and
face the challenges of
the 21st. century in
optimum conditions.
This commitment
will allow us to fully
adapt our internal
and external
management to new
technologies and
really become a
“solmelia.com”.
”
Hervé Imbert,
Executive Vice President
Information Systems
In parallel with these internal changes, the company
is also working on several important initiatives
on both the Sell Side (clients) and Buy Side
(suppliers) to change the way that we do business.
On the Sell Side, the use of new technologies in
different aspects of the company’s business is
expected to generate significant increases in
revenues and reductions in distribution costs:
SolRes.- The central reservations system
rebuilt using latest generation technology and with
a centralised structure operating 24 hours a day.
www.solmelia.com.- The fourth generation
of the website will personalise interactions
with users as they make real time reservations
and greatly extend the information available on
the company and its hotels.
meliaviajes.com.- A new multi-channel
travel agency aiming to become market leader
providing a wide range of destinations and holiday
experiences tailor-made for customers on an
individual basis.
Sol Meliá and Telefónica Data have reached an
agreement to implement the “SolNet” network
allowing an “on line” connection of all of the
company’s hotels in 30 countries on 4 continents
as well as its different corporate offices. The creation
of a modern global network will increase
the efficiency of internal communications while
also generating important savings in time and
money. It will also ensure the receipt of more
reliable information both on guests and on internal
operations, and, in the short-term, allow
direct Internet access for all guests from their
hotel rooms.
Loyalty programmes.- The consolidation
of company Loyalty Programmes is another
of the objectives of the e-transformation.
Members are already able to access all of the
information on programmes through the website
(www.solmelia.com) as well as checking their
account.
The company is also actively supporting joint
ventures or alliances in new technology ventures
with market leaders in different sectors of the
economy that are expected to add value to the
products and services provided by Sol Meliá.
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tThe following section describes how the company Statutes, regulations
for the Board of Directors and company activities comply with the
recommendations that appear in the Good Governance Code for public
companies published in February 1998 by the Special Commission for
the study of an Ethical Code for Company Board of Directors.
1 Function of the Board of Directors
“That the Board of Directors should explicitly assume as the nucleus of
their mission the general function of supervision; exercise without delegation
the responsibilities this implies; and establish a formal record of
the items reserved for their knowledge”.
Article 34 of the Statutes states that the Board of Directors is responsible
for the representation, direction and administration of the company
with respect to all of the activities undertaken within the objectives of
the company as limited by the Statutes, as well as those activities required
by Law and the Statutes, and without prejudice to those activities
specifically reserved for them at the General Shareholders’ Meeting. The
mentioned Article details the legal acts or business which are within the
competence of the Board of Directors.
2 Independent Directors.
“That the Board of Directors includes a reasonable number of independent
Directors that are persons of professional prestige unrelated to the
company management team nor significant shareholders”.
Article 31 of the Statutes specifies the requirements for Independent
Directors. The same Article states that, without prejudice to the stipulations
of Company Law, and to guarantee the independent criteria of
the Board and the defence of the best interests of the company and its
shareholders, at least one third (1/3) of the members of the Board of
Directors must be Independent Directors.
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The Board of Directors of the company on 31st. December, 2000 consisted
of six non-Independent Directors and five Independent Directorsocho.
3 Composition of the Board of Directors.
“That external Directors (representatives of majority shareholders and
independents) should represent a large majority of the members of the
Board of Directors with respect to company executives and that the
proportion between representatives of majority shareholders and independents
should be established bearing in mind the relation that exists
between majority and minority shareholders”.
The Sol Meliá, S.A. Board of Directors at 31st. December, 2000 comprised:
Executive Chairman
Gabriel Escarrer Juliá
Non-Independent Director
Non-Executive Vice Chairman
Juan Vives Cerdá
Non-Independent Director (Representative)
Executive Vice Chairman
Sebastián Escarrer Jaume
Non-Independent Director
Chief Executive Officer
Gabriel Escarrer Jaume
Oscar Ruiz del Río
AILEMLOS S.L.*
Hoteles Mallorquines Consolidados S.A.
P.P. by: Mª Antonia Escarrer Jaume
Eduardo Punset Casal
Alfredo Pastor Bodmer
José Joaquín Puig de la Bellacasa Urdampilleta
Emilio Cuatrecasas Figueras
José María Lafuente López
Non-Independent Director
Non-Independent Director (Representative)
Non-Independent Director (Representative)
Non-Independent Director (Representative)
Independent Director
Independent Director
Independent Director
Independent Director
Secretary Independent Director
* The company AILEMLOS S.L was designated as Director in January 2001, making the total
number of current Directors 12.
4 Number of Directors
“That the Board of Directors adjusts its size in order to achieve more
efficient and participative operations. In principal, the appropriate size
may oscillate between five and fifteen members”.
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According to the Statutes, articuloArticle 31.2, “The Board of Directors
should consist of a minimum of five and a maximum of twenty members
chosen by the General Shareholders’ Meeting”.
On 31st. December, 2000, the Board of Directors comprised 11 members.
5 The Chairman of the Board of Directors
“That, should the Board opt to combine the roles of Chairman and
chief Executive in one person, the Board should adopt all necessary
cautionary measures to reduce the risks of concentration of power in
one person”.
This recommendation has been carried out given that the Chairman of
the Board of Directors does not have and faculties delegated by the Board
of Directors. At the same time a number of additional measures are in
place to ensure compliance: appointment of two Vice Chairmen and a
Chief Executive Officer, creation of two delegate commissions, etc.
6 The Secretary of the Board of Directors
“That the figure of Secretary of the Board be given far greater relevance,
reinforcing their independence and stability and highlighting their
function to ensure the formal and material legality of the actions of the
Board”.
Article 33 of the Statutes, as well as the Regulations of the Board of
Directors, in its Article 12, highlight the figure of the Secretary of the
of the Board of Directors placing amongst his functions to support the
Chairman in his labours and to provide directors with the advice and
information they require as well as conserving all documentation and
maintaining minutes on the development of the sessions and agreements
reached. Directors are also formally committed to appointing a person
that is capable of performing the role appropriately as Secretary.
The current Secretary of the Board of Directors is an Independent Director.
7 The Executive Commission
“That the Executive Commission, wherever such exists, should reflect
the same balance as the Board between different types of Directors and
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that the relations between both bodies is based on principals of transparency,
in such a way that the Board is fully aware of the matters dealt
with and decisions made by the Commission”.
Article 39 of the Statutes foresees the possibility of the constitution of
such a commission, although it has not been deemed necessary to date
given that a full meeting of the Board has always been required.
8 Delegate Control Commissions
“That the Board of Directors creates within its ranks delegate control
commissions, made up exclusively of external Directors, to monitor
accounts information and control (Audits); selection of Directors and
senior management; remuneration policies and reviews; and the evaluation
of governance”.
On 23rd. February, 1999, the Board of Directors agreed to create, in line
with Article 14 of the Regulations of the Board, the following delegate
commissions:
1. Auditing and Compliance Commission, which includes amongst
its functions the proposal of Auditors, the review of annual
accounts and of compliance with legal requirements, correct application
of accountancy principles and the provision of financial
information adapted to those principles, as well as examining compliance
with the internal regulations governing compliance with
Stock Markets, the Regulations of the Board of Directors and the
governance rules of the company.
2. Appointments and Remuneration Commission, which includes
amongst its basic functions the formulation and revision of the criteria
that must be followed to form the Board of Directors and the
selection of candidates, the proposal to the Board of appointments
of Directors and of members that should form part of
Commissions, the periodic review of remuneration policies, the
supervision of the transparency of remuneration and information
on transactions that may imply conflicts of interests and, in general,
for the items included in Chapter VIBII of the Regulations of
the Board of Directors regarding the Duties of Directors.
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The Commissions are made up of three Directors, including at least one
Independent Director.
9 Information to the Directors
“That all necessary measures are taken to ensure that Directors are provided
sufficiently in advance with the information they require, specifically
prepared to assist in the duties of the Board without prejudice,
except in exceptional circumstances, to the importance or reserved
nature of the information”.
The Regulations of the Board of Directors in its Article 19 foresees that
Board meetings are convened by letter, fax, telegram or e-mail authorised
by the signature of the Chairman or the Secretary on behalf of the
Chairman. They also foresee the possibility that extraordinary sessions
of the Board are convened by telephone whenever the Chairman may
feel that circumstances make this appropriate.
In compliance with Article 35.2. of the Statutes, this communication
must include the agenda for the session along with a summary of the
information required.
Under normal circumstances the information will be provided to
Directors fifteen days in advance.
10 Functions of the Board of Directors.
“That, to ensure the appropriate performance of the duties of the
Board, meetings should be held with the frequency required to allow
achievement of objectives; that the Chairman should encourage the
intervention and independence of mind of all Directors; that special
care should be taken with the taking of minutes and that an assessment
of the quality and efficiency of the work of the Board should be carried
out at least once per year”.
The Board of Directors, as stated in articuloArticle 35.1 of the Statutes
must meet at least five times per year and whenever the interests of the
company require, whenever decided by the Chairman or by his substitute,
or on request of at least one third of the members of the Board, in
which case the Chairman should convene a Meeting of the Board within
a period of ten days from such a request.
During the year 2000, a total of eight Meetings of the Board were held.
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11 Selection and re-election of Directors.
“That the intervention of the Board of Directors in the selection and
re-election of its members is carried out using formal and transparent
procedures after presentation of a reasoned proposal by the
Appointments Commission”.
Article 16 of the Regulations states that the Appointments and
Remuneration Commission should formulate and revise the criteria to
be applied to the composition of the Board of Directors and the selection
of candidates.
The Commission must thus propose the appointment of Directors so
that the Board may directly approve them or submit such a decision to
the General Shareholders’ Meeting.
According to Article 31.3 of the Statutes, at least one third of the members
of the Board must be Independent Directors. These should be persons of
acknowledged prestige with no relation to the executive team or Major
Shareholders (as defined in Royal Decree 377/1991, of 15th. March).
12 Resignation of Directors
“That companies include in their regulations an obligation that
Directors resign in circumstances which might have a negative effect of
the functioning of the Board or the credit or reputation of the company”.
The Statutes state that the absence of any Director at three consecutive
meeting of the Board or at any four meetings within the same financial
year, without appropriate justification, will give ground to the Board to
declare that Directors automatic release from his position and to then
designate a provisional successor until such may be submitted to the next
General Shareholders’ Meeting for ratification.
Chapter VIII of the Regulations of the Board of Directors also deals
with this matter.
13 Age of the Directors
“That a maximum age is set for the position of Director, that may be
between sixty five and seventy for Executive Directors and the
Chairman, and more flexible for other members of the Board”.
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Neither the Regulations of the Board nor the Statutes include maximum
limits on the age of Directors.
14 Information for Directors
“That there is formal recognition of the right of all Directors to gather
and obtain the information and advice required to perform their supervisory
duties, and that appropriate means are established to allow this
right to be exercised, including the use of external experts in special circumstances”.
As stated in Article 35.8 of the Statutes, in the performance of their
duties Directors have the right to request the professional assistance of
company executives and internal advisors. They must also have free and
direct access either personally or through others delegated by them to all
of the company’s books and files, unless the Chairman refuses such right
in defence of the interests of the company. Such a refusal will not be permitted
whenever the Director in question has requested and obtained a
favourable vote of at least twenty five per cent (25%) of the inscribed
shareholders with a right to vote, as expressed in the General
Shareholders’ Meeting.
This right is also detailed in Chapter VI of the Regulations of the Board
of Directors.
15 Remuneration of Directors
“That the remuneration policy applied to Directors, the proposal, evaluation
and revision of which should be carried out by the
Remuneration Committee, should reflect moderation and company
performance with detailed and personalised information”.
As stated in Article 35 of the Statutes, Independent Directors receive an
amount of one million five hundred thousand pesetas for their attendance
at each session. This amount may be increased on agreement by
the Board in proportion with any increase in the consolidated profits of
the company, without prejudice to its posterior ratification by the
General Shareholders’ Meeting, either explicitly or through approval of
the Annual Accounts.
The remuneration of Non-independent Directors will consist of a fixed
annual amount, the same for all of them, to be defined or ratified by the
General Shareholders’ Meeting, without prejudice to the payment of
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fees or other amounts that may be due from the company for the provision
of professional services or derived from their private work as may be
the case.
Remuneration will be paid out after the end of the month in which it
may have been earned to ensure that it is proportional to the time that
the Director may have served on the Board during the year.
16 General duties of Directors and conflicts
of interest.
“That the internal regulations of the company detail the obligations
derived from the general duties of diligence and loyalty expected of
Directors, including, specifically, matters relating to conflicts of interest,
confidentiality requirements, the exploitation of business opportunities
and the use of company assets”.
Article 26 of the Regulations of the Board of Directors and others indicate
the obligations of Directors.
The most relevant obligations are:
1. The Director must maintain confidentiality regarding the deliberations
of the Board and the delegate Commissions of which they
may form part and, in general, must abstain from revealing information
to which they have had access due to their position.
2. The aforementioned confidentiality must be maintained even after
such person ceases to be a Director.
3. The Director may not occupy management positions in companies
whose mission or nature that is partially analogous with that
of the company, with the exception of other companies controlled
by the group.
4. Before accepting any management position with another company,
the Director must consult the Appointments and Remuneration
Commission.
5. The Director may abstain from attending or intervening in deliberations
that may affect matters in which they may be personally
involved.
6. The Director may not carry out, neither directly nor indirectly,
commercial transactions with the company.
7. In the performance of their duties, the Independent Directors
must declare any developments in their relations with the company,
controlling shareholders or companies associated with controlling
shareholders.
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17 Transactions with major shareholders
“That the Board of Directors should promote the adoption of appropriate
measures to extend the duties of loyalty to major shareholders,
establishing, specifically, cautionary procedures relating to any transactions
carried out between such shareholders and the company”.
This recommendation is in place and regulated in Article 35 of the
Regulations of the Board concerning hypothetical relevant transactions
that may occur between major shareholders, after a report by the
Appointments and Remuneration Commission.
18 Communication with shareholders
“That measures are taken to make mechanisms for delegating votes
more transparent and to reinforce communications between the company
and its shareholders, particularly with institutional investors”.
As established in Article 25.1. of the Statutes, the Board of Directors
may demand that in the convening of the General Shareholders’
Meeting the company is in possession of the delegation of representation
by shareholders at least two days before the day on which the
General Shareholders’ Meeting is to be held, specifically indicating the
name of the corresponding representative.
This representation must be assigned in writing for each General
Shareholders’ Meeting within the terms established by Company Law.
Since the company IPO there have been many contacts with institutional
investors and shareholders. Sol Meliá, S.A. is very active regarding
providing information for investors and carries out a minimum of one or
two roadshows per quarter to provide information on company activities
and performance. In parallel, further roadshows are held whenever any
important event requires the supply of information.
The company has also held meetings and maintained other forms of
contact with shareholders in Spain and other countries.
The principal executives of Grupo Sol Meliá, S.A. have attended roadshows
in cities such as London, Paris, Frankfurt, Edinburgh, Milan, Geneva,
Cologne, Dublin, Brussels, Amsterdam, Eindhoven, Madrid, Barcelona
and Zaragoza, amongst others, visiting existing and potential investors.
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Amongst the numerous visits to investors, shareholders and analysts, the
following are highlighted:
• Information roadshows on company results
• Information roadshows on the Tryp acquisition
• Information roadshows on the bond issue by one of the subsidiaries
All of the activities described in this section are carried out in observance
of the regulations of the stock market and after providing, if required,
the corresponding reports to the Spanish Stock Exchange Commission
(CNMV) for publishing.
In addition, during the Extraordinary General Shareholders’ Meeting of
23rd. October, 2000 the company made a series of changes to the
Statutes, introducing the possibility, on request by the Chairman, of
requesting from intermediary bodies the identities of the shareholders of
Sol Meliá.
This measure aimed to reaffirm the mechanisms in place for transparency
within the company and put in place controls that would clarify
the evolution of the shareholder structure.
Sol Meliá has also recently launched an “Investors Club” to provide
regular financial information to those shareholders that request such
information, as well as other benefits including an investors “Hotline”.
19 General information
“That the Board of Directors, over and above the requirements of
existing legislation, should assume responsibility for providing the
markets with rapid, precise and reliable information, particularly
regarding the shareholder structure, substantial modifications to the
rules of governance, particularly relevant deals or operations and
company shareholdings”.
As indicated in Article 38 of the Regulations of the Board , the company
has provided information considered to be of sufficient detail and
through the appropriate channels (Statements to CMNV, regular
published information, communications regarding majority shareholders,
other communications, etc.), on matters regarding the share price
and any other matter considered relevant, as well as regular information
on the company rules of governance.
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20 Financial information
“That all of the regular financial information as web as the annual
information offered to the markets is generated using the same professional
principles and practises as the annual accounts and that, before
being published, are verified by the Audit Commission”.
Amongst their duties, the Board of Directors, along with the Audit and
Compliance Commission are entrusted with the duty of providing
financial information to the markets following the same professional
principles, criteria and practises as those employed in the production of
the annual accounts.
Financial analysts have also been kept informed through conference calls on
quarterly results after their presentation and registration with the CNMV.
21 External Auditors
“That the Board of Directors and the Audit Commission supervise
situations that may present a risk to the independence of the company’s
external auditors and, specifically, that they verify the amounts paid to
external auditors as a percentage of the total revenues of the auditing
firm, and that they make public information on fees paid for services
other than audits”.
The Board of Directors and Audit and Compliance Commission have
made an analysis of the possible risks regarding the independence of
external auditors.
That total amount paid to the external auditor Ernst & Young reached
105,761,085 pesetas for auditing and consulting services. This amount is
equivalent to 0.7 % of the total revenues of the firm in Spain.
In addition, the company has paid out a total of 11,800,000 Pesetas to
Arthur Andersen and 370,019 Pesetas to KPMG in consultancy fees.
22 Production of the Annual Accounts.
“That the Board of Directors should avoid presenting accounts to the
General Shareholders’ Meeting that contain exceptions and reservations
in the auditors’ report, and that, whenever this is not possible,
both the Board of directors and the auditors must clearly explain to shareholders
and to the market the content and scope of the discrepancies”.
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This recommendation is included in article 39 of the Regulations of the
Board, and it is being accomplished by the Company.
23 Information on Governance rules.
“That the Board of Directors include in their Annual Report information
on their Governance rules, providing explanations for any that do
not comply with the recommendations contained within this Code”.
This report aims to clearly and precisely reflect the degree to which the
recommendations of the Code of Good Governance has been implemented
in the company, and particularly in regard to the obligations,
duties and procedures followed by the Sol Meliá, S.A. Board of
Directors so as to comply with said recommendations.
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OFFICIAL COMMUNIQUÉS
tThe following is a summary of the different communiqués sent by Sol
Meliá to the Comisión Nacional del Mercado de Valores (Spanish Stock
Exchange Commission) during the year 2000:
28th. February
With reference number 20990, Sol Meliá announced results for the second
half of 1999.
16th. May
With reference number 22214, the company sent an advance of results for
the first quarter of 2000.
22nd. May
With reference number 22319, the Board announced the celebration of the
Ordinary and Extraordinary General Shareholders’ Meeting for 29th. May.
29th. May
With reference number 22542, the company sent information on the
matters agreed at the Ordinary General Shareholders’ Meeting held the
same day.
1st. June
With reference number 22639, Sol Meliá announced the acquisition of
90% of the capital of the company Azafata S.A.
21st. June
With reference number 22939, Sol Meliá announced the entry of the Banco
Santander Central Hispano (BSCH) in Prodigios, a project to create a generalist
portal site aimed at Spanish and Portuguese speaking families.
4th. July
With reference number 23493, the company provided information on
the liquidation of warrants by Hoteles Mallorquines Agrupados S.A.,
Hoteles Mallorquines Asociados S.A. and Hoteles Mallorquines
Consolidados S.A.
21st. July
With reference number 2319, Sol Meliá announced results for the first half
of the year 2000.
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OFFICIAL COMMUNIQUÉS
25th. July
With reference number 23940, Sol Meliá responded to news that had
appeared in the press concerning a possible alliance with the UK-based
hotel group Hilton International.
31st. July
With reference number 24064, Sol Meliá announced the signature of a
Letter of Intent regarding the negotiation of the acquisition of the hotel
chain owned by Tryp S.A.
21st. August
With reference number 24279, Sol Meliá and Tryp S.A. announced the
signature of the final agreement by which Sol Meliá integrated all of the
shares in Tryp S.A. for 60,000 million pesetas and the creation of one
position on the Board for ex-shareholders.
22nd. August
With reference number 24355, Sol Meliá provided information on the
financial repercussion of the acquisition of Tryp S.A. on company
accounts.
26th. September
With reference number 24912, Sol Meliá announced the celebration of
the Extraordinary General Shareholders’ Meeting for the 23rd. and
24th. October.
4th. October
With reference number 25072, the company provided information on
the attendance conditions for the mentioned Meeting.
17th. October
With reference number 25235, Sol Meliá announced approval of a new
variable bonus system for management, not including Board members,
to be applied for 2000.
23rd. October
With reference number 25331, the company informed that the
Extraordinary General Shareholders’ Meeting had approved a capital
increase to allow the shareholding agreed with Tryp S.A.
17th. November
With reference number 25637, Sol Meliá provided information on
results for the third quarter of 2000.
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CONSOLIDATED ASSETS
In thousands of Pesetas.
A. UNCALLED SHARE CAPITAL
31/12/1998 31/12/1999 31/12/2000
B. FIXED ASSETS
I. START-UP EXPENSES 1,524,980 3,486,086 3,473,216
II. INTANGIBLE FIXED ASSETS
1. Intangible assets and rights 1,156,783 37,219,295 54,739,424
2. Provisions and amortization (170,480) (2,358,929) (4,283,168)
III. TANGIBLE FIXED ASSETS
1. Land and buildings 1,250,909 225,809,503 277,877,304
2.Technical installations and machinery 286,847 22,325,498 30,227,956
3.Other fixed assets 786,718 43,354,676 50,447,938
4.Prepayments and tangible fixed assets in progress 3,567 4,624,763 3,905,221
5.Provisions and depreciation (631,087) (68,541,373) (87,373,658)
IV. INVESTMENTS
1.Participations by equity method 13,190,153 2,943,132 3,586,697
2.Loans to subsidiaries 4,999,817 2,428,594
3.Long-term securities portfolio 22,353,409 16,343,600 18,320,265
4.Other long-term receivables 1,768,320 7,248,697 7,438,278
5. Provisions (1,364,325) (293,925)
V. OWN SHARES
TOTAL FIXED ASSETS 41,520,118 296,090,439 360,494,142
C. GOODWILL ON CONSOLIDATION
1. From companies consolidated under full consolidation 1,881,494 2,557,898 65,624,776
2. From companies consolidated by equity method 361,835 233,211 329,030
TOTAL GOODWILL ON CONSOLIDATION 2,243,329 2,791,108 65,953,806
D. DEFERRED EXPENSES 2,550,355 3,631,264
E. CURRENT ASSETS
II. INVENTORIES 21,262 4,232,986 5,992,508
III. DEBTORS
1.Trade debtors 5,129,569 13,084,251 17,889,520
2. Subsidiaries 80,114 110,716 1,542,070
3. Other debtors 962,401 5,637,280 15,360,579
4. Provisions (379,497) (1,831,996) (3,618,776)
IV. SHORT-TERM INVESTMENTS
1. Short-term securities portfolio 8,408 3,550,310
2. Loans to subsidiaries 10,278,821 30,196
3. Other loans 127,677 2,743,622 3,700,803
4. Provisions (31,512)
V. OWN SHARES 704,550 1,123,106 1,802,468
VI. CASH AND BANKS 4,008,228 10,425,394 12,376,399
VII. PREPAYMENTS AND ACCRUALS 175,358 607,774 1,322,386
TOTAL CURRENT ASSETS 10,829,662 46,388,849 59,948,463
TOTAL ASSETS 54,593,109 347,820,752 490,027,675
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CONSOLIDATED LIABILITIES
In thousands of Pesetas
31/12/1998 31/12/1999 31/12/2000
A. EQUITY
I. SHARE CAPITAL 3,100,000 5,708,859 6,148,854
II. SHARE PREMIUM 33,095,450 100,418,656 132,298,900
III. REVALUATION RESERVE R.D.L. 7/96 8,032,947 8,032,947
IV. RESERVES
1. Distributable reserves 1,693 709,003 5,092,764
2. Reserve investments Canary Islands Law 19/94 951,121 2,033,319 3,265,127
3. Reserves in Cies. consolidated under full consolidation 4,623,663 26,064,671 38,184,435
4. Reserves in Cies. consolidated by equity method 339,506 392,171 364,978
5.Non-distributable reserves 1,101,089 1,837,935 2,953,870
6.Results from prior years 16,577 16,577
VII. FOREIGN CURRENCY GAINS/(LOSSES)
1. From Cies. consolidated under full consolidation (290,189) 6,378,310 9,865,367
2. From Cies. consolidated by equity method (610,117) (18,963) (3,475)
VIII. PROFIT AND LOSSES FROM PARENT COMPANY 6,915,775 14,643,755 18,745,790
1.Consolidated profit and losses 6,986,150 15,667,956 19,738,432
2.Profit and losses attributed to minority interests (70,375) (1,024,201) (992,642)
IX. INTERIM DIVIDEND PAID IN PREVIOUS YEAR (1,240,000)
TOTAL EQUITY 48,004,568 166,217,239 224,949,555
B. MINORITY SHAREHOLDERS 123,935 7,250,035 9,799,570
C. NEGATIVE CONSOLIDATION DIFFERENCE
1. From companies consolidated under full consolidation 238,091 2,520,938 3,716,226
2. From companies consolidated by equity method 32,633
TOTAL NEGATIVE CONSOLIDATION DIFFERENCE 238,091 2,520,938 3,748,859
D. DEFERRED INCOME
1.Capital grants 3,000 580,767 605,237
2. Other deferred income 252,775 2,653,662 3,083,803
TOTAL DEFERRED INCOME 255,775 3,234,429 3,689,040
E. PROVISIONS FOR LIABILITIES AND CHARGES 58,506 8,845,618 9,437,013
F. LONG-TERM LIABILITIES
I. Issue of debentures and other marketable securities 33,511,454 68,588,250
II. Debts with credit institutions 45,261 67,398,408 101,142,984
III. Debts with subsidiaries 115,996 66,284
IV. Other liabilities 335,251 12,798,810 13,498,739
TOTAL LONG-TERM LIABILITIES 496,508 113,774,956 183,229,973
G. SHORT-TERM LIABILITIES
I. Issue of debentures and other marketable securities 97,552 98,464
II. Debts with credit institutions 2,423,780 25,562,513 24,805,414
III. Debts with subsidiaries 571,969 7,432 779,993
IV.Trade creditors 867,735 11,797,816 19,473,781
V. Other non-trade debts 1,532,685 7,746,211 8,242,457
VI.Trade provisions 19,556 4,074 695,596
VII. Accrued expenses 761,938 1,077,958
TOTAL SHORT-TERM LIABILITIES 5,415,725 45,977,538 55,173,664
TOTAL LIABILITIES 54,593,109 347,820,752 490,027,675
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CONSOLIDATED PROFIT AND LOSS ACCOUNT
In thousands of Pesetas
A. EXPENSES
31/12/1998 31/12/1999 31/12/2000
1. Supplies and other external expenses 29,526 14,282,829 19,299,455
2. Personnel expenses
a) Salaries, wages and related expenses 2,198,493 25,844,228 34,321,572
b) Social Security 634,377 8,837,938 11,001,002
3. Fixed assets depreciation charges 804,121 10,379,850 13,984,526
4. Changes in trade provisions 284,350 239,348 614,507
5. Other operating expenses 4,341,869 27,281,303 39,782,444
I. OPERATING PROFIT 7,457,260 22,718,797 29,395,648
6. Financial expenses 90,158 4,883,404 9,415,580
7. Changes in provisions for decline in value of investments 31,512 (14,534)
8. Foreign currency losses 260,007 5,452,105 6,986,389
II. FINANCIAL PROFIT 106,916 - -
9. Amortization of consolidation goodwill 231,119 304,151 443,670
III. PROFIT FROM ORDINARY ACTIVITIES 7,912,946 18,394,943 20,601,728
10. Losses arising from sale of fixed assets 497,417 122,713 82,105
11. Changes in fixed asset provisions (47,721) 288,409
12. Extraordinary expenses and losses 349,117 1,401,461
13. Expenses and losses from prior years 851,565 1,513,441
IV. EXTRAORDINARY PROFIT --- 884,574 3,458,069
V. CONSOLIDATED PROFIT BEFORE TAXATION 7,738,464 19,279,517 24,059,797
10. Corporation tax 752,314 3,611,561 4,321,366
VI. CONSOLIDATED RESULT FOR THE YEAR (PROFIT) 6,986,150 15,667,956 19,738,432
11. Result attributed to minority shareholders 70,375 1,024,201 992,642
VII. RESULT FOR THE YEAR ATTRIBUTED TO
PARENT COMPANY (PROFIT) 6,915,775 14,643,755 18,745,790
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CONSOLIDATED PROFIT AND LOSS ACCOUNT
In thousands of Pesetas
B. INCOME
31/12/1998 31/12/1999 31/12/2000
1.Turnover net 11,207,266 104,565,401 140,965,519
2. Other operating income 4,542,730 5,018,891 7,433,635
I. OPERATING LOSSES - - -
3. Income from share capital investments 62,578 572,395 180,219
4. Other financial income 156,093 418,435 758,570
5. Foreign currency gains 238,410 5,195,239 6,939,857
II. FINANCIAL LOSSES --- 4,180,951 8,508,789
6. Particip. in profits from companies consolidated
by equity method 579,889 161,248 158,539
III. LOSSES FROM ORDINARY ACTIVITIES - -
7. Profit on disposal of fixed assets 7,637 251,500 3,302,602
9. Capital grants transferred to results for the year 500 22,293 24,228
10. Extraordinary income or profits 314,798 1,656,394 3,297,366
11. Income or profit from previous years 230,062 119,288
IV. EXTRAORDINARY LOSSES 174,482 - -
V. CONSOLIDATED LOSSES BEFORE TAXATION - - -
VI. CONSOLIDATED RESULT FOR THE YEAR (LOSSES - - -
VII. RESULT FOR THE YEAR ATTRIBUTED TO
PARENT COMPANY (LOSSES) - - -
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1 Group Activities
The parent company, SOL MELIA, S.A., was formed in Madrid on June 24, 1986 with the name Investman, S.A. In
February 1996 the Company modified its official name, becoming SOL MELIA, S.A., inscribed in the Mercantile Registry
of the Balearic Islands, volume 1335 of the Companies Book, folio nº PM 22603, third inscription, with its registered
address in Calle Gremio Toneleros, 24 of Palma de Mallorca.
The activities of SOL MELIA, S.A and its subsidiaries (hereinafter “SOL MELIA” or the “Group”) basically consist of
tourism in general and, specifically, in the management and operation of owned or rented hotels under management or
franchise agreement. The activities also consist in the promotion of any type of business related to the tourist and hotel
trade or related to leisure, recreation or amusement as well as in the participation in the creation, development and operation
of new business, establishments or entities within the tourist and hotel trade and in any leisure, recreation or amusement
activity. Some GROUP companies also carry out real estate activities, taking advantage of the synergies obtained
from hotels development due to the great expansion process. These activities are carried out in Germany, Andorra,
Argentina, Belgium, Brazil, Colombia, Costa Rica, Croatia, Cuba, Egypt, Spain, France, Greece, Guatemala, Indonesia,
Italy, Malaysia, Morocco, Mexico, Panama, Peru, Portugal, Puerto Rico, United Kingdom, Dominican Republic, Thailand,
Tunisia, Turkey, Uruguay, Venezuela and Vietnam.
Public Offering of Acquisition of shares
of Meliá Inversiones Americanas
During July 2000, Hoteles Mallorquines Agrupados, S.L., Hoteles Mallorquines Asociados, S.L., and Hoteles
Mallorquines Consolidados, S.A. paid the related warrants. The corresponding price was 6.02 euros per share and the total
amount of the transaction was Ptas. 4,845 million, which did not affect Sol Meliá, S.A.
Integration of the Tryp Hotel Chain
On December 1, 2000, Sol Meliá S.A. formalised the acquisition of all the shares of the Tryp Hotel Chain, thereby concluding
the agreement reached in August. With this acquisition 60 operating hotels are incorporated, with more than 9,700
rooms, in addition to 15 establishments with signed agreements, thus strengthening Sol Meliá’s leadership in the Spanish
hotel sector and extending its presence in Tunisia, Andorra, Cuba and Portugal.
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2 Consolidation Scope
2.1 Subsidiaries
The subsidiaries defined as the companies in which Sol Meliá, S.A. directly or indirectly holds more than 50% or a controlling
position is exercised, are listed below:
COMPANY ADDRESS COUNTRY ACTIVITY DIR P. IND P. TOTAL HOLDER IND. PART
AKUNTRA s. XXI S.L. Ronda de Sant Pere 17, Barcelona Spain Holding 100.00% 100.00% TRYP, S.A.
APARTOTEL, S.A Orense 81 (Madrid) Spain Managing company 99.73% 99.73%
AZAFATA, S.A. Autopista Aeropuerto S/N (Valencia) Spain Ownership and operating Azafata 100.00% 100.00%
BEAR SA de CV Paseo de la Reforma,1 (México) Mexico Owns and operates Mexico Reforma 100.00% 100.00%
BISOL VALLARTA SA DE CV Paseo de la Marina Sur (Puerto Vallarta) Mexico Hotels ownership and operating 95.22% CALA FORMENTOR S.A. DE C.V.
2.99% 98.21% MELIÁ INV. AMERICANAS N.V.
CADLO FRANCE, S.A. Rue de Caumartin 28 (Paris) France Managing company 100.00% 100.00% SOL MELIA FRANCE
CADSTAR FRANCE S.A. Rue Caumartin 28 (Paris) France Managing company 100.00% 100.00% SOL MELIA FRANCE
CALA FORMENTOR SA DE CV Boulevard Kukulkan (Cancún) Mexico Owns and operates Meliá Cancún 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
CARIBOTELS DE MEXICO S.A Playa Santa Pilar, Aptdo 9 (Cozumel) Mexico Owns and oper. Cozumel & Cabañas 17.98%
5.93% OPERADORA MESOL S.A.
26.60% 50.51% MELIA INV. AMERICANAS N.V.
CASINO PARADISUS S.A Playas de Bavaro (Higuey) Dom. Rep. Casino operating 50.00% 49.10% INVERSIONES AGARA S.A.
CASINO TAMARINDOS, S.A Retama, 3 (Las Palmas) Spain Casino owner 99.50% 0.50% 100.00% MESOL MANAGEMENT S.L.
COM.PROP.SOL Y NIEVE Plaza del Prado Llano (Sierra Nevada) Spain Owns and oper.Meliá Sol y Nieve 87.84% 87.84%
COMP.TUNISIENNE GEST.HOT Cite Mahrajene-Imm Chiaaar, 1 (Tunis) Tunisia Managing company 0.10% 79.70% SOL MANINVEST B.V.
10.00% M.I.H. S.A.
0.10% MARKSERV B.V.
10.00% SOL MELIÁ INVESTMENT N.V.
0.10% 100.00% MESOL MANAGEMENT B.V.
CONS.INMOB.ALCANO S.A Ctra. Málaga Km 437 (Granada) Spain Owner of Sol Inn Alcano 100.00% 100.00%
CONSORCIO EUROPEO, S.A. Darro 22, (Madrid) Spain Owner of Hotel Tryp Colon 100.00% 100.00% TRYP, S.A.
CONT.TUR. COZUMEL, S.A. Playa Santa Pilar, Aptdo 9 (Cozumel) Mexico Owner of Caribotels México 23.91% OPERADORA MESOL
27.09% 51.00% MELIA INV. AMERICANAS N.V.
CORBEIL HOT. PARIS COLOM. Rue Caumartin 28 (Paris) France Owns and oper. Hotels in France 100.00% 100.00% CADSTAR FRANCE, S.A.
CORP. HOT. HISP. MEX. Boulevard Kukulkan (Cancún) Mexico Owns and operates Turquesa 9.08% CALA FORMENTOR S.A. DE C.V.
89.13% 98.21% MELIÁ INV. AMERICANAS N.V.
DARCUO S. XXI S.L. Ronda de Sant Pere 17, Barcelona Spain Holding 100.00% 100.00% TRYP, S.A.
DES TURIST DEL CARIBE SA De Ruyterkade, 62 (Curaçao) Panama Marketing 98.21% 98.21% DES.TUR.DEL CARIBE N.V
DES.HOT.SAN JUAN B.V Strawinskylaan, 307 (Amsterdam) Holland 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
DES.TUR.DEL CARIBE N.V De Ruyterkade, 62 (Curaçao) Neth. Antilles Holding 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
DESARROLLOS SOL S.A Lope de Vega, 4 (Santo Domingo) Dom. Rep. Holding 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
DOCK TELEMARKETING,S.A Orense 81 (Madrid) Spain Sales offices 95.09% 4.91% 100.00% MESOL MANAGEMENT S.L.
DOMINICAN INVESTMENT NV The Ruyterkade, 62 (Curaçao) Neth. Antilles Holding 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
DOMINICAN MARKTING SERV De Ruyterkade, 62 (Curaçao) Neth. Antilles Marketing 98.21% 98.21% GESMESOL, S.A
DORPAN, S.L Gremio Toneleros, 42 (Palma de Mallorca) Spain Trademarks owner 99.99% 0.01% 100.00% MESOL MANAGEMENT S.L.
FARANDOLE B.V World Trade Center-Toer 17b (Amsterdam) Holland Holding 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
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CONSOLIDATION SCOPE
COMPANY ADDRESS COUNTRY ACTIVITY DIR P. IND P. TOTAL HOLDER IND. PART
GESMESOL, S.A Elvira Méndez, 10 (Panamá) Panama Managing company 100.00% 100.00%
GEST.HOT.TURISTICA MESOL Gremio Toneleros, 42 (Palma de Mallorca) Spain Export to Cuba 100.00% 100.00%
GRUPO SOL ASIA LTD 1109/10 Admiralty Centre Tower Hong Kong Holding 60.00% 60.00%
GRUPO SOL SERVICES 80, Raffles Place, 25-01 UOB Plaza Singapore Services 60.00% 60.00% GRUPO SOL ASIA LTD
H MEL INTERN COLOMBIA SA Calle, 68 (Bogotá) Colombia Managing company 100.00% 100.00% M.I.H. S.A.
HOSTERIAS DE CASTILLA La Pesca, 5 (Salamanca) Spain Inactive 100.00% 100.00%
HOT.SOL INTERNACIONAL Edificio Banco do Brasil (Panamá) Panama Holding 100.00% 100.00%
HOTEL ABBAYE THELEME S.A. Rue Ville de Saxe 9 (Paris) France Operating Hotel Saxe 100.00% 100.00% CORBEIL HOT. PARIS COLOMBRES
HOTEL ALEXANDER S.A. Avenue Víctor Hugo 102 (Paris) France Operating Hotel Alexander 100.00% 100.00% LONDIM FRANCE S.A.
HOTEL BELLVER S.A Av Ingeniero Gabriel Roca (Palma de Mca.)Spain Owner Hotel Bellver 66.95% 66.95%
HOTEL BLANCHE FONTAINE S.A. Rue Fontaine 34 (Paris) France Oper. Colbert and Blanche Fontaine 100.00% 100.00% CORBEIL HOT. PARIS COLOMBRES
HOTEL BOULOGNE ADAGIO S.A. Rue des Abundances 22 (Paris) France Operates Hotel Adagio 100.00% 100.00% LSO FRANCE INVESTMENTS S.A.
HOT. CONVENTO DE EXTR. S.A. Plaza de San Juan 11-13 (Cáceres) Spain Owner of Extremadura Convent 51.32% 51.32%
HOTEL FRANCOIS S.A. Boulevard MontMartre 3 (Paris) France Operating Hotel Francois 100.00% 100.00% CADSTAR FRANCE, S.A.
HOTEL MADELEINE PALACE Rue Cambon 8 (Paris) France Operating Madeleine Palace 100.00% 100.00% CADLO FRANCE S.A.
HOTEL METROPOLITAN S.A. Rue Cambon 8 (Paris) France Owns and oper. Madeleine Palace 100.00% 100.00% CADLO FRANCE S.A.
HOTEL ROYAL ALMA Rue Jan de Goujon 35 (Paris) France Operates hotel Royal Alma 100.00% 100.00% CADSTAR FRANCE, S.A.
HOTELES MELIA, S.L. Gremio Toneleros 24, (Palma de Mallorca) Spain Inactive 100.00% 100.00%
HOTELES SOL MELIA. S.L. Gremio Toneleros 24, (Palma de Mallorca) Spain Inactive 100.00% 100.00%
HOTELES SOL S.L. Gremio Toneleros 24, (Palma de Mallorca) Spain Inactive 100.00% 100.00%
HOTELES TURISTICOS S.A Orense 81 (Madrid) Sapin Owns and oper. Meliá Granada 94.48% 94.48%
IHLA BELA GESTAO E TURISMO 31 de Janeiro 81 Founchal, Madeira Portugal Hotel management in Cuba 65.00% 65.00% TRYP, S.A.
IMPULSE DEVELOPEMENT INCStrawinskylaan, 2001 (Amsterdam) Holland Inactive 100.00% 100.00% HOTELES TURISTICOS S.A
IMPULSE HOT.DEVELOPEMENT Strawinskylaan, 2001 (Amsterdam) Holland Inactive 100.00% 100.00%
INDUSTRIAS TURISTICAS Orense 81 (Madrid) Spain Owns and oper. Meliá Torremolinos 97.58% 97.58%
INMOBILIARIA BULMES, S.A. Darro 22, (Madrid) Spain Owner of hotel Tryp Fénix 100.00% 100.00% TRYP, S.A.
INMOTEL INTERNACIONAL SA Edificio Banco do Brasil (Panamá) Panama Holding 100.00% 100.00%
INMOTEL INV.ITALIA S.R.L Via Pietro Mascagni, 14 (Milano) Italy Owns and operates Meliá Milano 1.00% 99.00% 100.00% MELIÁ EUR. HOLD. DE ENT. S.A.
INV TURIST DEL CARIBE SA Lope de Vega, 4 (Santo Domingo) Dom. Rep. Holding 100.00% 100.00%
INV. LATINOAMERICA 2000 Gremio Toneleros, 24 (Palma de Mallorca) Spain Holding 100.00% 100.00%
INV.EXPLOT.TURISTICAS Orense 81 (Madrid) Spain Hotels owner and operator 55.10% 55.10%
INV.INMOB.IAR 1997 CA Avenida Casanova (Caracas) Venezuela Owns and oper. Caracas 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
INVERSIONES AGARA S.A Lope de Vega, 4 (Santo Domingo) Dom. Rep. Owns and operatesPunta Cana 98.21% 98.21% NEALE S.A.
INVERSIONES CORO S.A Lope de Vega, 4 (Santo Domingo) Dom. Rep. Owns and operates Tropical 98.21% 98.21% DOMINICAN INVESTMENT N.V.
INVERSIONES GUAMA S.A Lope de Vega, 4 (Santo Domingo) Dom. Rep. Owns and operates Caribe 98.21% 98.21% DESARROLLOS SOL S.A.
INVERSIONES INVERMON Av. Venezuela, Edif.T. América (Caracas) Venezuela Inactive 100.00% 100.00% M.I.H. S.A.
INVERSIONES JACUEY, S.A. Lope de Vega, 4 (Santo Domingo) Dom. Rep. Owns and oper. Casino Palma Real 98.21% 98.21% INVERSIONES GUAMA S.A.
IRTON COMPANY N.V. The Ruyterkade, 62 (Curaçao) Neth. Antilles Marketing 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
LATIN AMERICA LOG.CORP 1000, Brickell Av. suite 500 (Miami) U.S.A. Services 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
LAVANDERIAS COMPARTIDAS Paseo Colorado, 26 (Torremolinos) Spain Laundry 100.00% 100.00%
LIRAX ltd Wickham's Cay road town (Tortola) Virgin Is. (U.K.)Holding 100.00% 100.00% SOL MANINVEST B.V.
LOMONDO LTD Albany Street-Regents Park (Londres) U.K. Owns and operatesWhite House 100.00% 100.00%
LONDIM FRANCE S.A. Rue de Caumartin 28 (Paris) France Owns and operates Hotel Alexander 100.00% 100.00% SOL MELIA FRANCE
LSO FRANCE INVESTMENTS S.A.Rue Caumartin 28 (Paris) France Owns and operates Hotel Adagio 100.00% 100.00% SOL MELIA FRANCE
M.I.H., S.A Edificio Fiducidario (Panamá) Panama Holding 100.00% 100.00%
M.I.H. U.K. LTD. Cent House-Upper Woburn Place (Lon) U.K. Holding 100.00% 100.00% M.I.H. S.A.
MARINA INTERNAT. HOLDING Elvira Méndez, 10 (Panamá) Panama Holding 100.00% 100.00% M.I.H. S.A.
MARKSERV B.V Parklaan, 81 (Amsterdam) Holland Management and Holding 51.00% 49.00% 100.00% SOL MANINVEST B.V.
MARKSOL TURIZM Calakli Manavgat (Antalya) Turkey Management 10.00% 90.00% 100.00% MARKSERV B.V.
MARKTUR TURIZM Daire 3, Gençlik Mahallesi (Antalya) Turkey Inactive 100.00% 100.00%
MARMER, S.A Lope de Vega, 4 (Santo Domingo) Dom. Rep. Owns and operates Bávaro 98.21% 98.21% DES.TURÍSTICOS DEL CARIBE S.A.
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COMPANY ADDRESS COUNTRY ACTIVITY DIR P. IND P. TOTAL HOLDER IND. PART
MELIA BRASIL ADMINISTRAC Avenida Cidade Jardim, 1030 (Sao Paulo) Brazil Hotels operations 20.00% LIRAX Ltd
80.00% 100.00% MARKSERV B.V.
MELIA CATERING S.A. Gremiio Toneleros 24, Palma de Mallorca Spain Catering services 100.00% 100.00%
MELIA EUR.HOLD.ENTIDADESGremio Toneleros, 42 (Palma de Mallorca) Spain Holder of foreign securities 90.00% 10.00% 100.00% HOTELES SOL INTNAL. S.A.
MELIA INV.AMERICANAS N.V Strawinskylaan, 2001 (Amsterdam) Holland Holding 80.78% 17.43% 98.21% SOL MELIÁ INVESTMENT N.V.
MELIA MANAGEMENT, S.A Lope de Vega, 4 (Santo Domingo) Dom. Rep. Management 100.00% 100.00% INV TURIST DEL CARIBE SA
MELSOL MANAGEMENT B.V Strawinskylaan, 307 (Amsterdam) Holland Management 100.00% 100.00%
MELSOL PORTUGAL Avenida do Brasil, 43-8 (Lisboa) Portugal Management 80.00% 80.00%
MESOL MANAGEMENT, S.L Avda. Colón, 22 (Puerto de la Cruz) Spain Holding 95.00% 5.00% 100.00% DORPAN S.L.
MOT.GR.RUTAS ESPAÑOLAS Orense 81 (Madrid) Spain Owns and operates Hidalgo 74.54% 74.54%
MOTELES ANDALUCES S.A Orense 81 (Madrid) Spain Owns and operates Caballo Blanco 74.42% 74.42%
NEALE S.A Edificio Arango Orillac (Panamá) Panama Marketing 98.21% 98.21% HOTELES TURISTICOS S.A
OP.PASEO DE LA REFORMA Paseo de la Reforma,119 (México) Mexico Land owner 98.21% 98.21% FARANDOLE B.V.
OPERADORA COSTARISOL Avenida Central, 8 (San José) Costa Rica Management 100.00% 100.00% M.I.H. S.A.
OPERADORA MESOL SA DE CVBosque de Duraznos 69-b, (México D.F.) Mexico Management 90.00% 10.00% 100.00% MARKSERV B.V.
PARKING INTERNACIONAL, S.A.Darro 22, (Madrid) Spain Owner of parking hotel Fénix 99.00% 99.00% TRYP, S.A.
PARQUE SAN ANTONIO S.A Rey 1, (Puerto de la Cruz) Spain Owns and oper. Parque San Antonio 72.33% 72.33%
PLAYA SALINAS S.A Avenida Marítima, 1 (Santiago del Teide) Spain Land owner 49.00%
47.81% INDUSTRIAS TURISTICAS
1.89% 98.70% HOTELES TURISTICOS, S.A.
PROP. EN ARRIENDO, S.L Gremio Toneleros, 42 (Palma de Mallorca) Spain Inactive 40.00% 60.00% 100.00% CASINO TAMARINDOS S.A.
PUNTA ELENA S.L San José, 33 (Tenerife) Spain Owns and operates Punta Elena 50.00% 50.00%
RANDLESTOP CORP.N.V De Ruyterkade, 62 (Curaçao) Neth. Antilles Holding 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
REALTUR S.A Orense 81 (Madrid) Spain Owner of Meliá Madrid 96.49% 96.49%
SAN JUAN INVESTMENT B.V Strawinskylaan, 307 (Amsterdam) Holland Holding 98.21% 98.21% MELIÁ INV. AMERICANAS N.V.
SECADE s. XXI S.L. Ronda de Sant Pere 17, Barcelona Spain Holding 100.00% 100.00% TRYP, S.A.
SECURISOL S.A Gremio Toneleros, 42 (Palma de Mallorca) Spain Security 100.00% 100.00%
SILVERBAY, S.L. Rafael Salgado 7-5a Izq. (Madrid) Spain Owner of land in Cadiz 100.00% 100.00%
SOL FINANCE N.V De Ruyterkade, 62 (Curaçao) Neth. Antilles Inactive 100.00% 100.00% HOTELES SOL INTNAL. S.A.
SOL GROUP B.V Parklaan, 81 (Amsterdam) Holland Holding 100.00% 100.00%
SOL GROUP CORPORATION 2100, Coral Way, suite 402 (Miami) U.S.A. Services 100.00% 100.00% SOL GROUP B.V
SOL HOTEL U.K. LTD Cent House-Upper Woburn Place (Lon) U.K. Sales office 100.00% 100.00%
SOL MANINVEST B.V Parklaan, 81 (Amsterdam) Holland Management and Holding 100.00% 100.00%
SOL MELIA BENELUX B.V. Rue Blanche 4 (Bruselas) Belgium Owns and oper. Avenue Luis 99.99% 99.99%
SOL MELIA CROACIA Vladimira Nazora, 6 (Rovijn) Croatia Management 100.00% 100.00% SOL MANINVEST B.V.
SOL MELIA EUROPE B.V Strawinskylaan, 307 (Amsterdam) Holland Issuer of convertible bonds 100.00% 100.00%
SOL MELIA FRANCE Rue Caumartin 28 (Paris) France Management of French companies 100.00% 100.00%
SOL MELIA GUATEMALA S.A Primera Avenida, 8-24 (Guatemala) Guatemala Management 99.95% M.I.H. S.A.
0.05% 100.00% MARKSERV B.V.
SOL MELIA INVESMENT, N.V Strawinskylaan, 2001 (Amsterdam) Holland Holding 100.00% 100.00% INV. LATINOÁMERICA 2000 S.L.
SOL MELIA PERU, S.A. Av. Salaberri 2599, San Isidro, Lima Peru Management Meliá Lima 100.00% 100.00%
SOL MELIA SERVICE S.A Rue de Chantemerle (Friburgo) Switzerland Services 100.00% 100.00%
TALON. CINCO NOCHES, S.L Gremio Toneleros, 42 (Palma de Mallorca) Spain Travel agency 99.94% 0.06% 100.00% DORPAN S.L.
TENERIFE SOL S.A Gremio Toneleros, 42 (Palma de Mallorca) Spain Hotels ownership and management 50.00% 50.00%
TORRESOL DES.TURISTICOS Gremio Toneleros, 42 (Palma de Mallorca) Spain Land owner 80.00% 80.00%
TRIBENOL S.L. Alameda de Mazarredo 5 Bilbao-Viscaya Spain Holding 100.00% 100.00%
TRYP MEDITERRANEÉ Hammamet Yasmine 8050,Tunez Tunisia Management of hotels in Tunisia 85.40% 85.40% TRYP, S.A.
TRYP S.A. Mauricio Legendre 16, Madrid Spain Management of hotels in Spain 67.58% 32.42% 100.00% TRIBENOL, S.L.
URME REAL S.L Orense 81 (Madrid) Spain Parking Meliá Madrid 92.80% 92.80% REALTUR S.A.
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CONSOLIDATION SCOPE
The consolidation of these companies has been prepared according to the full consolidation method.
The sole and exclusive authorised activities of Meliá Brasil Administraçao are those which relate to the management of
hotels. In spite of this fact, since the hotels are under joint ownership and are not legally authorised to carry out operating
activities, in view of the local requirements, Meliá Brasil Administraçao had to assume the operating of the hotels in Brazil
on behalf of the joint owners. For this reason, the Company includes only the remuneration from the operation of the
hotels received by the Group and does not include related income and expenses in the consolidated profit and loss account.
Meliá Inversiones Americanas is quoted on the Madrid Stock Exchange.
2.2 Associated companies
The companies associated with the Group, defined as those in which the direct or indirect participation ranges between
20% and 50%, or with a lower participation but with a significant influence over management, are listed below:
COMPANY ADDRESS COUNTRYACTIVITY DIR P. IND P. TOTAL HOLDER IND. PART.
AGOTEL GMBH Josef Haumann Strasse 1 (Bochum) Germany Hotels operating 100.00% 100.00%
APARTHOTEL BOSQUE, S.A Gremio Toneleros 42 (Palma de Mallorca) Spain Owns and oper. H. Sol Bosque 25.00% 25.00%
C.P.COSTA DEL SOL Paseo Marítimo 11 (Torremolinos) Spain Community property owners 0.33% 18.69% 19.02% APARTOTEL S.A.
COM.PROP.MELIA CASTILLA Capitán Haya 43 (Madrid) Spain Community property owners 28.80% 28.80%
HELLENIC HOTEL MANAGEMENT Panepistimiou 40 (Atenas) Greece Managing company 40.00% 40.00%
HOTEL CAMPUS, S.L. Villa Universitaria, Bellaterra C. (Barcelona) Spain Owns and oper. H. Meliá Campus 40.00% 40.00%
INV.TUR.CASAS BELLAS S.A Barrio de Chamberí s/n (Sta. Cruz Tenerife) Spain Land owner 23.75% 23.75%
MELIA MERIDA S.L Moreno de Vargas, 2 (Mérida) Spain Owner Hotel Meliá Mérida 44.14% 44.14%
NEXPROM S.A Avda. del Lido s/n (Torremolinos) Spain Owns and oper. D. Pedro & D. Pablo 14.39% 5.67% 20.06% PROMEDRO
PROMEDRO S.A Avda. del Lido s/n (Torremolinos) Spain Holding 20.00% 20.00%
SOFIA HOTELES S.L. Mariano de los Cobos 1 (Valladolid) Spain Hotels management in Spain 49.01% 49.01% TRYP S.A.
SOL HOTI PORTUGAL HOTELS Avda. da Republica 85 1º Esq. (Lisboa) Portugal Hotels management 45.00% 45.00%
SOL MELIA TRAVEL S.A. Gremio Toneleros 42, (Palma de Mallorca) Spain Travel agency 100.00% 100.00%
VIVA TOURS S.A. Trespanede 29 (Madrid) Spain Touroperator 21.98% 21.98%
Sol Meliá Travel, S.A, has initiated its activity during the year as a travel agency and is presently involved in the development
of tools for sale by Internet. The Company has decided to consolidate this company by the equity method to avoid
distorting the information in the profit and loss account, which is not homogeneous with the other Group companies.
During the current year the share in Agotel GMBH. increased up to 100%. Nevertheless, pending the definitive control of
the company’s management, the financial statements of this company have been consolidated by equity method.
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2.3 Companies excluded from the consolidation scope
There is a group of companies which, although they do meet the aforementioned requirements, are not included in the Group’s
consolidation scope. These companies are listed below:
COMPANY ADDRESS COUNTRY ACTIVITY DIR P. IND P. TOTAL HOLDER IND. PART.
CARIBOOKING & RESERVAT, N.V. De Ruyterkade 62 Curaçao, Antilles Neth.Antilles Inactive 98,21% 98,21% DES.TUR. DEL CARIBE N.V.
CARIBOOKING & RESERVAT, N.V. Guernsey Inactive 98,21% 98,21% DES.TUR. DEL CARIBE N.V.
CORP. HOTELERA METOR Faustino Sánchez Carrión s/n (Lima) Peru Hotels ownership and operations 40,03% MARINA INTERNATIONAL H.
19,61% 59,64% MELIA INV AMERICANAS
DES. HOTELERA DEL NORTE, S. EN C.S.E. C.3 S. Coco Beach 955-I (Río Gde) Puerto Rico Hotels ownership and operations 47,50% SAN JUAN INVESTMENT B.V.
47,50% 95,00% DES. HOTELEROS SAN JUAN B.V.
DETUR PANAMA, S.A. Residencial Espinar, Colon Aptdo 2268 Panama Concessionaire Panama Canal 31,79% 20,00% 51,79% MELIÁ INT HOTELS S.A.
GUPE INMOBILIARIA Estrada da Luz, 90 6ºF, (Lisboa) Portugal Hotels management 99,99% 99,99% TRYP, S.A.
HOTEL LAS AMERICAS, S.A Las Américas 9 (Ciudad de Guatemala) Guatemala Hotels ownership 20,00% 20,00% MARINA INTERNATIONAL H.
HOTEL NET B2B.COM, S.L. Gremio Tejedores 5 (Palma de Mallorca) Spain Portal de Internet wholesaler 24,50% 24,50%
M.I.H. EUROPE & M. Cavendish Square, 6 (London) U.K. Inactive 100,00% 100,00% MELIÁ INT. HOTELS S.A.
MOGAN PROMOC. S.A. de C.V. (Cancún) Mexico Land owner 33,33% 33,33% MARKSERV B.V.
PROM. PYA. BLANCA S.A. de C.V. Pza. San Ángel,15 (Cancún) Mexico Land owner 33,33% 33,33% MARKSERV B.V.
PUNTA CANA RESERVAT., N.V. De Ruyterkade 62 Curaçao, Antillas Neth.Antilles Marketing 98,21% 98,21% RANDELSTOP CORP. N.V.
SOL MELIA SUISSE, S.A. Rue de Messe 8-10 (Geneva) Switzerland Holding 100,00% 100,00%
The Company intends to sell the share in Detur Panamá, S.A., and for this reason the short-term portfolio balance was
reclassified and is not included in this year’s consolidation. Likewise, no provision for decline in value is included since the
Company does not expect that any loss will arise from the transaction.
Corporación Hotelera Metor has initiated the operation of a hotel in Lima during the current year. On the closing date of
the accompanying annual accounts the Company has no standardized balance sheet and profit and loss account available
to include this transaction in the consolidation. The value of the participation is stated at cost (See Note 12.2.)
At the year-end closing the Group has no accounting information available for Hotel Las Américas, S.A., and therefore
the latter is not included in the consolidated annual accounts, despite the fact that it holds 20% share of this company. Its
portoflio is duly provided for.
Desarrolladora Hotelera del Norte, S. en C.S.E., was formed in view of the construction of a hotel complex in Puerto Rico.
The company’s balance sheet includes assets amounting to 9.5 million dollars and current assets of 100.3 million dollars,
resulting from the capital contribution of 39 million dollars and from a loan received to start the hotel development of 70.8
million dollars. The company is not included in the consolidation since activities have not yet begun.
The other companies excluded from the consolidation are either dormant or are being integrated into the Group at
December 31, 2000.
The exclusion of these companies from the consolidation scope has no significant effect on the net equity, financial position
and results of the consolidated companies, their shares being valued at cost in the accounting records.
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2.4 Changes in the consolidation scope
Shares of Meliá Inversiones Americanas were acquired during 2000, so that the participation in the latter at year-end is of
98.21%. This participation increase is also reflected in the increase in the participation in its subsidiaries.
At the end of 1999 the Sol Meliá Group in France acquired companies that own (A) eight hotels. These companies were
not included in the consolidation scope of the 1999 annual accounts and the investment was recorded at cost. In 2000,
after integrating their management, these companies are consolidated under the full consolidation method in the Group’s
financial information.
Shares of Controladora Turística Cozumel, S.A. de C.V. were acquired and in 2000 a participation of 50.51% is held in this
company which, in turn, is the owner of 100% of Caribotels S.A. de C.V., which owns and operates the hotels Paradisus
Cozumel and Sol Cabañas del Caribe.
As explained in Note 1, the companies (B) forming the Tryp S.A. Hotel Chain were acquired and therefore their financial
information is included under the full consolidation method. The participation in Sofía Hoteles S.L., manager of the hotel
Sofía Parquesol, was included by the equity method.
The Group has increased its participation from 8.7% up to 97.23% in Azafata S.A., which owns and operates the hotel
Meliá Confort Azafata, and was consolidated in the current year by the equity method.
In May the Group acquired 40% of Hotel Campus S.L., which owns and operates the hotel Meliá Campus. Therefore it
will be consolidated by the equity method.
Meliá Catering S.A., with a 100% participation of Sol Meliá, was formed to render catering services in view of the company’s
experience in the restaurant trade.
Sol Meliá has also acquired Sol Meliá Benelux, S.A., which owns and operates the Meliá Avenue Louise Boutique, a hotel
in Belgium. The participation is 100% and its financial information is consolidated under the full consolidation method.
The changes that took place in the consolidation scope in 2000 are indicated below:
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ADDITIONS INCREASE OF PARTICIPATION % DISPOSALS
(B) AKUNTRA s. XXI S.L. AGOTEL GMBH LAVADORAS INDUSTRIALES DE
GUADALAJARA (*)
AZAFATA S.A. BISOL VALLARTA S.A. SAFIVIC, S.A. (*)
(A) CADLO FRANCE S.A. CALA FORMENTOR S.A. SERVICIOS CORPORATIVOS MESOL (**)
(A) CADSTAR FRANCE S.A. CASINO PARADISUS S.A. SOL HOLDING CORPORATION (***)
CARIBOTELS DE MEXICO S.A COM PROP MELIA CASTILLA SOL HOTEL MANAG COMPANY (***)
(B) CONSORCIO EUROPEO, S.A. COM PROP MELIA SOL Y NIEVE SOL HOTEL MIAMI BEACH (***)
CONTROLADORA TURISTICA COZUMEL CORP HOT HISPANO MEXICANA
(A) CORBEIL H.P. COLOMBRES
DES HOT SAN JUAN B.V.
(B) DARCUO s. XXI S.L.
DES TUR DEL CARIBE N.V.
(A) HOTEL ABBAYE THELEME S.A.
DES TURISTICOS DEL CARIBE
(A) HOTEL ALEXANDER S.A.
DESARROLLOS SOL
(A) HOTEL BLANCHE FONTAINE S.A.
DOMINICAN INVESTMENT
(A) HOTEL BOULOGNE ADAGIO S.A.
DOMINICAN MARKETING SERV
HOTEL CAMPUS S.L.
FARANDOLE B.V.
(A) HOTEL FRANCOIS S.A.
HOTELES TURISTICOS S.A.
(A) HOTEL MADELEIN PALACE INV INMOBILIARIAS IAR 1997
(A) HOTEL METROPOLITAIN
INV TURISTICAS CASAS BELLAS
(A) HOTEL ROYAL ALMA
INVERSIONES AGARA S.A.
HOTELES MELIA S.L.
INVERSIONES CORO S.A.
HOTELES SOL MELIA S.L.
INVERSIONES GUAMA
HOTELES SOL S.L.
IRTON COMPANY N.V.
(B) IHLA BELA GESTAO E TURISMO
LATINAMERICAN LOGISTIC
(B) INMOBILIARIA BULMES, S.A.
MARMER S.A.
INVERSIONES JACUEY
MELIA INVERSIONES AMERICANAS
(A) LONDIM FRANCE
MOT GRANDES RUTAS ESPAÑOLAS
(A) LSO FRANCE INVESTMENTS S.A.
NEALE, S.A.
MELIA CATERING
NEXPROM S.A.
(B) PARKING INTERNACIONAL, S.A.
OP. PASEO DE LA REFORMA S.A.
PROPIDADES EN ARRIENDO, S.L.
PLAYA SALINAS
(B) SECADE s. XXI S.L.
RANDLESTOP CORP. N.V.
SILVERBAY S.L.
SAN JUAN INVESTMENT
(B) SOFIA HOTELES S.L.
URME REAL S.R.
SOL MELIA BENELUX B.V.
(A) SOL MELIA FRANCE
SOL MELIA PERU
SOL MELIA TRAVEL S.A.
(B) TRIBENOL S.L.
(B) TRYP MEDITERRANEE
(B) TRYP S.A.
(A)
(B)
Companies of the Sol Meliá Group in France
Companies of the Tryp Hotel Chain
(*) Sold companies
(**) Merger with operadora mesol
(***) Dissolved companies
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3 Basis of Presentation of the
Consolidated Annual Accounts
The accompanying consolidated annual accounts consist of the consolidated balance sheet and profit and loss account for the
years 2000 and 1999 and of the consolidated Notes thereto for the year 2000. In addition, the consolidated balance sheet and
profit and loss account, together with the breakdown of some balance sheet and profit and loss data as well as other consolidated
information relating to the year 1998, are also included.
3.1 True and fair view
The consolidated balance sheet and profit and loss account have been prepared from the internal accounting records of the
parent company, Sol Meliá, S.A. and from the accounting records of the other companies included in the consolidation as detailed
above. The figures of the consolidated balance sheet, consolidated profit and loss account and of the Notes to the accounts
are expressed in thousands of pesetas, unless otherwise indicated.
3.2 Comparison of information
The consolidated annual accounts at December 31, 2000 are presented following the structure established in the Spanish
General Chart of Accounts, and also reflect the comparative figures of the two preceding year.
In relation to the consolidation scope, the main changes, which took place in 2000 with respect to the preceding year, are explained in Note 2.
During 1999, Sol Meliá, S.A. has concluded the Public Offering of Acquisition of Shares of MIA and the merger with Inmotel
Inversiones, S.A. and includes in the 2000 balance sheet and profit and loss account the financial statements of the hotels acquired
in France as well as the incorporation of the Tryp Hotel Chain. Given the circumstances indicated above, the balance sheet
and profit and loss account figures for 2000, 1999 and 1998 are not comparable.
3.3 Consolidation principles
The consolidation has been prepared according to the full consolidation method for the subsidiaries in which SOL MELIA,
S.A. holds directly or indirectly more than 50% of the shareholding or exercises a control position. Minority interests in the net
equity and results of the consolidated companies are presented under a separate heading in the consolidated balance sheet liabilities
and in the consolidated profit and loss account, respectively.
The companies with no direct or indirect majority holding by SOL MELIA, S.A. (between 20 and 50%), and those with a lower
participation but in which the Company has significant influence, are presented in the consolidated balance sheet under the
heading of Investments, “Participations consolidated by the equity method” for the book value of the participation. The participation
of these companies in the consolidated results for the year is reflected in the accompanying consolidated profit and loss
account as “Participation in profits of Companies consolidated by the equity method”.
The Group’s “significant influence” relates to participations exceeding 3% in companies that are quoted on the Stock Exchange or where
a significant influence exists with respect to the company’s management in case of companies that are not quoted on the Stock Exchange.
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4 Appropriation of Results
The Board of Directors of each company will propose the appropriation of results to the General Shareholders Meeting.
The parent company, Sol Meliá, S.A., will propose that results be appropriated as follows:
BASIS OF APPROPRIATION
Profit and Loss (Net profit for 2000) 7,996,917
APPROPRIATION
To legal reserve 87.999
To reserves for investments in the Canary Islands 3,265,636
To voluntary reserves 233,478
To dividends 4,409,804
At the General Shareholders’ Meeting, the Board of Directors will propose the distribution of a dividend of Ptas. 23’8660 per
share, excluding own shares, for which a dividend of Ptas. 24’00 per share will be paid.
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5 Accounting Principles
The most significant accounting principles applied in the preparation of the 2000 consolidated annual accounts are as follows:
5.1 Goodwill and negative differences on consolidation
The valuation differences between the investment and the equity, whenever these could not be attributed to specific assets
or liabilities at purchase time are reflected, when first consolidated, under two possible headings:
• Goodwill on consolidation
The differences between the acquisition price of subsidiaries or associated companies (Note 2) and their net book value,
whenever these are not attributable as a higher value of specific fixed assets of the acquired companies, are recorded as
goodwill, which is amortised on a straight-line basis over a 10 year period for those existing at December 31, 1998 and
over 20 years for the differences arising after that date. The reason for amortising over more than 10 years is due to
the fact that this is considered as the period during which the investment will contribute to generate profits for the
Group (See Note 6).
The surplus assigned to specific assets is amortized, when applicable, based on the actual depreciation.
• Negative consolidation differences
The negative consolidation difference is calculated by taking into account the difference between the book value of
the participation, direct or indirect, of the parent company in the subsidiary’s share capital and the value of the proportional
part of the subsidiary’s equity attributable to such participation on the first consolidation date (See Note
7). Negative consolidation differences are recorded under liabilities in the consolidated balance sheet.
5.2 Minority shareholders and results
• Minority shareholders:
This heading in the balance sheet liabilities includes the proportional part of the shareholders’ equity on the first consolidation
date that corresponds to third parties not belonging to the Group (See Note 19).
• Results attributed to minority shareholders
This is the participation in the consolidated profit or losses for the year that corresponds to minority shareholders (See
Note 19).
5.3 Transactions between consolidated companies
Results arising from internal operations within the consolidated group are eliminated, whenever the amount is significant,
and deferred until they are realised with third parties outside the Group.
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ACCOUNTING PRINCIPLES
Credits and debits between the companies included in the consolidation as well as internal income and expenses have been
eliminated in the consolidated annual accounts.
5.4 Uniformity
It has not been necessary to adjust the individual accounts of the Group’s companies to unify them since, in general, the same
uniform internal norms exist and are applied.
The annual accounts year-end closing date for all the consolidated companies is December 31, 2000.
5.5 Conversion of annual accounts of foreign companies
All assets, rights and obligations of the foreign companies included in the consolidation are converted into pesetas by applying
the exchange rate prevailing on December 31, 2000.
The items of the profit and loss account have been converted by applying an appropriate weighted average exchange rate
in view of the volume of the transactions during each period.
The difference between the amount of the foreign companies’ equity, including the balance of the profit and loss account
calculated according to the preceding paragraph, converted at the historical exchange rate, and the net worth resulting from
the conversion of the assets, rights and obligations according to the first paragraph, are recorded as gains or losses, whenever
applicable, in the shareholders’ equity of the consolidated balance sheet under the heading “Foreign currency
gains/(Losses)”, after deducting the part of such difference that corresponds to the minority shareholders recorded in
“Minority shareholders” on the liabilities side of the consolidated balance sheet (See Notes 18.5 and 18.6).
5.6 Start-up expenses
The start-up expenses of the different companies included in the consolidation are valued at cost, net of the corresponding
amortisation which is calculated using the straight-line method over 5 years (See Note 9).
5.7 Intangible fixed assets
Intangible fixed assets relate to sundry software applications and rights derived from financial leasing contracts.
Software applications are valued at cost and are amortised on the straight-line method over a five-year period.
Acquisition goodwill is amortised on the straight-line method over 5 to 20 years.
The cost of the assets acquired by financial leasing contracts does not include financing charges but it does include the value
of the legal revaluation according to Royal Decree Law 7/1996, of June 7th (See Note 11 and 18) and is accounted for in
accordance with the prevailing Spanish General Chart of Accounts.
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ACCOUNTING PRINCIPLES
The amount of the fixed assets revaluation was established by applying, to the purchase or production cost and to the
corresponding annual amortisation charges considered as deductible expenses for fiscal purposes, coefficients in view of the
purchase year of the items and the figures thereby obtained were reduced by 40% to take into account the financing conditions,
in compliance with such rulings.
The annual amortisation/depreciation charge is calculated on the straight-line method over the estimated useful lives of the
different assets, which are as follows:
Buildings
Installations
Machinery
Furniture
Software
Vehicles
30-50 years
8-18 years
8-18 years
10-15 years
5-8 years
6-10 years
5.8 Tangible fixed assets
Tangible fixed assets are stated at acquisition price which includes any additional expenses incurred until the item is put to
use, and increased by the legal revaluations commented on in Note (11). No financing cost is included. In 1996 tangible
fixed assets were revalued in accordance with Royal Decree Law 7/1996 of June 7th, (See Notes 11 and 18).
The amount of the fixed assets revaluation was established by applying, to the purchase or production cost and to the
corresponding annual depreciation charges considered as deductible expenses for fiscal purposes, coefficients in view of the
purchase year of the items and the figures thereby obtained were reduced by 40% to take into account the financing conditions
in compliance with such rulings.
Repairs which do not represent an extension of the useful life and maintenance expenses are charged directly to the profit
and loss account. Costs which prolong or improve the useful life of the asset are capitalised as an increase in their value.
The Group’s tangible fixed assets are depreciated using the straight-line method over the estimated useful life of the assets
which are as follows:
Buildings
Installations
Machinery
Furniture
Software
Vehicles
Other fixed assets
30-50 years
8-18 years
8-18 years
10-15 years
5-8 years
6-10 years
4-8 years
The net book value of tools and fittings corresponds to the value as per stocktakings carried out in the different centres at year end.
The revaluations and capital gains attributable to tangible fixed asset items are depreciated following the same criteria applied
to the revalued and/or affected items.
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ACCOUNTING PRINCIPLES
5.9 Investments
The investments in associated companies have been recorded according to the equity method based on the net book value
which is adjusted, when applicable, by the specific valuation made of their assets and liabilities (See Note 8). Results for
the year obtained by these companies are reflected in the consolidated profit and loss accounts as “Participation in profit
(losses) of companies consolidated by the equity method” (See Note 25).
Unquoted securities are valued at cost of acquisition less the corresponding amortisation when applicable.
Securities, both of fixed and variable interest, included under the Investments and Short-term investments headings are
valued at their acquisition price upon subscription or purchase and include the expenses inherent to each operation.
Non-trade credits are recorded for the amount paid and corrected at year-end, whenever applicable, by the corresponding
provision to cover risks involved due to possible insolvencies. At year-end, provisions are applied to the appropriate concept.
5.10 Deferred expenses
Expenses for fomalisation of debts are valued at cost.
Expenses for deferred interest relate to the difference between the repayment value and the nominal value of the relevant debts.
These expenses are written down over the period of maturity of the corresponding debts and according to a financing plan.
5.11 Non-trade loans
Both short and long-term non-trade loans are shown at repayment value on the assets side of the consolidated balance sheet.
5.12 Inventories (Trade inventories, raw materials and other supplies)
Raw and ancillary materials are valued at their average acquisition cost which is, generally, lower than the realisable value.
The acquisition price includes the amount invoiced plus all additional expenses incurred until the goods are stored in the
warehouse. In the case of real estate inventories, the accounting values include tacit capital gains recorded for consolidation
purposes only (See Note 14).
5.13 Clients
Clients’ balances are reflected in the balance sheet at real value and corrected, whenever applicable, by the corresponding
provision to cover risks involved due to possible insolvencies. Such provisions are applied when the debt is considered as
irrecoverable.
The Group has ceded accounts receivable (factoring) for a total mount of Ptas.5,705 million to the company Compas Sigma.
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ACCOUNTING PRINCIPLES
5.14 Capital grants
Capital grants are not repayable and are recorded for the amount received at the time of the grant as deferred income, which
is released to results using the straight-line method over the useful life of the assets thereby financed (See Note 20).
5.15 Provisions for pensions and similar obligations
Certain Collective Wage Agreements prevailing and applicable in 2000 establish that the permanent staff retiring between
60 and 65 years of age will be entitled to a cash premium equivalent to a number of monthly salaries proportional to the
number of years of service.
During the year an evaluation of these commitments was performed in accordance with the actuarial assumptions contained
in the externalization Regulations, by applying the calculation method known as the “projected unit credit” and the
population assumptions corresponding to the GRM95-GRF95 tables. According to this study, the commitments accrued
at December 31, 2000 in accordance with the Externalization Regulations amount to Ptas. 2,701 million. The provision
for liabilities and charges covers these commitments as well as the commitments acquired with six executives of the company
absorbed in 1999.
5.16 Provisions for liabilities and charges
In addition to the accounting provisions for potential insolvencies (estimated) relating to accounts receivable, the Group
also books long-term provisions in the balance sheet liabilities, estimated according to the principle of prudence and following
conservative criteria, to cover the different risks and contingencies due to the different possible interpretation of the
prevailing fiscal rulings, contingent risks for bank and other guarantees given, legal claims and lawsuits under way and other
possible liabilities arising from operations. At year end, provisions are applied to the respective concepts.
5.17 Non-trade debts
Both short and long-term non-trade debts are recorded at their repayment value. The difference between this value and the
amount received is accounted for under the assets heading “Deferred expenses”, and released to results on a yearly basis
according to a financial criteria (See Note 22).
5.18 Short and long-term classification
The short and long-term classification depends on the expected term of maturity, disposal or cancellation of the Company’s
obligations and rights. A period of more than 12 months as from the year-end closing date is considered long-term.
5.19 Income and expenses
Income and expenses are recorded according to the accruals principle, regardless of when actual payment or collection
occurs (See Note 25).
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ACCOUNTING PRINCIPLES
5.20 Corporation Tax
Corporation Tax is calculated according to the results for the year and taking into account the differences between the
accounting and fiscal results (taxable income) and their “permanent” and “temporary” nature in order to determine the corporation
tax for the year.
Fiscal credits deriving from the carryforward tax losses are recorded for an amount no higher than the deferred taxation
figure accounted for at that date and do not imply, therefore, any cash outlay.
The deferred tax liabilities balance maintained in the balance sheet relates mainly to differences arising from the fiscal treatment
applied to financial leasing contracts and to the deferral of taxation for capital gains from reinvestments.
The eventual deferred taxation which would relate to the revaluation recorded according to Law 29/1991 is not accounted
for since the sale of the revalued buildings is not included in the Company’s corporate purpose.
The tax criteria applied to financial leasing contracts signed after January 1, 1996 consist of applying amortisation rates
which are twice the maximum rates established in the tax charts. The effect of this temporary difference is reflected in the
corporation tax expense (See Note 23).
5.21 Transactions in foreign currency
Debit and credit balances in foreign currency are valued at the exchange rate prevailing on the corresponding transaction
date and are converted at year end at the rate then in force.
Unrealised foreign currency losses are considered as expense of the year in which they are incurred while unrealised foreign
currency gains are considered when arising as deferred income. Nevertheless, if unrealised foreign currency losses were
recorded during the year or in previous years, the unrealised foreign currency gains would be considered income of the
period for the same amount of unrealised foreign currency losses. Remaining unrealised foreign currency gains would be
accounted for as deferred income.
5.22 Severance payments
In accordance with the prevailing labour agreements in some countries where the Group operates, the companies are obliged
to pay severance to employees dismissed without due cause. Given that there is no staff reduction plan, no provision
is deemed necessary for this concept.
5.23 Parent company shares
The own shares held by Sol Meliá, S.A. are valued at the lower of the acquisition or purchase price and the quotation price
at December 31, 2000.
The Options Programmes for executives, establishing their right to purchase up to 200,000 old shares of Sol Meliá, S.A.,
in 1999 (50,000 shares) and in the year 2000 (150,000 shares), have been cancelled during the year.
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ACCOUNTING PRINCIPLES
5.24 Provision for bad debts
The provision for bad debts aims to cover the possible losses that might incur in the full recovery of the accounts receivable.
This provision appears under “Debtors” on the assets side of the consolidated balance sheet. At year end, the provisions
are applied to the respective concepts.
5.25 Subsidiaries and associated companies
In this respect, please see Note 2 where subsidiaries and associated companies are detailed.
5.26 Modifications to the consolidation scope
Modifications to the consolidation scope are identified and explained in Note 2.
5.27 Income from time-sharing
Income from time-sharing is accounted for according to cash criteria, which is more prudent than the sale criteria applied
to the building, whose ceded right of use is equivalent to the useful life.
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6 Goodwill on Consolidation
Goodwill on consolidation and its amortisation are detailed below:
6.1 Companies consolidated by full consolidation method
(Thousands of pesetas)
Balance 12/31/1998 Balance 12/31/1999 Amortisation 2000 Additions Transfers Disposals Balance 12/31/2000
Akuntra XXI S.A. 21 21
Apartotel, S.A. 263,392 227,474 (35,917) 191,557
Azafata, S.A. (16,576) 497,283 480,707
Tamarindos, S.A. 237,804 (37,548) 200,256
Cadlo France, S.A. (12,280) 245,609 233,329
Darcuo XXI S.A. 21 21
Dock Telemarking, S.A. 2,702 2,333 (369) 1,965
Dorpan, S.L. 50,631 43,726 (6,904) 36,822
Grupo Sol Asia Ltd. 40,861 35,288 (5,572) 29,717
Hotel Alexander, S.A. (28,995) 579,900 550,905
H. Boulogne Adagio (20,596) 411,911 391,316
H.C. Extremadura, S.A. 85 85
H.Meliá Internacional de Colombia 2,907 2,510 (396) 2,114
Ihla Bela de Gestao e Turismo, S.A. 42,965 42,965
Inmotel I. Italia, S.R.L. (104) 104
Inversiones Latinoamérica 2.000, S.L. 275
Inversiones Turísticas de Caribe, S.A. 14,117 12,191 (1,925) 10,267
Inversiones y Explotaciones Tur. S.A. 56 56
Lirax 423,282 380,597 (42,684) 337,914
Lomondo Ltd. 671,032 (38,913) 92,949 725,069
Londim France (32,171) 643,417 611,246
M.I.H. U.K. LTD 1,992 1,719 (272) 1,449
Markserv, B.V. 94,451 81,571 (12,880) 68,692
Marksol Turizm 28,255 24.,401 (3,853) 20,551
Melia International Hotels, S.A 118,594 102,421 (16,172) 86,250
Melsol Management B.V. 863 744 (118) 628
Mesol Management, S.L. 733 632 (100) 533
Operadora Mesol, S.A. de C.V. 163,090 140,850 (33,192) 69,364 177,023
Playa Salinas,S.A. 9 9
Secade XXI S.A 21 21
Sevicios Corp. Mesol, S.A. de C.V. 80,316 69,363 (69,364)
Sol Group B.V. 31,324 27,051 (4,272) 22,781
Sol Hotel Miami Beach 3,236 2,794 (2.794)
Sol Hotel U.K. LTD 166,104 143,453 (22,650) 120,803
Sol Maninvest, B.V. 4,543 3,923 (620) 3,304
Sol Meliá Benelux, S.A. (3,128) 250,225 247,097
Sol Meliá Croacia 317,424 283,414 (34,009) 249,404
Sol Meliá France, S.A.S. (5) 101 96
Sol Meliá Perú S.A. 10,596 10,596
Talonario 5 Noches, S.L. 72,400 62,526 (9,873) 52,654(0)
Tribenol, S.L. 18,783,941 18,783,941
Tryp Meditérranée, S.A. 361,447 361,447
Tryp S.A. 41,571,166 41,571,166
TOTAL 1.,881,494 2,557,898 (422,092) 63,491,740 (2.794) 65,624,776
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GOODWILL ON CONSOLIDATION
Additions and disposals arise mainly from the changes introduced in the Group’s consolidation scope, as explained in Note 2.
Sol Meliá has acquired Tryp, S.A.’s shares, with goodwill of Ptas. 60,758 million. The conclusion date of the acquisition
contract was December 1, 2000 when all legal actions agreed upon in the contract were completed. In view of the fiscal
implications to be taken into account for the deductibility of goodwill and in order to be coherent in the application of
accounting policies, both in the parent company and in the consolidation, Sol Meliá’s directors have postponed until next
year, when the companies are expected to merge, the tax treatment of goodwill, and do not question its economic and
accounting efficiency at the present time.
Likewise, tacit surplus existing on the acquisition date of the corresponding share and attributable to land and buildings
was included in fixed assets and inventories. This surplus is amortised over the useful life and the breakdown by company
is as follows:
(Thousands of pesetas)
BALANCE AMORTISATION ADDITIONS DISPOSALS BALANCE
31/12/99 2.000 31/12/00
Apartotel, S.A. 149,860 (3,234) 146,628
Casino Tamarindos, S.A. 446,424 (16,333) 430,092
Consorcio Europeo S.A. 1,773,621 1,773,621
Corbeil H.Paris Colombes, S.A. (73,425) 7,342,504 7,269,079
Desarrollos Sol, S.A. 3,227,646 3,227,646
H. Metropolitan, S.A. (31,277) 3,127,703 3,096,426
Inmobiliaria Bulmes S.A. 5,682,915 5,682,915
LSO France Investiments, S.A. (12,768) 638,413 625,645
Parking Internacional S.A. 7,955 7,955
Playa Salinas, S.A. 1,120,983 593 1,121,577
Realizaciones Turísticas, S.A. 2,147,880 (34,924) (55,297) 2,057,659
Silverbay S.L. 361,492 361,492
Urme Real, S.L. 397,572 (7,782) (13,990) 375,801
TOTAL FIXED ASSETS 7,490,366 (179,744) 18,935,196 (69,286) 26,176,535
Desarrollos Sol, S.A. 1,120,577 (112,269) 1,008,308
TOTAL INVENTORIES 1,120,577 (112,269) 1,008,308
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GOODWILL ON CONSOLIDATION
6.2 Companies consolidated by the equity method
The breakdown of goodwill on consolidation in companies consolidated by the equity method is as follows:
(Thousands of pesetas)
BALANCE BALANCE AMORT. ADDITIONS DISPOSALS BALANCE
31/12/1998 31/12/1999 2000 31/12/2000
Agotel Gmbh 409 409
Aparthotel Bosque, S.A. 86,483 74,690 (11,793) 62,897
Casino Tamarindos, S.A. 275,352
Hotel Campus, S.L. (1,470) 117,600 116,130
Inversiones Turísticas Casas Bellas, S.L. 216 (216)
Meliá Mérida, S.L. 14 14
Touroperador Viva Tours,S.A. 157,895 (8,315) 149,580
TOTAL 361,835 233,211 (21,578) 117,614 (216) 329,030
Additions and disposals arise mainly from the changes introduced in the Group’s consolidation scope, as explained in Note 2.
In like manner, the tacit surplus attributable to tangible fixed assets items existing on the acquisition of these participations
was included as an increase in the value of the participation with the corresponding proportion. This surplus is amortised
over the useful life and the breakdown by company is as follows:
(Thousands of pesetas)
BALANCE AMORT. ADDITIONS DISPOSALS BALANCE
31/12/99 2.000 31/12/00
Aparthotel Bosque, S.A. 2,595 (70) 649 3,174
Hotel las Américas, S.A. 301,711 (301,711)
Nexprom, S.A. 200,587 (5,497) 622 195,712
TOTAL 504,893 (5,567) 1,270 (301,711) 198,886
The effect on the balance sheet is included under “Participations in companies consolidated by the equity method” for the
corresponding participation (See Note 8).
The disposal in Hotel Las Américas, S.A. is due to the departure of this company from the consolidation scope, as indicated
in Note 2.
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7 Negative Consolidation Differences
The negative consolidation differences are listed below:
7.1 Companies consolidated by full consolidation method
(Thousands of pesetas)
BALANCE AMORTISATION ADDITIONS DISPOSALS BALANCE
31/12/99 2000 31/12/00
Bear S.A. De C.V. 2,282,816 2,282,815
C.Tunissienne de G.H. 396 396 396
Controladora Turística Cozumel, S.A. De C.V. 1,201,903 1,201,903
Gesmesol, S.A. 154,466 154,466 154,466
Grupo Sol Services 31,913 31,913 31,913
Impulse Hotel Development 16 16
Inversiones Jacuey 1,919 1,919
Irton Company, S.A. 4 5
Meliá Brasil Adminitraçao, S.A. 27,782 27,782 27,782
Meliá Mérida S.L. 11 (11) 0
Meliá Venezuela S.A. 12,409 12,409 12,409
Melsol Portugal, S.A. 1,611 1,611 1,611
Sol Group Co. 974 974 974
Sol Holding Co. 7,583 7,583 (7.583) 0
Sol Holding Management Co. 958 958 (958) 0
Sol Meliá Benelux, S.A. 18 18
TOTAL 238,091 2,520,938 1,203,839 (8,552) 3,716,226
Additions and disposals arise mainly from the changes introduced in the Group’s consolidation scope, as explained in Note 2.
7.2 Companies consolidated by the equity method
(Thousands of pesetas)
BALANCE 31/12/99 ADDITIONS DISPOSALS BALANCE 31/12/00
Sofía Hoteles S.L. 32,633 32,633
TOTAL 32,633 32,633
The share in the managing company of Hotel Sofía Parque Sol is incorporated as a result of the acquisition of the Tryp
Hotel Chain.
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8 Participations by the Equity Method
The investments corresponding to participations in associated companies have been valued in accordance with the equity
method of consolidation. The amounts obtained by the equity method are as follows:
(Thousands of pesetas)
BALANCE BALANCE RESULT ADDITIONS DISPOSALS EXCHANGE BALANCE
31/12/98 31/12/99 2000 DIFFERENCE 31/12/00
Agotel Gmbh (269.567) (69.025) 706.096 (269.566) 97.938
Aparthotel Bosque, S.A. 166.854 179.092 14.367 (16.064) 177.395
C.P. Meliá Castilla 311.248 252.734 5.052 (233.729) 335.306
C.P.Meliá Costa del Sol 237.306 238.948 91.948 (70.556) 260.343
Casino Tamaindos, S.A. 1.665.178
Hellenic Hotel Management 28.669 15.131 (18.167) (274) (3.309)
Hotel Campus S.L. (25.028) 82.400 57.372
Hotel Las Américas, S.A. 406.523 383.318 (383.318)
I.Turísticas Casas Bellas, S.L. 1.499.790 (2) 461 (1.617) 1.498.632
Meliá Inversiones Americanas, N.V. 10.678.746
Meliá Mérida, S.L. (2.361) 204.986 202.625
Nexprom/Promedro 346.680 57.088 1.162 404.931
Sofía Hoteles S.L. (11.027) 140.431 129.404
Sol Hoti Portugal Hoteis 6.877 17.916 (1.520) 16.396
Sol Meliá Travel, S.A. (65.218) 329.504 264.287
Touroperador Viva Tours, S.A. 220.574 (65.251) (9.945) 145.378
TOTAL 13.190.153 2.943.132 158.539 1.470.092 (984.795) (274) 3.586.697
Additions and disposals arise mainly from the changes introduced in the Group’s consolidation scope, as explained in Note
2, and from the adjustments arising from the write-off of provisions and dividends made in the consolidation process.
The value of the participations includes tacit surplus relating to buildings not recorded by the subsidiaries. This surplus is
amortised over the useful life of the different buildings it relates to. (See Note 6).
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9 Start-up Expenses
The breakdown of this consolidated balance sheet heading is as follows:
(Thousands of pesetas)
BALANCE BALANCE AMORT. ADDITIONS DISPOSALS CONV. BALANCE
31/12/98 31/12/99 DIF. 31/12/00
Formation expenses 1,952 15,302 (5,840) 22,348 50 31,860
Initial set-up expenses 514,807 1,910,398 (394,681) 438,032 (159,301) 47,020 1,841,480
Other deferred expenses 168,548 625,633 (192,132) 365,764 7,627 806,894
Share capital increase 839,673 934,752 (482,305) 340,536 1 792,982
TOTAL 1,524,980 3,486,086 (1,074,958) 1,166,679 (159,301) 54,698 3,473,216
The additions in “Other deferred expenses” relate mainly to the acquisition of Tryp, S.A.
The additions in “Share capital increase” relate to the share capital increase resulting from the non-monetary contribution
for the acquisition of the Tryp Hotel Chain.
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10 Intangible Fixed Assets
The breakdown of the cost and accumulated amortisation of intangible fixed assets is as follows:
(Thousands of pesetas)
COST BALANCE AT BALANCE AT ADDITIONS TRANSFER DISPOSALS CONV. BALANCE AT
31/12/98 31/12/99 TANG. ASSETS DIF. 31/12/00
Land 273 540,174 3,071 (27,226) (62,431) 453,588
Buildings 81,831 23,011,612 6,233,692 (14,513,742) (207,618) 3,215 14,527,158
Installations 5,431,109 6,285,961 (508,848) 11,208,222
Machinery 602,031 475,607 (82,272) 995,365
Tools 436,005 2,400 (236,933) (903) 200,569
Furniture 5,271,652 2,125,623 (393,001) 7,004,274
Data processing equip. 85,986 381,385 (24,845) 442,526
Vehicles 30,406 10,645 1,989,617 2,030,668
Ind.Prop rights/R+D exp. 897,671 187,361 493,873 (11,993) 669,241
Goodwill 1,257,444 164,341 7,320 1,429,105
Transfer rights 786 12,800,598 (196,177) 12,605,208
Software 177,008 365,517 2,814,907 (7,352) 429 3,173,500
TOTAL COST 1,156,783 37,219,295 18,992,291 (996,652) (278,304) (197,206) 54,739,424
ACCUMULATED BALANCE AT BALANCE AT CHARGE FOR ADDITIONS TRANSFER DISPOSALS DIF. BALANCE AT
AMORTISATION 31/12/98 31/12/99 THE YEAR TANG. ASSETS CONV. 31/12/00
Buildings 17,315 801,991 178,010 45,714 (527,800) (38,253) 439 460,100
Installations 406,181 484,194 1,282 (98,928) 1 792,731
Machinery 43,329 46,528 (15,000) 74,857
Tools and fittings 32,196 700 (938) (230) 31,728
Furniture 479,233 421,015 5,562 (94,144) (1) 811,665
Data processing equip. 28,488 16,982 (9,882) 35,588
Vehicles 2,682 103,026 (1,036) 104,672
Ind.Prop rights/R+D exp. 126,268 234 1,082 455,902 (11,398) 445,821
Goodwill 295,720 159,525 147,465 (5,321) 597,389
Transfer rights 392,772 169,367 (17,236) 544,903
Software 26,897 116,874 100,784 15,811 (1,972) 271 231,768
Provisions 152,000 152,000
TOTAL ACCUM. AMORT. 170,480 2,358,929 1,903,918 672,436 (578,361) (40,455) (33,245) 4,283,168
NET BOOK VALUE 986,303 34,860,366 50,456,255
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INTANGIBLE FIXED ASSETS
There are 1,622 financial leasing contracts pending maturity at December 31, 2000, of which 791 expire between 1 and 2
years, 42 in 3 years, 785 up to 5 years and 4 between 6 and 10 years. The instalments pending payment at December 31,
2000 amount to a total of Ptas. 18,591 million, of which Ptas. 7,245 are short-term and the rest long-term. The total residual
value of the contracts in force amounts to Ptas. 1,086 million (See Note 22).
The main additions recorded during the year relate to sundry repairs and refurbishments carried out by the Group in
various hotels operated by Group companies as well as to the incorporation of software applications for several areas of
the Company, which will permit the integration of the different management areas of the hotels and provide support to
the Group’s growth and globalisation processes. Among them are the front office, selling points, SAP and Internet
applications.
The amount recorded for reclassified transfer rights relates to the leasehold contract of Lomondo Ltd.
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11 Tangible Fixed Assets
The movements of the different headings of tangible fixed assets and the accumulated depreciation during 2000 are as
follows:
(Thousands of pesetas)
COST BALANCE AT BALANCE AT ADDITIONS TRANSFER DISPOSALS EXCHANGE BALANCE AT
31/12/98 31/12/99 FROM INTANGIBLE DIFFERENCES 31/12/00
Land 170,777 59,857,662 14,373,725 27,226 (1,543,871) 1,577,796 74,292,535
Buildings 1,080,132 165,951,840 31,011,689 4,672,573 (8,109,730) 10,058,395 203,584,769
Sub-Total 1,250,909 225,809,503 45,385,414 4,699,799 (9,653,601) 11,636,192 277,877,304
Installations 218,893 17,990,582 6,781,894 626,344 (242,133) (11,570) 25,145,117
Machinery 67,954 4,334,916 1,071,650 (33,276) (290,402) (51) 5,082,837
Sub-Total 286,847 22,325,498 7,853,544 593,068 (532,535) (11,621) 30,227,956
Furniture 237,547 34,570,172 7,486,204 790,706 (7,652,462) 1,248,164 36,442,784
Tools 3,158 480,473 93,178 1,836,083 (19,145) 67,207 2,457,791
Sub-Total 240,705 35,050,645 7,579,382 2,626,789 (7,671,608) 1,315,372 38,900,575
Vehicles 44,600 2,582,419 129,190 (1,989,519) (201,440) 24,310 544,960
Data processing equip. 416,273 3,510,165 760,906 35,943 (315,747) 118,854 4,110,094
Other fixed assets 85,140 2,211,427 5,689,217 241,131 (1,251,358) 1,892 6,892,309
Sub-Total 546,013 8,304,011 6,579,313 (1,712,446) (1,768,545) 145,055 11,547,363
Works in progress 3,567 4,624,763 10,032,979 (5,210,558) (5,619,568) 77,605 3,905,221
TOTAL COST 2,328,041 296,114,438 77,430,632 996,652 (25,245,857) 13,162,603 362,458,420
ACCUMULATED BALANCE AT BALANCE AT CHARGE FOR ADDITIONS TRANSFER DISPOSALS EXCHANGE BALANCE AT
DEPRECIATION 31/12/98 31/12/99 THE YEAR FROM INTANGIBLE DIFFERENCES 31/12/00
Buildings 148,718 39,309,154 4,636,632 4,186,277 (2,371,238) (2,571,274) 1,845,381 45,034,931
Installations 40,816 9,938,422 1,343,647 2,940,391 96,703 (222,370) (1,798) 14,094,995
Machinery 12,174 2,140,819 325,712 354,475 350,471 (182,577) 998 2,989,898
Sub-Total 201,708 51,388,395 6,305,991 7,481,143 (1,924,063) (2,976,221) 1,844,581 62,119,824
Furniture 79,924 13,754,136 2,550,618 3,403,881 2,259,970 (2,839,718) 893,577 20,022,464
Tools and fittings 2,212 7,007 3,520 131,413 3,247 (644) (86) 144,457
Vehicles 28,216 281,789 345,979 81,977 (24,766) (140,821) (554) 377,522
Data processing equip. 241,183 2,252,813 416,201 510,044 80,647 (213,094) 91,551 3,138,162
Other fixed assets 77,844 759,693 1,382,786 177,240 183,327 (1,586,697) (11,551) 1,093,371
Provisions 0 97,540 554 402,228 0 0 21 500,343
Sub-Total 429,379 17,152,978 4,699,657 4,706,784 2,502,425 (4,758,481) 972,958 25,276,320
TOTAL ACCUM. DEP. 631,087 68,541,373 11,005,648 12,187,927 578,361 (7,734,697) 2,817,539 87,373,658
NET VALUE 1,696,954 227,573,065 275,084,761
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TANGIBLE FIXED ASSETS
In case of merger, or non-monetary contributions of activities, in accordance with the norms on formulation of consolidated
annual accounts, the difference between the book value of the participation in the absorbing company and the net book
value of such participation according to the books of the absorbed company may be attributed to the corresponding assets
and up to the limit of their market value. For this reason, Sol Meliá, S.A. has recorded as additions for the year the surplus
recorded in several hotels as a result of the merger with Inmotel Inversiones, S.A.for an amount of Ptas. 5,157 million, of
which Ptas. 2,745 million correspond to Meliá Lebreros, Ptas. 1,748 million to Meliá Sevilla and Ptas. 664 million to Sol
Elite Barbados.
The main tangible fixed assets additions recorded during the year are as follows:
• Incorporation to the consolidated Group of the companies that own the eight hotels acquired in France in November
1999 for a net value of Ptas. 12,681 million.
• Acquisition of the hotels Fénix and Colon for Ptas. 7,749 and 3,343 million, respectively.
• Acquisition of building sites of tourist interest in the Canary Islands, the purchase value of which is of Ptas. 1,050
million in case of execution.
• Incorporation of Azafata, S.A., owner of Hotel Azafata for Ptas. 800 million.
• Incorporation of Caribotels de México, S.A. de C.V., owner of Hotel Paradisus Cozumel for Ptas. 6,800 million.
• Incorporation of Sol Melia Benelux, B.V., owner of Hotel Melia Avenue Louise for Ptas. 1,450 million.
• The main tangible fixed assets disposals recorded during the year are as follows:
• Sale of Hotel Sol Las Olas, located in Corralejo-Fuerteventura, the selling price of which was Ptas. 2,300 million.
• Sale of Hotel Sol Bardinos, located in Gran Canaria-Las Palmas, the selling price of which was Ptas. 1,400 million.
• Sale of Hotel Melia Bavaro, located in Playa Bavaro-Santo Domingo, for 55 million of US-dollars.
The Company is also carrying out important repairs and refurbishments in many of its hotels, which has given rise to
important additions and disposals of tangible fixed assets.
The sales of Hotel Sol Las Olas and Hotel Bardinos are subject to the fulfilment by Sol Meliá, S.A. of certain requirements
which are being processed on the formulation date of these annual accounts. The directors do not expect that any significant
contingencies will arise from this transitory situation.
After the integration of the Tryp Hotel Chain, the Group operates under leasing contracts a total of 67 hotels, of which
5 are five-star hotels with 784 rooms, 36 are four-star hotels with 6,087 rooms, 19 are three-star hotels with 3,680
rooms, 4 are two-star hotels with 212 rooms and 3 are establishments of three-key apartments with 784 apartments. In
addition, leasing contracts are signed for 35 hotels which will be operated in 2001, 2002 and 2003, with an approximate
total of 6,927 rooms.
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TANGIBLE FIXED ASSETS
The net capital gains derived from the revaluations of assets carried out prior to 1997 by having recourse to sundry legal
regulations and voluntary revaluations in order to correct the effects of inflation, are as follows, in thousands of pesetas:
(Thousands of pesetas)
Revaluation Law 76/61 9,210
Revaluation Law 12/73 429,130
Revaluation Budget Law 1979 4,980,884
Revaluation Budget Law 1980 4,800,546
Revaluation Budget Law 1981 719,368
Revaluation Budget Law 1982 4,405,826
Revaluation Law 1983 239,080
Voluntary revaluation prior to 1990 523,432
Revaluation R.D.L. 796 9,718,258
TOTAL REVALUATIONS 25,825,734
Additionally, the balance sheet at December 31, 2000 includes revaluations of land and buildings for a total cost of Ptas.
29,312 million that were recorded as required by Law 29/1991.
Several owned buildings are mortgaged to guarantee various loans.
All the fixed assets investments, both in tangible and intangible fixed assets, relate to buildings and other assets related to
operations.
At December 31, 2000 Sol Meliá has a purchase option right for Hotel Balmoral.
Some Group companies located in countries with high rates of inflation restate their financial statements in order to adjust
the real value of their fixed assets. The accumulated amount included for this reason in the above tangible fixed assets table
is as follows:
(Thousands of pesetas)
1999 2000
Land 9,483,720 13,111,259
Buildings 38,056,030 50,436,937
Furniture 5,170,765 6,357,142
Data processing equip. 193,324 361,499
Vehicles 43,425 57,122
Accumulated depreciation (12,629,775) (16,902,272)
TOTAL 40,317,489 53,421,688
The depreciation charge referred to in the previous paragraph amounted to Ptas. 2,145 million for the current year.
The 1998 figures are not included since the companies that record inflation restatement in their financial statements belong to
Melia Inversiones Americanas, and the latter has been consolidated by the full consolidation method as from 1999 onwards.
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12 Investments
12.1 Loans to subsidiaries
(Thousands of pesetas)
1999 2000
ARESOL CABOS, S.A. de C.V. 1,234,672 1,355,384
CARIBOTELS DE MEXICO S.A. de C.V. 1,554,981
CORPORACION HOTELERA METOR 469,369 116,034
DETUR PANAMÁ 435,217
F.S.P.TURIZM 1,364,270
MOGAN PROMOCIONES 376,525 391,959
MELIÁ MÉRIDA S.L. 130,000
TOTAL 4,999,817 2,428,594
The balance of Ptas. 1,355 million of Aresol Cabos S.A de C.V. relates to a loan granted by Operadora Mesol, S.A. de C.V.
The loan to F.S.P. Turizm has been cancelled during the year.
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INVESTMENTS
12.2 Long-term securities portfolio
The participations by holding company, in thousands of pesetas, are listed below:
(Thousands of pesetas)
INVESTMENTS PARTIC. % BALANCE BALANCE ADDITIONS DISPOSALS CONVERSION BALANCE
31/12/98 31/12/99 DIF. 31/12/00
SOL MELIÁ S.A. 22,158,564 14,163,907 9,155,067
Azafata S.A. 8.70% 45,000 45,000 (45,000)
D.H. Guanacaste 15.00% 1,675,000 1,962,764 140,184 2,102,948
D.I.Guanacaste 15.00% 132,000 132,000 132,000
Edificaciones Gobelas, S.A. 20.00% 255,387
Grupo Inmotel Inversiones 18.85% 16,643,000
Detur Panamá S.A. 31.78% 733,089 (733,089)
H. Sancti Petri 19.50% 195,000 195,000 195,000
Horotel S.A. 12.40% 50,000 50,000 50,000
Hotel Net B2B.com S.A. 24.50% 518,519 518,519
I.H. Los Cabos 15.00% 550,000 550,000 550,000
I.H. Playa del Duque 5.00% 446,282 446,282 446,282
Inmobiliaria Conchal Pacífico 15.00% 46,000 46,000 46,000
Lanzarote 6 S.A. 5.56% 249,912 249,912
Orgesa Holding 14.17% 1,195 1,195 1,195
P.T. Surlaya Internacional 16.52% 1,500,000 1,500,000 1,500,000
Port Cambrils Inv. 15.00% 48,760 48,760
Prodigios Interactivos S.A. 12.84% 3,506,313 (376,604) 3,129,709
Propiedades en Arriendo. S.l. 100.00% 200 200 (200)
Sol Meliá France S.A. 100.00% 8,286,124 (8,286,124)
Sol Meliá Suisse S.A. 100.00% 5,242 5,242
Turismo de Invierno S.A. 19.47% 179,500 179,500 179,500
Tuoroperador Viva Tours, S.A. 21.98% 440,000
Varios u/p 31,511 (31,511)
INEXTUR S.A. 391 391
Oblig. Club Marítimo Marbella u/p 391 391
APARTOTEL S.A. 70,885 70,885
Plaza Puerta del Mar S.A. 7.10% 70,885 70,885
CASINO TAMARINDOS S.A. 50,407 50,107
Obligaciones del Gobierno de Canarias u/p 50,107 50,107
Propiedades en Arriendo 300 (300)
PARQUE SAN ANTONIO S.A. 500 500
Aguas Teide u/p 500 500
TRYP, S.A. 9,129
Gupe Inmobiliaria 99.99% 9,129 9,129
RANDLESTOP CORP, N.V. 994 1,060
Punta Cana Reservations N.V. 100.00% 994 66 1,060
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INVESTMENTS PARTIC. % BALANCE BALANCE ADDITIONS DISPOSALS CONVERSION BALANCE
31/12/98 31/12/99 DIF. 31/12/00
DES. TUR. CARIBE N.V. 994 1,060
Caribooking & Reservations N.V. 100.00% 994 66 1,060
D HOTELEROS SAN JUAN B.V. 3,219,994
Desarrolladora Hot. Del Norte 47.50% 3,219,994 3,219,994
SAN JUAN INVESTMENT B.V. 3,219,994
Desarrolladora Hot. Del Norte 47.50% 3,219,994 3,219,994
MARKSERV B.V. 145 103,262 822,244
Mogan Promociones 33.33% 145 282 282
Promociones Playa Blanca S.A. 33.00% 102,980 717,235 820,215
Sol Meliá Marruecos 100.00% 1,747 1,747
MELIA INV AMERICANAS N.V. 906,465 536,201
Corporación H. Metor 19.97% 536,203 (2) 536,201
Controladora T. Cozumel 51.00% 370,262 (370,262)
OPERADORA MESOL, S.A. DE C.V. 45,217 54,715
Controladora T. Cozumel 51.00% 45,217 54,715 (54,715)
MARMER S.A. 232
Inversiones Guizá 50.00% 232 232
MELIA INTNAL HOTELS S.A. 149,483 339,343 8,325
C.A.H.T. Puerto La Cruz 0.38% 2,524 2,932 195 3,127
Corp. Hotelera Halmel 1.07% 4,197 4,875 324 5,199
Detur Panamá S.A. 20.00% 142,762 331,536 (331,536)
MARINA INTNAL HOLDING 651,737 1,225,074
Corporación H. Metor 40.03% 651,737 43,232 694,969
Hotel Las Américas 20.00% 530,106 530,106
TOTAL 22,353,409 16,343,600 12,162,126 (10,229,341) 43,881 18,320,265
PROVISIONS PARTIC. % BALANCE BALANCE ADDITIONS DISPOSALS CONVERSION BALANCE
31/12/98 31/12/99 DIF. 31/12/00
SOL MELIÁ S.A. (28,873)
Sol Meliá Suisse S.A. 100.00% (58) (58)
Hotel Net B2B.com S.A. 24.50% (28,815) (28,815)
MARINA INTNAL HOLDING (265,053)
Hotel Las Américas 20.00% (265,053) (265,053)
TOTAL (293,926) (293,925)
NET VALUE 22,353,409 16,343,600 11,868,200 (10,229,341) 43,881 18,026,340
U.P.: Unquantified percentage
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Disposals for the year relate to changes in the consolidation scope, as explained in Note 2.
The disposal in the provisions balance appearing in the 1999 balance sheet (Ptas. 1,364 million) relates to the application
of the provision covering the loan granted by Hoteles Sol Internacional, S.A. to F.S.P. Turizm.
The registered address, activity and accounting data of the companies are indicated below, except for those with an insignificant
participation:
(Thousands of pesetas)
NET NET
COMPANY ADDRESS COUNTRY ACTIVITY CAPITAL RESERVES RESULT % BOOK INVESTM.
VALUE VALUE
IBOOKING & RESERV. N.V. De Ruyterkade 62 (Curaçao) DUTCH ANT. Marketing 1,060 100.00% 1,060 1,060
CORP .HOTELERA METOR Faustino Schez. Carrión s/n (Lima) PERU Hotels owner 1,663,271 12,614 (370,437) 60.00% 783,269 1,231,170
DES. HOT. GUANACASTE Central y ocho C 33 (San José) C. RICA Hotel development 9,284,285 4,164,088 (912,560) 15.00% 1,880,372 2,102,948
DES. INM. GUANACASTE Central y ocho C 33 (San José) C. RICA Golf and apart. Dev. 715,745 70,442 15.00% 117,928 132,000
HOROTEL, S.A. Marqués Villanueva del Prado s/n SPAIN Hotels owner 540,000 607,659 143,320 12.40% 160,081 50,000
HOT. SANCTI PETRI, S.A. G.Toneleros 24 (Palma de Mca.) SPAIN Hotels owner 1,000,000 (138,765) (7,226) 19.50% 166,532 195,000
INM. CONCHAL PACIFICO Central y ocho C 33 (San José) C. RICA Land owner 56 270,819 15.00% 40,631 46,000
INV. HOT. LOS CABOS Samuel Lewis C 33 (Panamá) PANAMA Holding 6,657,251 (332,463) 1,299 15.00% 948,913 550,000
INV. HOT. PYA. DEL DUQUE Barrio Chamberrí s/n (Tenerife) SPAIN Hotels owner 432,392 3,194,174 2,310,211 5.00% 296,839 446,282
MOGAN PROMOCIONES Quintana Roo, Cancún MEXICO Hot. in construction 945 (29,346) 33.33% (9,466) 282
ORGESA HOLDING Collomas de Chapultepec MEXICO Hotels owner 6,006 3,540,740 731,285 14.17% 606,197 1,195
P.T.S.A.I. Jalan Taman Patra, XIV (Jakarta) INDONESIA Hotels owner 585,699 1,428,349 (1,271,843) 16.52% 122,612 1,500,000
PLAZA PUERTA DEL MAR S.A. Pza. Puerta del Mar, 3 (Alicante) SPAIN Hotels owner 998,316 (7,317) (76,136) 7.10% 64,955 70,885
PROM. PYA. BLANCA S.A. de C.V. Pza. San Ángel,15 (Cancún) MEXICO Hot. in construction 2,366,199 33.00% 780,846 820,215
PUNTA CANA RESERV. N.V. De Ruyterkade 62 (Curaçao) DUTCH ANT. Marketing 1,060 100.00% 1.,060 1,060
SOL MELIA SUISSE S.A. Rue de Hesse, 8-10 (Ginebra) SWITZERLAND Inactive 10,369 100.00% 10,369 5,184
TURISMO DE INVIERNO Plaza Pradollano s/n (Monachil) SPAIN Hotels owner 114,000 624,485 79,546 19,47% 159,271 179,500
HOTEL NET B2B.COM S.A. Gremio Tejedores, 5 (Palma de Mca.) SPAIN Internet portal B2B 18,181 1,982,819 (117,611) 24.50% 461,430 299,704
PRODIGIOS INTERACTIVOS S.A. ParcBit. Camí ca'n Manuel s/n (Palma) SPAIN Internet portal 94,844 35,826,223 (431,182) 12.84% 4,556,901 3,129,709
PORT CAMBRILS INV. Sin Definir SPAIN Hotels owner n/c n/c n/c 15.00% n/c 48,760
LANZAROTE 6 S.A. Av. Ansite 3-1º (Las Palmas de G.C.) SPAIN Hotels owner n/c n/c n/c 5.56% n/c 249,912
GUPE INMOBILIARIA Estrada da Luz, 90 6º-F (Lisboa) PORTUGAL Hotels management 8,319 99.99% 8,318 9,129
DESARR. DEL NORTE S.enC. S.E. Carr.3,S. Coco Beach 955-I (Rio Grande)P.RICO Owns and oper. hotels 6,901,876 95.00% 6,556,783 6,439,988
HOTEL LAS AMÉRICAS S.A. Las Américas, 9 (Ciudad de Guatemala) GUATEMALA Owns and oper. hotels 805,198 (286,459) (171,667) 20.00% 69,414 265,053
TOTAL LONG-TERM 32,205,072 50,928,062 5,179 17,808,370 17,965,036
DETUR PANAMA S.A. Elvira Méndez, 10 .Bco do Brasil PANAMA Hotels owner 2,473,827 (695,494) 35.00% 622,417 1,227,980
TOTAL SHORT-TERM 2,473,827 (695,494) 622,417 1,227,980
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Sol Meliá, S.A. has subscribed and paid up the capital increase (Ptas. 518 million ) carried out in Hotel Net B2B. COM,
S.A., a company engaged in marketing hotel services.
Sol Meliá, S.A. has subscribed and paid up the share capital increase (Ptas. 249 million.) carried out in Lanzarote 6, S.A.,
owner of land for the construction of a hotel.
Sol Meliá, S.A. has subscribed and paid up the share capital increase (Ptas. 48 million ) carried out in Port Cambrils
Inversions, S.A., a hotel operating company.
Sol Meliá, S.A. has subscribed and paid up the share capital increase (Ptas. 3,129 million) carried out in Prodigios
Interactivos, S.A., a company engaged in developing business through internet.
The increment in Desarrollos Hoteleros Guanacaste is the result of its last share capital increase.
No provision is booked for the participation in P.T.S.A.I., because it maintains its level of activity since most of its income
is earned in dollars. The directors therefore consider that no loss will be incurred.
No provision is booked either for the companies, which present underlying capital gains due to the favourable forecast of
results and to the value of their buildings.
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12.3 Other long-term receivables
(Thousands of pesetas)
1998 1999 2000
AGOTEL 217,246
BANCA DI ROMA 1,031,176
BANCA NAZIONALE DEL LAVORO 1,031,176
CLIENTES TIEMPO COMPARTIDO 1,213,353 1,968,700
GOLDEN ASSET COMPANY LTD. 356,650 414,275 441,755
HOTELES CIBELES S.A. 36,900 45,259
SAUCISSE 546,824
URINCASA S.A. 245,575 245,575
AURELIA CENTRO 267,417
MUNA TURIZM 153,497
HOTELES REX, S.L. 105,838
DAELLOS, S.A. 77,421
I. CAUNEL,GOLF Y H. ARENA GORDA 195,935
OTROS 1,458 39,098 2,375
LONG-TERM LOANS 575,354 2,496,025 5,566,125
SOL MELIA S.A. 2,788,790
HOTELES TURISTICOS S.A. 3,089
MOTELES ANDALUCES S.A. 1,317
TENERIFE SOL S.A. 102,838
DEFERRED TAX ASSETS 2,896,034
SOL MELIA S.A. 100,631 59,847
DESARROLLOS TURISTICOS DEL CARIBE S.A. 165,710
DOCK TELEMARKETING S.A. 100 100
INDUSTRIAS TURISTICAS S.A. 167 167
INVERSIONES Y EXPLOTACIONES TURISTICAS S.A. 210 483
LAV. INDUST.GUADALAJARA 326
MESOL MANAGEMENT S.L. 10,000
MOTELES ANDALUCES S.A. 205 205
TENERIFE SOL S.A. 60
TRYP S.A. 81,542
INMOBILIARIA BULMES S.A. 16,997
AZAFATA S.A. 351
PARKING INTERNACIONAL S.A. 52
H.BOULOGNE ADAGIO 1,954
LONG-TERM GUARANTEE DEPOSITS 277,409 161,699
SOL MELIA S.A. 1,400,460 10,594
C.T.G.H. 597 1,319
HOTELES TURISTICOS S.A. 437 437
LOMONDO LTD. 177,068 174,354
MARKTUR TURIZM 67
TENERIFE SOL S.A. 600 600
GRUPO SOL MELIÁ EN FRANCIA 50,087
IHLA BELA 1,590
TRYP MEDITERRANEE 265,185
INMOTEL INV. ITALIA S.L. 860
MOTELES GRANDES RUTAS ESP. S.A. 41
LONG-TERM DEPOSITS 1,579,229 505,067
BILLS RECEIVABLE 1,205,387
TOTAL OTHER LONG-TERM RECEIVABLES 575,354 7,248,697 7,438,278
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Sol Meliá, S.A is the holder of two bank deposits in Italian Lira for an equivalent in pesetas of 2,061 million, which
guarantee credit transactions of the subsidiary Inmotel Inversiones Italia, S.R.L., in relation to the construction of a
hotel in Milan.
Grupo Sol Asia Ltd. has granted a loan of US-$ 2.5 million to the hotel Sol Twin Towers (Golden Asset Company Ltd.)
which bears interest at the rate of LIBOR plus 2%. Steps are being taken to recover the loan, nevertheless, in case of nonpayment,
this balance would be covered by the provision for liabilities and charges.
The loans granted to Aurelia Centro SRL. for Lira 1.7 million and up to Euros 1.8 million are intended to finance its trading
activities.
The loan to Hotel Cibeles, S.A. bears no interest.
The loan granted to Muna Turizm, AS up to 5 million German Marks is intended to finance its trading activities.
The disposal in the deferred tax assets balance is explained in Note 22.
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13 Deferred Expenses
(Thousands of pesetas)
BALANCE AT ADDITIONS DISPOSALS BALANCE AT
31/12/99 31/12/00
Arrangement of loans 168,255 118,376 (38,237) 248,395
Issue of Convertible bonds 781,564 (168,416) 613,148
Interest on purchase of fixed assets 1,600,536 1,801,709 (632,524) 2,769,721
TOTAL 2,550,355 1,920,085 (839,177) 3,631,264
The interest for purchase of fixed assets relates mainly to leasings for renovation of hotels and for the construction of the
Hotel Meliá Milano.
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14 Inventories
The Group has no firm purchase or sales commitments nor any other limitations affecting inventories.
The main supplier with a turnover figure higher than Ptas. 1,000 million was Carma (Ptas. 3,607 million), a related company.
None of the other suppliers has reached a figure higher than Ptas. 500 million.
(Thousands of pesetas)
31/12/98 31/12/99 31/12/00
Goods 201,856 417,420
Raw materials 724,326 763,472
Fuel 53,375 82,604
Spare parts 159,663 542,232
Cleaning materials 345,045
Ancillary materials 106,941
Advertising and entertainment materials 47,812
Replacement articles 8,974
Sundry materials 21,262 535,369 8,331
Office equipment 147,148 185,796
Real estate assets 1,550,645 1,774,794
Prepayments to suppliers 860,604 1,709,086
TOTAL 21,262 4,232,986 5,992,508
Sol Meliá, S.A. includes in inventories several buildings of no tourist interest, all of them for sale, which are included in
the real estate assets balance shown above.
The real estate assets item also includes a balance from Desarrollos Sol, S.A. relating to an important real estate development
in Santo Domingo, which is not intended for tourist operations and is consequently for sale. Ptas. 1,008 million are
also included for tacit capital gains relating to building sites for sale.
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15 Debtors
The breakdown of the short-term debts with subsidiaries is presented in Note 22.
The other increments in the debtors heading are due to the business growth and to the new acquisitions of the Group as
well as to the sales of buildings carried out by the Company.
16 Short-term Investments
The increase in the short-term securities portfolio mainly relates to the transfer of the participation in Detur Panamá, S.A.
as explained in Note 2.2., and to financial investments from the Sol Meliá Group companies in France.
The reduction of loans to subsidiaries relates to the cancellation of the loan from Sol Meliá, S.A. to Sol Meliá France,
S.A.S., since the latter is consolidated in 2000 by full consolidation method (See Note 2.3).
The movement of the other loans balance shows an increase due to the short-term deposit of US-$ 5 million of Melia
International Hotels, S.A. in the B.B.V.A.
Sol Meliá, S.A. has deposited Ptas. 1,400 million in Bankinter to guarantee a loan to Mirador del Duque S.L. for the construction
of a hotel in Tenerife. This deposit earns 3.03% interest.
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17 Own Shares
The breakdown and movement of the own shares are as follows:
(Thousands of pesetas)
AVERAGE
AVERAGE
SHARES PRICE PRICE AMOUNT AMOUNT
PTAS. EUROS PTAS. EUROS
Balance at 12/31/1999 600,000 2,044,89 12,29 1,226,936,462 7,374,037
Acquisitions of the year 630,362 1,699,70 10,22 1,071,428,509 6,439,415
Disposals of the year (195,425) (2,044,89) 12,29 (399,623,072) (2,401,783)
TOTAL 1,034,937 1,834,64 11,03 1,898,741,899 11,411,669
Provisions (96,273,821) (578,617)
TOTAL OWN SHARES 1,034,937 1,741,62 10,47 1,802,468,078 10,833,052
Disposals for the year arise from the non-monetary contribution for the acquisition of the shares of Azafata, S.A.
The Options Programmes for executives, establishing their right to purchase up to 200,000 old shares of Sol Meliá, S.A.,
have been cancelled during the year.
At December 31, 2000 the total own shares represent 0.56 per cent of share capital.
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18 Equity
The breakdown and movements of the items in this heading of the accompanying 2000, 1999 and 1998 balance sheets
are shown below:
(Thousands of pesetas)
BALANCE BALANCE DISTRIBUTION OF ADDITIONS TRANSFERS DISPOSALS BALANCE
31/12/98 31/12/99 1999 RESULTS 31/12/00
Capital 3,100,000 5,708,859 439,995 6,148,854
Non-distributable reserves 1,101,089 1,837,935 426,942 688,992 2,953,870
Share premium 33,095,450 100,418,656 32,559,608 (679,363) 132,298,900
Reserves REV. R.D.I. 7/96 8,032,947 8,032,947
Reserve Inv. Canary I. 951,121 2,033,319 1,231,808 3,265,127
Voluntary reserves 18,270 725,580 7,351,279 448,674 (3,432,770) 5,092,764
Reserves Cies. full cons. 4,623,663 26,064,671 5,472,480 7,349,787 (457,313) (245,211) 38,184,435
Reserves Cies. Eq. Method 339,506 392,171 161,249 6,459 (990) (193,913) 364,978
Conv.dif. Cies. full cons. (290,189) 6,378,310 3,487,057 9,865,367
Conv. Dif. Cies. Eq. Method (610,117) (18,963) 15,487 (3,475)
Interim dividend (1,240,000)
Consolidated P/L. 6,986,150 15,667,956 (15,667,956) 19,738,432 19,738,432
Minority interest P/L. (70,375) (1,024,201) 1,024,201 (992,642) (992,642)
TOTAL 48,004,568 166,217,239 62,604,155 0 (3,871,893) 224,949,526
18.1 Share capital
The share capital of SOL MELIA, S.A. at December 31, 2000 comprises 184,776,777 bearer shares with a par value of
Euros 0.2 each, fully subscribed and paid up.
All the shares comprising share capital quote on the Stock Exchange and have the same rights, except for the own shares.
At the Ordinary and Extraordinary General Shareholders’ Meeting held on May 29, 2000, the shareholders empowered
the Board of Directors to increase share capital without their prior consent, up to a maximum of Euros 17,155,647
(Ptas. 2,854 million). The Board of Directors was also authorised to issue convertible bonds within a maximum period
of 5 years and up to Euros 17,155,467, thereby nullifying, with regard to the pending execution period, the authorisation
given by the shareholders at the General Shareholders’ Meeting held on July 16, 1999 for the application of Euros
3.9 million.
The Board of Directors, empowered by the shareholders at the General Extraordinary Shareholders’ Meeting held on
October 23, 2000, agreed in its meeting of November 20 to increase share capital by Euros 2,644,421.40 euros by issuing
and putting into circulation a maximum of 13,222,107 new ordinary shares with a par value of Euros 0.2 each and with a
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share premium of Euros 14.8 per share. This share capital increase, arising from the purchase of the shares of Tryp, S.A.
(See Note 1), was subscribed and paid up by the non-monetary contribution of shares that represent 55 per cent of the shares
of Tribenol, S.L. and 38.4 per cent of the shares of Tryp, S.A.
At December 31, 2000 the main shareholders with direct or indirect participation in SOL MELIA, S.A. are as follows:
SHAREHOLDERS PARTICIPATION %
Hoteles Mallorquines Consolidados, S.A. 27.90%
Hoteles Mallorquines Asociados S.A. 16.30%
Hoteles Mallorquines Agrupados S.A. 6.20%
Other control shareholders 10.50%
Others 39.10%
TOTAL 100%
18.2 Reserves from parent company
18.2.1 Share premium
The increase in share premium during the year arises from the purchase of the shares of the Tryp Hotel Chain
explained in Note 1.
18.2.2 Legal reserves
SOL MELIA, S.A. has the obligation of transferring 10% of the profits for the year to constitute the legal reserve
until this equals at least 20% of the share capital. This reserve is not distributable to the shareholders and may only
be used to offset losses, should no other reserves be available.
18.2.3 Reserves for own shares
This reserve was set up for the acquisition of own shares (1,034,937 shares) and is unavailable until the disposal of
said shares at acquisition cost, less the provision charge recorded at year-end. These shares are recorded in assets in
the balance sheet of these annual accounts (See Note 17).
18.2.4 Reserve Law 19/94 Reinvestment in the Canary Islands
This reserve is unavailable since it was created based on SOL MELIA, S.A.’s commitment to invest in new fixed
assets located in the Canary Islands, with a 3 years investment term, an amount equal to the abovementioned reserve
for investments in the Canary Islands Law 19/94.
18.2.5 Revaluation reserve R.D.L. 7/1996 of June 7
This reserve, incorporated as a result of the merger in the balance sheet included in the balance sheet of the 1996
annual accounts of Inmotel Inversiones, S.A., is the consequence of the revaluations of the intangible and tangible
fixed assets carried out according to the relevant rulings, less 3% of the revaluations amount for taxation.
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The breakdown of the balance of the Revaluation reserve is as follows:
(Thousands of pesetas)
Revaluation of intangible fixed assets 242,271
Revaluation of tangible fixed assets 8,099,422
Taxation - 3% of revaluation (308,746)
TOTAL REVALUATION RESERVE 8,032,947
This reserve may be applied to offset losses, to increase the Company’s share capital and, after December 31, 2006 (10 years
starting from the date of the balance sheet including the revaluation), this reserve will be freely distributable. The balance
of the reserve cannot be distributed, directly or indirectly, unless the revaluation value has materialized by the sale or full
depreciation of the revalued items.
18.2.6 Results from prior years
Results from prior years relate to retained earnings and are freely distributable.
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18.3 Reserves of companies consolidated by full consolidation method
The most significant movements in this consolidated balance sheet heading during 2000 relate to the distribution of the
1999 results.
The breakdown of this item of the consolidated balance sheet, by companies and in thousands of pesetas, is as follows:
(Thousands of pesetas)
BALANCE AT BALANCE AT 1999 ADDITIONS TRANSFERS DISPOSALS BALANCE AT
31/12/98 31/12/99 RESULTS 31/12/00
Apartotel, S.A. (43,811) (17,384) 73,246 26,614 82,476
Bear S.A. De C.V. 161,270 (37,305) 555,864 679,828
Bisol Vallarta S.A. De C.V. 1,364,068 (242,379) 924,417 2,046,106
C.Tamarindos, S.A. 167,961 (52,797) (37,548) (33,874) 43,742
C.H.H. Mexicana, S.A. De C.V. 2,366,319 (195,818) 776,726 2,947,227
C.I. Alcano, S.A. 230,108 1,423 231,532
C.P. Sol y Nieve 226,255 52,481 634 (43,918) 235,452
C.Tunissienne de G.H. 10,829 8,560 21,445 190 (21,369) 8,825
C.T. Cozumel/Caribotels de México (1) 81,339 81,339
Cala Formentor S.A. De C.V. 6,058,246 229,648 1,526,784 7,814,678
Casino Paradisus 20,168 86,968 3,739 (58,317) (6,671) 45,887
D.H. San Juan (102) 28 (1) (74)
D.Mk.Services/Inversiones Coro (1) 89,433 (457,855) 269,199 (5,556) (104,778)
D.T.C./Marmer (1) 117,024 155,468 1,148,951 1,421,443
D.T.Caribe N.V. (1,690) (730) 1,608 (813)
Desarrollos Sol S.A. 273,653 52,995 326,648
Dock Telemarking, S.A. 441 1,311 1,941 (369) 2,884
Dominican Investment NV (47,781) (407) (283) (48,471)
Dorpan, S.L. 16,871 21,979 19,017 (6,893) 34,104
Farandole B.V. (73,035) (11,519) (584) (85,137)
G.H.T. Mesol, S.A. (1,788) 5,494 3,706
Gesmesol, S.A. 843,937 1,663,154 920,110 (13) 2,583,251
Grupo Sol Asia Ltd. 122,719 215,030 55,287 (5,572) 264,745
Grupo Sol Meliá en Francia (1) 58,870 8 58,876
Grupo Sol Services 10,085 10,487 7,550 2,096 20,133
H.C. Extremadura, S.A. 227 227
H.Meliá Internacional de Colombia 370 (74) 475 322 723
Hosterias De Castilla, S.A. (37) 140,922 (140,922) (37)
Hotel Bellver, S,A. 586,489 20,140 (19,973) (112) 586,544
Hoteles Sol Internacional 9,694,548 (178,147) 726,955 10,243,356
Hoteles Turísticos, S.A. 649 36,744 131 (36,697) 827
Impulse H. Development 17,219 (19,579) 434,958 432,597
Industrias Turísticas, S.A. 0 42,752 (42,751) 1
Inmotel Internacional (90) (758) 702 725 580
Inmotel Inversiones Italia, S.R.L. (521) (22,233) 22,233 231 (290)
Inmpulse Development Inc. (3,439) (5,417) 2 (434,958) (443,813)
Inversiones Inmobiliarias IAR 3,382,511 (621,054) 1,094,305 3,855,763
Inversiones Latinoamerica 2.000, S.L. (2,934,120) (4,542) 25 (2,938,637)
Inversiones Turísticas del Caribe (2,561) 13,777 2,590 (1,927) 14,440
Inversiones y Explotaciones Tur. S.A. 2,618 265,813 (265,283) 3,148
Irton Co./Inversiones Guamá (1) (191,607) 337 (1,713) (192,983)
Latin America Logistics Co, 8,636 (38,491) (214) (30,069)
Lavanderias Compartidas, S.A. 20 8,988 9,008
Lavanderias Ind. Guadalajara, S.A. 8,147 1,757 (9,905)
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(Thousands of pesetas)
BALANCE AT BALANCE AT 1999 ADDITIONS TRANSFERS DISPOSALS BALANCE AT
31/12/98 31/12/99 RESULTS 31/12/00
Lirax 4,163 2,196 (42,682) (40,486)
Lomondo Ltd. 309,617 (14,277) 295,340
M.I.H. U.K. LTD (2,006) (2,335) (52) (268) (2,654)
Marina International Holding 30,981 30,385 (303) (2,578) 27,504
Markserv, B.V. (10,855) (20,509) (209,701) 309,013 78,803
Marksol Turizm 40,206 57,053 (22,629) 54,104 88,528
Marktur Turizm (21,326) (21,885) (3,578) (46,790)
eliá Brasil Administraçao. 55,789 82,954 68,981 (49) 151,886
Meliá Europa Holding de Entidades, S.A. 12,316 200,286 (746,993) (534,391)
Melia International Hotels, S.A 2,689,578 3,877,020 1,399,557 (15,503) 5,261,074
Melia Inversiones Americanas, N.V. (6,440,231) 1,281,428 (33,260) (5,192,063)
Melia Management Co. 19,254 106,651 29,517 (258) 135,909
Meliá Venezuela S.A. (99,522) (108,303) 16,696 512 (91,094)
Melsol Management B.V. (63) (51,230) (3,633) 26 (54,837)
Melsol Portugal 4,217 4,372 13,705 14,327 32,404
Mesol Management, S.L. (574) 2,210 (31,838) 1,729 (27,899)
Moteles Andaluces, S.A. (0) 7,748 (7,748) (0)
Moteles Grandes Rutas Españolas, S.A. 73 13,109 739 (12,903) (16) 1,003
Neale/Inversiones Agara (1) 492,720 837,680 (79,825) 1,250,574
Op. Paseo de la Reforma, S.A. De C.V. 132 1 134
Operadora Costarisol 13,818 168,849 (348,253) 434 (178,970)
Operadora Mesol, S.A. De C.V. 375,420 790,549 173,766 377,397 34,780 1,376,492
Parque San Antonio S.A. 602,615 49,202 (46,989) (20) 604,808
Playa Salinas,S.A. 874 874
Propiedades en Arriendo, S.L. (32) (32)
Punta Elena, S.L. 6,308 6,619 12,927
Randlestop 329 (1,309) 361 (619)
Realizaciones Turísticas, S.A. 26,869 83,710 110,579
Safivic, S.A. (0) 14,870 (14,870)
San Juan Investment (102) 28 (1) (74)
Securi Sol , S.A. (33) (859) 859 (32)
Servicios Corp. Mesol, S.A. De C.V. 25,535 4,657 (13,567) 8,910
Sol Finance (33,406) (1,021) (34,426)
Sol Group B.V. 29,905 27,305 (4,518) (3,128) 19,660
Sol Group Co. (37,714) (37,866) 39,679 1,813
Sol Holding Corporation (241) (406) (559) 965
Sol Hotel Management Co. (1,546) (1,588) (20) 1,607
Sol Hotel Miami Beach (2,311) (2,777) (134) 2,910
Sol Hotel U,K. Ltd. 90,748 78,064 (25,799) 413,481 (22,650) 443,095
Sol Maninvest, B.V. (47,688) 4,544 (68,915) 65,294 923
Sol Melià (458,303) 23,107 458,303 23,107
Sol Meliá Croacia 4,943 22,113 (34,008) (6,952)
Sol Melia Europe, B.V. (1,727) 2,447 720
Sol Melia Guatemala 10 28,463 58,301 86,765
Sol Meliá Investment NV (605) (1,779) (2,384)
Sol Meliá Sevice 521,823 779,416 691,159 6,803 (101,202) 1,376,176
Talonario 5 Noches, S.L. (34,144) 72,318 15,407 (25,246) 62,479
Tenerife Sol, S.A. 2,170,377 560,095 2,730,472
Torresol Desarrollos Turísticos, AIE (3) (3)
Urme Real, S.L. (4,206) (6,695) (10,901)
TOTAL RESERVES OF COMPANIES
BY FULL CONSOLIDATION 4,623,663 26,064,671 5,014,176 7,349,787 990 (245,211) 38,184,435
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The balances of the above table are broken down by each Group subsidiary in which the parent company owns a direct or
indirect share (See Note 2). Nevertheless, the companies (1), which have the same business line, given the shareholding
structure of the subsidiaries, are presented jointly to faciliate comprehension of their contribution to the consolidated
Group.
The additions in the companies residing in Mexico (Bear. S.A. de C.V., Bisol Vallarta, S.A. de C.V., Corporación Hotelera
Hispano Mexicana, S.A. de C.V.,Controladora Turística Cozumel S.A. de C.V., Caribotels de México, S.A. de C.V., Cala
Formentor, S.A. de C.V., and Operadora Mesol, S.A. de C.V.) and Venezuela (Inversiones Inmobiliarias IAR), countries
with high inflation rates, are due mainly to these companies’ obligation to restate their financial statements.
Additions included for the D.T.C./Marmer group of companies relate mainly to a dividend collected for the sale of Hotel
Meliá Bavaro.
The other movements relate mainly to the changes introduced in the consolidation scope as described in Note 2.3. and to
the adjustments for write-off of provisions and dividends made in the consolidation process.
18.4 Reserves of companies consolidated by the equity method
The movements in this heading of the liabilities side of the consolidated balance sheet relate to the distribution of the 1999
results.
The breakdown of this heading of the consolidated balance sheet, by companies, is as follows:
(Thousands of pesetas)
BALANCE AT BALANCE AT 1999 ADDITIONS TRANSFERS DISPOSALS BALANCE AT
31/12/1998 31/12/1999 RESULTS 31/12/2000
Agotel Gmbh (195,357) (131,644) (269,693) (596,694)
Aparthotel Bosque, S.A. 43,789 35,893 17,182 (24,293) (6,064) 22,718
C.P. Meliá Castilla 256,870 234,900 5,052 (180,522) (4,064) 312,236
C.P.Meliá Costa del Sol 154,616 219,368 82,661 (63,081) (594) 238,357
Casino Tamarindos, S.A. 205,271
Hellenic Hotel Management (8,685) (13,664) 25,592 3,243
Hotel Campus, S.L.
Hotel Las Américas, S.A. 26,940 (72,025) (26,039) 98,065
I.Turísticas Casas Bellas, S.L. 6 245 (1,617) (1,366)
Meliá Inversiones Americanas, N.V. (91,367)
Meliá Mérida, S.L.
Nexprom, S.A. 153,911 34,147 1,162 (73,052) 116,168
Promedro, S.A. (2,813) 5,887 (3,074)
Sofía Hoteles, S.L.
Sol Hoti Portugal Hoteis 257 5,009 11,029 16,038
Sol Meliá Travel, S.A.
Touroperador Viva Tours, S.A. (53,216) 317,440 (9,945) 254,279
TOTAL 339,506 392,171 161,249 6,459 (990) (193,913) 364,978
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EQUITY
The balances of the above table are broken down by each Group subsidiary with direct or indirect participation of the
parent company (See Note 2).
The additions and disposals mainly relate to the changes introduced in the consolidation scope as described in Note 2 and
to the adjustments for write-off of provisions and dividends made in the consolidation process.
18.5 Exchange differences of companies consolidated by full consolidation method
(Thousands of pesetas)
BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE
31/12/1998 31/12/1999 31/12/2000 31/12/1998 31/12/1999 31/12/2000
Bear S.A. de C.V. 326,638 815,431 Markserv, B.V. 4,180 947 2,767
Bisol Vallarta S.A. de C.V. (85,975) (93,125) Marksol Turizm (40,452) (60,018) (48,803)
C.H.H.M. S.A. de C.V. 983,065 1,617,262 Marktur Turizm 14,002 17,725
C.T. Cozumel/Caribotels de Mésxico (1) 140,673 Meliá Brasil Administraçao (14,533) (30,120) (40,789)
C.Tunissienne de G.H. (541) (2,256) 218 Melia International Hotels, S.A 195,676 917,783 1,255,861
Cala Formentor S.A. de C.V. 3,251,821 4,873,370 Melia Inversiones Americanas NV 191,068 191,894
Casino Paradisus (26,887) (50,347) Melia Management Co. (35,625) (50,915) (87,014)
D.H. San Juan 87 90 Meliá Venezuela S.A. 15,823 13,950 13,539
D.Mk.Services/Inversiones Coro (161,676) (59,645) Melsol Management B.V. (388) (121) (122)
D,T.C./Marmer (56,201) (1,209,189) Melsol Portugal 29 (14,271) (14,270)
D.T.Caribe N.V. 525,835 995,415 Neale/Inversiones Agara 281,389 647,910
Desarrollos Sol S.A. 4,492 19,948 Operadora Costarisol (17,566) (6,765) (31,821)
Dominican Investment NV 13,276 26,926 Operadora Mesol, S.A. De C.V. (217,579) 67,061 218,267
Farandole B.V. (156) (180) O. Paseo de la Reforma S.A. de C.V. 21 170,054
Gesmesol, S.A. 8,505 401,678 603,209 Randlestop 119,060 220,353
Grupo Sol Asia Ltd. (6,476) 23,763 40,042 San Juan Investment 87 90
Grupo Sol Services (2,564) 3,484 2,015 Servicios Corp. Mesol, S.A. de C.V. (8,825) 13,334
H.Meliá Intnal de Colombia (968) (1,053) (2,296) Sol Finance (5,314) (7,863)
Hoteles Sol Internacional 1,071 1,030 Sol Group B.V. (37) (22) (22)
Ihla Bela de Gestao e Turismo 0 (742) Sol Group Co. 9,113 24,291 35,540
Impulse Development Inc. 0 397 Sol Holding Co. 899 2,200
Impulse H. Development (15) (17) Sol Hotel Management Co. 1,059 1,128
Inmotel I. Italia (0) (37.327) Sol Hotel Miami Beach (541) (1,607)
Inmotel Internacional 123 731 Sol Hotel U.K. Ltd (24,941) (53,274) (289,154)
Inversiones Inmobiliarias IAR (141,186) (223,622) Sol Maninvest, B.V. 4,966 2,999 2,998
Inversiones Jacuey 0 (6,470) Sol Meliá Croacia (826) 1,100 1,096
Inversiones Turísticas del Caribe 342 (2,249) (2,995) Sol Melia Guatemala (2,668) (1,334) 3,639
Irton Co./Inversiones Guamá (1,860) 101,799 Sol Meliá Investment NV (142,093) (182,782) (182,817)
Latin America Logistics Co. (1,138) (3,045) Sol Meliá Perú S.A. 0 (231)
Lirax 184 272 Sol Meliá Sevice 17,021 14,916 105,195
Lomondo Ltd. 96,543 161,513 Tryp Meditérranée 0 (7,394)
M.I.H. U.K. LTD (225) (830) (935)
Marina International Holding (30,954) (31,062) (21,668)
TOTAL (290,189) 6,378,310 9,865,367
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18.6 Exchange differences of companies consolidated by the equity method
(Thousands of pesetas)
BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE
31/12/1998 31/12/1999 31/12/2000 31/12/1998 31/12/1999 31/12/2000
Agotel Gmbh 12 26 Meliá Inv. Americanas, N.V. (591,234)
Hellenic Hot Mgment Co.HB,.SA. (3,368) (3,242) (3,516) Sol Hoti Portugal Hoteis L.D.A. 3 14 15
Hotel Las Américas, S.A. (15,518) (15,747)
TOTAL (610,117) (18,963) (3,475)
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19 Minority Interest
Some consolidated companies have minority shareholders, which represent the following amounts of the companies’ equity
and results:
(miles de pesetas)
BALANCE AT BALANCE AT 2000 ADDITIONS TRANSFERS DISPOSALS EXCHANGE BALANCE AT
31/12/98 31/12/99 RESULTS DIFFERENCES 31/12/00
Apartotel, S.A. 1,108 1,475 78 188 1,741
Bisol Vallarta S.A. De C.V. (1,219) (2,353) 35,122 1,693 33,242
C.H.H. Mexicana, S.A. De C.V. 78,887 (9,802) (7,577) 11,883 73,391
C.P. Sol y Nieve 33,228 (3,195) (634) 29,400
C.T. Cozumel/Caribotels de México (1) (201,467) 2,025,634 2,867 1,827,035
Cala Formentor S.A. De C.V. 252,299 1,559 (35,806) 14,762 232,815
Casino Paradisus 113,116 36,637 (51,758) 3,561 101,556
D.H. San Juan 3 15,033 (2) 15,033
D.Mk.Services/Inversiones Coro (1) (14,203) (8,493) 9,278 1,928 (11,490)
D.T.C./Marmer (1) (51,920) 2,983 55,127 662 6,852
D.T.Caribe N.V. 5,136 (568) (66,842) 6,414 (55,860)
Desarrollos Sol S.A. 7,103 (5,246) (1,933) 1,147 1,071
Dominican Investment NV (1,210) (21) 564 254 (414)
Farandole B.V. (2,163) (1,519) 608 (3,074)
Grupo Sol Asia Ltd. 112,462 169,479 15,401 10,853 195,734
Grupo Sol Services 6,112 14,347 1,195 418 15,961
H.C. Extremadura, S.A. 185,199 646 185,846
Hotel Bellver, S.A. 363,347 10,526 112 373,985
Hoteles Turísticos, S.A. 49,496 3,197 (356) 52,337
Ihla Bela de Gestao e Turismo 15,806 87,250 (400) 102,656
Industrias Turísticas, S.A. 25,422 1,495 26,918
Inversiones Inmobiliarias IAR 66,859 (6,431) 156 (814) 59,769
Inversiones Jacuey 1,629 (2) (116) 1,511
Inversiones y Explotaciones Tur. S.A. 1,252,596 338,685 1,591,282
Irton Co./Inversiones Guamá (1) (4,954) (15,301) 1,365 1,927 (16,963)
Latin America Logistics Co. (792) (124) 208 (20) (727)
Lavanderias Ind. Guadalajara, S.A. 23,084 (578) (23,085) (578)
Melia Inversiones Americanas NV 851,287 64,383 (249,057) 666,613
Meliá Mérida S.L. 199,989 (199,989)
Melsol Portugal 4,253 4,104 4,423 (3,199) 5,329
Moteles Andaluces, S.A. 31,071 7,044 38,115
Moteles Grandes Rutas Españolas, S.A. 29,257 1,848 (739) 30,365
Neale/Inversiones Agara (1) 36,302 9,984 (7,310) 5,612 44,586
Op. Paseo de la Reforma, S.A. 1 3,101 3,102
Parking Internacional S.A. 48 3,119 3,167
Parque San Antonio S.A. 260,083 21,485 (13,835) 267,734
Playa Salinas,S.A. 10 (5) 6
Punta Elena, S.L. 163,177 47,778 210,955
Randlestop 1,153 (16) 981 1,871 3,989
Realizaciones Turísticas, S.A. 118,497 3,181 121,678
Safivic, S.A. 10,714 1,784 (10,714) 1,784
San Juan Investment 3 15,033 (2) 15,033
Tenerife Sol, S.A. 2,961,036 558,236 3,519,270
Torresol Desarrollos Turísticos, AIE 19 (1) 19
Tryp Meditérranée 68,157 (53,112) (1,264) 13,781
Urme Real, S.L. 18,715 (497) (3,201) 15,017
TOTAL 123,935 7,250,035 992,642 2,222,811 (729,157) 63,242 9,799,570
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20 Deferred Income
20.1 Capital grants
The breakdown of the grants reflected in the balance sheet for each company and their accrual in the profit and loss account
of the current year are as follows:
(Thousands of pesetas)
BALANCE 31/12/98 BALANCE 31/12/99 BALANCE 31/12/00 ADDITIONS
B/S. P/L. B/S. P/L. B/S. P/L. 2000
AZAFATA, S.A. 4,180 849 5,028
DOCK TELEMARKETING, S.A. 3,000 500 2,500 500 2,000 500
HOTELES TURISTICOS, S.A. 18,436 2,179 16,257 2,179
INDUSTRIAS TURISTICAS, S.A. 7,261 443 6,818 443
INV. y EXPLOTACIONES TURISTICAS, S.A. 58,440 2,962 62,515 3,423 7,498
MOT. GRANDES RUTAS DE ESPAÑA, S.A. 1,059 41 1,019 41
SOL MELIA, S.A. 493,071 16,168 512,449 16,794 36,172
TOTAL 3,000 500 580,767 22,293 605,237 24,228 48,699
These grants were used mainly to finance purchases of tangible fixed assets.
20.2 Other deferred income
The breakdown of other deferred income reflected in the balance sheet for each company is as follows:
(miles de Pesetas)
BALANCE BALANCE BALANCE
30/12/98 31/12/99 31/12/00
BEAR, S.A. De C.V. 91,491 91,491
CALA FORMENTOR, S.A. De C.V. 341,954
M.I.H. U.K. Ltd. 5,449
MARKSOL TURIZM 11,360
MELIÁ INVERSIONES AMERICANAS, B.V. 561,451 302,175
SOL MELIÁ CROATIA, S.A. 969 33,274
SOL MELIÁ, S.A. 252,775 554,679 677,379
Unrealised foreign currency gains 252,775 1,567,352 1,104,319
Deferred interest 16,847 11,830
Deferred time sharing income 1,069,463 1,967,654
TOTAL 252,775 2,653,662 3,083,803
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21 Provisions for Liabilities and Charges
The balance sheet reflects in the long-term liabilities a balance of Ptas. 9,437 million as Provisions for liabilities and charges.
As indicated in Note 5 this heading includes the Group’s commitments with its personnel (movement and breakdown
not specifically quantified) as well as the provisions recorded to cover the various liabilities and contingencies arising from
operations, the commitments acquired and guarantees given to third parties, risks for legal claims and lawsuits and possible
liabilities deriving from the different possible interpretations of prevailing legal regulations. It also includes the provisions
for taxation from previous years, which are being appealed or are pending court resolution according to the following
details, in thousands of pesetas:
TAXES YEARS 12/31/2000
Tax on business location 1980, 1983 and 1987 6,456
Turnover tax 1977, 1978 and 1977 121,000
Urban land tax 1979, 1980, 1984, and 1986 to 1988 15,096
Luxury taxes 1975 a 1980, 1984 and 1985 17,209
Tax on real estate 1990 5,000
Appealed additional tax assessments 157,103
TOTAL 321,864
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22 Non-trade Debts
22.1 Issue of debentures
On September 15, 1999 Sol Meliá, S.A. carried out the so-called “Issue of Convertible Debentures of Sol Meliá, S.A.,
September 1999”, amounting to Euros 200 million, the main characteristics of which are as follows:
Amount of the issue € 200,000,000
Par value of bond: € 1,000.00
Maturity:
5 years
Debt status:
Senior (Not subordinate)
Issue price: 100.00%
Issue date: September 15, 1999
Maturity date: September 15, 2004
Coupon:
1.00% (e10,00) annual upon maturity
Maximum and minimum conversion price: 16.81 / 15.00 (35.54% / 21.00%)
Minimum conversion premium: 21.00%
Conversion ratio:
66.6489 shares per Bond
Redemption price: 112.02%
Bond yield upon maturity: 3.25%
Possibility of cancellation by issuer: After the third year. (Subject to limit of 130%
e19.51)
Credit quality:
BBB+
Maximum of shares to be issued: 13,329,779
The balance at December 31, 2000 is as follows:
Issue principal 33,277,200
Accrued interest at 2.25% 1,035,534
TOTAL 34,312,734
Sol Meliá, S.A. guarantees this issue of debentures amounting to Euros 200 million with the Total Equity of the Company.
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NON-TRADE DEBTS
On December 7, 2000 Sol Meliá Europe, B.V. carried out a private placing of debentures among investors of Deutsche
Bank for a total of Euros 206 million under the following terms:
Amount of the issue € 206,000,000
Par value of bond: € 10,000.00
Maturity:
114 days
Issue price: 98.26%
Issue date: December 7, 2000
Maturity date: March 30, 2001 (February 12, 2006)
Redemption price: 100%
Bond yield upon maturity: 5.644%
The balance at December 31, 2000 is as follows:
Issue principal 34,275,516
TOTAL 34,275,516
For presentation purposes, on the Group’s Financial Statements the balance of Ptas. 34,276 million has been reclassified to
long-term. This balance relates to the private placing of bonds of Euros 206 million, which was formalised to cover
termporarily the financing of the acquisitions made during the year and which, on the formulation date of the
accompanying annual accounts, has been covered by the issue of bonds of Euros 340 million with five-year maturities, as
explained in Note 27.
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NON-TRADE DEBTS
22.2 Debts with credit institutions
(Thousands of pesetas)
LOANS AND CREDIT LINES
DETAILS OF CREDIT LINES
S/T L/T TOTAL LAST LIMIT BALANCE BALANCE CURRENCY
MATURITY MATURITY MATUR. MATUR. BALANCE AVAILABLE USED
AZAFATA, S.A.
LEASING 6,493 6,726 13,219 PTA.
BEAR S.A. de C.V.
SOMEX 18,084 18,084 USD
BCO. SABADELL 260,222 5,453,948 5,714,170 23/6/2011 USD
SUB-TOTAL 278,306 5,453,948 5,732,254
CALA FORMENTOR, S.A. de C.V.
B.B.V. 1,269,946 8,254,651 9,524,597 30/6/2008 USD
CARIBOTELS de MEXICO S.A. de C.V. 83,174 83,174 USD
COM. PROP. SOL y NIEVE
BANKINTER 125,000 375,000 500,000 17/9/2004 PTA.
LEASING 70,182 238,676 308,858 PTA.
INTEREST PAYABLE 963 963
SUB-TOTAL 196,145 613,676 809,821
DOCK TELEMARKETING, S.A.
LEASING 3,679 4,069 7,748 PTA.
HOTEL BELLVER, S.A.
CAJA MADRID 4,000 20,000 24,000 3/7/2006 PTA.
CAJA MADRID 6,000 30,000 36,000 3/7/2006 PTA.
CAJA MADRID 10,000 70,000 80,000 1/7/2008 PTA.
SA NOSTRA 20,000 20,000 PTA.
LEASING 22,195 40,639 62,834
INTEREST PAYABLE 2,065 2,065 PTA.
SUB-TOTAL 64,260 160,639 224,899
HOTEL CONVENTO DE EXTREMADURA, S.A
BCO. DE EXTREMADURA 231,902 231,902 19/5/2017 500,000 268,098 231,902 PTA.
HOTELES TURÍSTICOS, S.A.
LEASING 55,242 94,824 150,066 PTA.
INDUSTRIAS TURISTICAS, S,A.
LEASING 7,148 4,235 11,383 PTA.
INMOBILIARIA BULMES, S.A.
B.B.V.A. 1,314,000 1,314,000 28/2/2001
INMOTEL INVERSIONES ITALIA S.R.L.
LEASING 494,741 8,080,758 8,575,499 LIT
INVERSIONES AGARA, S.A.
BANCAJA 349,817 1,661,631 2,011,448 16/7/2006 USD
INTEREST PAYABLE 32,613 32,613 USD
SUB-TOTAL 382,430 1,661,631 2,044,061
INVERSIONES CORO, S.A.
POPULAR DOMINICANO 699,634 1,049,451 1,749,085 30/4/2003 USD
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NON-TRADE DEBTS
(Thousands of pesetas)
LOANS AND CREDIT LINES
DETAILS OF CREDIT LINES
S/T L/T TOTAL LAST LIMIT BALANCE BALANCE CURRENCY
MATURITY MATURITY MATUR. MATUR. BALANCE AVAILABLE USED
INVERSIONES GUAMA, S.A.
BANCAJA 583,028 2,915,142 3,498,170 27/8/2006 USD
INTEREST PAYABLE 83,211 83,211 USD
SUB-TOTAL 666,239 2,915,142 3,581,381
INVERSIONES INMOBILIARIAS IAR 1997 CA
B.S.C.H. 665,340 2,656,613 3,321,952 3/11/2005 USD
BCO. SABADELL 429,993 2,432,540 2,862,534 12/2/2006 USD
SUB-TOTAL 1,095,333 5,089,153 6,184,486
INVERSIONES Y EXPLOTACIONES TURÍSTICAS, S.A.
HIPOTECARIO 90,000 1,790,363 1,880,363 15/5/2009 PTA.
C.A.M. 100,000 1,000,000 1,100,000 12/4/2011 PTA.
LEASING 82,318 111,547 193,865 PTA.
INTEREST PAYABLE 23,054 23,054 PTA.
SUB-TOTAL 295,372 2,901,911 3,197,283
LOMONDO LTD.
B.B.V. 487,454 9,951,914 10,439,368 20/1/2016 LUK
BARCLAYS 422,038 857,264 1,279,302 14/7/2003 LUK
INTEREST PAYABLE 405,708 405,708 LUK
SUB-TOTAL 1,315,199 10,809,178 12,124,378
MESOL MANAGEMENT, S.L.
LEASING 449,836 1,611,904 2,061,740 PTA.
MOTELES ANDALUCES, S,A.
LEASING 1,519 2,536 4,055 PTA.
MOTELES GRANDES RUTAS DE ESPAÑA, S.A.
LEASING 12,774 18,102 30,876 PTA.
PARQUE SAN ANTONIO, S.A.
LEASING 19,975 6,426 26,401 PTA.
SOL MELIA, S.A.
B.B.V. 199,029 1,990,291 2,189,320 1/12/2011 PTA.
B,N.L. 250,000 750,000 1,000,000 30/10/2004 PTA.
B.S.C.H. 160,000 1,600,000 1,760,000 28/12/2011 PTA.
C.A.M. 66,461 156,889 223,350 19/2/2004 PTA.
C,A,M, 31,012 76,510 107,522 24/3/2004 PTA,
C.A.M. 95,885 273,360 369,245 26/7/2004 PTA.
CAJA CANARIAS 99,697 493,251 592,948 30/3/2007 PTA.
CAJA CANARIAS 34,745 172,194 206,939 30/3/07 PTA.
EXTERIOR 226,667 2,266,667 2,493,334 19/12/2011 PTA.
EXTERIOR 85,101 112,158 197,259 30/4/2003 PTA.
EXTERIOR 79,943 112,003 191,946 31/5/2003 PTA.
LA CAIXA 92,988 929,878 1,022,866 30/6/2011 PTA.
LA CAIXA 110,000 880,000 990,000 1/1/2009 PTA.
LA CAIXA 151,010 113,256 264,266 27/8/2002 YEN
MARCH 297,450 1,563,383 1,860,833 1/6/2006 PTA.
RHEINHYP 572,125 2,288,500 2,860,625 27/6/2005 PTA.
RHEINHYP (1) 4,061,567 4,061,567 30/6/2001 SWAP
RHEINHYP (1) 2,411,555 2,411,555 30/6/2001 SWAP
RHEINHYP (1) 190,386 190,386 30/6/2001 SWAP
B,B.V. 4,923,148 4,923,148 19/6/2001 5,000,000 76,852 4,923,148 PTA.
B.B.V. 479,090 479,090 19/6/2001 800,000 320,910 479,090 PTA.
B.N.L. 474,659 474,659 19/7/2001 500,000 25,341 474,659 PTA.
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NON-TRADE DEBTS
(Thousands of pesetas)
LOANS AND CREDIT LINES
DETAILS OF CREDIT LINES
S/T L/T TOTAL LAST LIMIT BALANCE BALANCE CURRENCY
MATURITY MATURITY MATUR. MATUR. BALANCE AVAILABLE USED
B.S.C.H. 970,540 970,540 7/5/2001 1,000,000 29,460 970,540 PTA.
B.S.C.H. 783,906 783,906 26/11/2002 1,000,000 216,094 783,906 PTA.
BANCA DI ROMA 178,024 178,024 20/5/2002 187,500 9,476 178,024 PTA.
BANCAJA 367,649 367,649 22/10/2002 400,000 32,351 367,649 PTA.
BANESTO 3,468,716 3,468,716 29/6/2001 3,500,000 31,284 3,468,716 PTA.
BANKINTER 507,477 507,477 19/2/2011 500,000 (7,477) 507,477 PTA.
BANKINTER 971,732 971,732 21/4/2011 1,000,000 28,268 971,732 PTA.
BARCLAYS 910,827 910,827 28/7/2002 1,000,000 89,173 910,827 PTA.
C.A.M. 1,897,173 1,897,173 16/12/2001 1,000,000 (897,173) 1,897,173 PTA.
CAIXA CATALUNYA 296,902 296,902 31/7/2001 500,000 203,098 296,902 PTA.
CAJA MADRID 1,464,928 1,464,928 1/1/2002 1,500,000 35,072 1,464,928 PTA.
CREDITO BALEAR 66,143 66,143 3/10/2001 100,000 33,857 66,143 PTA.
CHASE MANHATTAN 1,482,094 1,482,094 2/3/2003 1,500,000 17,906 1,482,094 PTA.
DEUTSCHE BANK 279,350 279,350 8/9/2002 1,000,000 720,650 279,350 PTA.
DRESDNER 1.003,205 1,003,205 30/1/2002 1,000,000 (3,205) 1,003,205 PTA.
HERRERO 304,310 304,310 20/2/2001 400,000 95,690 304,310 PTA.
LA CAIXA 3,011,996 3,011,996 30/4/2003 3,000,000 (11,996) 3,011,996 PTA.
MARCH 228,026 228,026 15/10/2006 250,000 21,974 228,026 PTA.
MARCH 251,708 251,708 15/10/2006 300,000 48,292 251,708 PTA.
POPULAR 243,382 243,382 13/4/2001 250,000 6,618 243,382 PTA.
SA NOSTRA 541,116 541,116 30/9/2002 750,000 208,884 541,116 PTA.
SOLBANK 987,515 987,515 4/9/2003 1,000,000 12,485 987,515 PTA.
LEASINGS 6,972,701 10,860,206 17,832,907 PTA.
INTEREST PAYABLE 297,326 297,326 PTA.
SUB-TOTAL 16,485,648 50,732,162 67,217,810 27,437,500 1,343,884 26,093,616
SOL MELIA CROACIA
LEASING 666 666 KUNA
TENERIFE SOL, S.A.
LEASING 16,557 2,316 18,873 PTA.
TRYP, S.A.
B.B.V.A. 17,663 17,663 14/9/2001 300,000 282,337 17,663 PTA.
BANC SABADELL 26,730 26,730 22/6/2001 100,000 73,270 26,730 PTA.
BANCO DE VALENCIA 2,016 2,016 8/7/2001 50,000 47,984 2,016 PTA.
BANCO GALLEGO 59,474 59,474 17/3/2001 100,000 40,526 59,474 PTA.
BANCO ZARAGOZANO 2/11/2001 100,000 100,000 PTA.
BANESTO 21/2/2001 150,000 150,000 PTA.
BANESTO 1,696 1,696 17/3/2001 100,000 98,304 1,696 PTA.
BANKINTER 164,850 164,850 23/2/2001 300,000 135,150 164,850 PTA.
BCO. POPULAR ESPAÑOL 12/4/2001 125,000 125,000 PTA.
CAJA MADRID 214,917 214,917 27/10/2001 300,000 85,083 214,917 PTA.
DEUTSCHE BANK 302,721 302,721 14/10/2001 150,000 (152,721) 302,721 PTA.
LA CAIXA 47,588 47,588 25/2/2001 100,000 52,412 47,588 PTA.
LEASING 36,031 36,031 PTA.
BILLS DISCOUNTED 82,000 82.000 PTA.
INTEREST PAYABLE 3,822 3,822 PTA.
SUB-TOTAL 923,477 36,031 959,508 1,875,000 1,037,345 837,655
TRYP MEDITERRANEE, S.A.
CREDITS 44,223 3,771 47,994 DINAR
INTEREST PAYABLE 21,238 21,238 USD
SUB-TOTAL 21,238 21,238
TOTAL 24,805,414 101,142,984 125,948,398 29,812,500 2,649,327 27,163,173
(1) On December 29, 1995 an agreement was reached with Caja Madrid guaranteeing the payments of principal and interest in pesetas.
Most of the loans and credit lines detailed above are backed by mortgage guarantee.
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NON-TRADE DEBTS
As indicated in Note 27, on February 9, 2001 bonds with five-year maturities were issued for Euros 340 million to finance
the operations carried out during the current year, which were applied to repay the balances used of nearly all the shortterm
credit lines. Therefore, all the balances of the credit lines maturing in less than one year used to finance these operations
have been reclassified to long-term in order to give a true and fair view of the Group’s net financial position in the
presentation of the financial statements.
On the formulation date of these annual accounts, the loan of Inmobiliaria Bulmes, S.A. with B.B.V.A. for Ptas. 1,314
million was cancelled and a new loan was granted by EURO HYPO for Ptas. 8,240 million which matures in 2018. For
this reason, this balance was reclassified to long-term to better reflect the Group’s net financial position in the notes to the
consolidated annual accounts.
The breakdown of maturities in millions of pesetas is as follows:
(Thousands of pesetas)
YEAR
AMOUNT
2001 24.805
2002 14.540
2003 12.344
2004 9.580
2005 and following 64.679
TOTAL 125.948
The average interest rate accrued by the aforementioned loans plus the issue of bonds during the current year is 5.67%.
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NON-TRADE DEBTS
22.3 Balances with subsidiaries
The short-term Group companies’ balances with subsidiares are detailed below:
(Thousands of pesetas)
BALANCE 31/12/98 BALANCE 31/12/99 BALANCE 31/12/00
DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT
Apartotel Bosque, S.A. 3,203 57,249 61,310 59,857
Agotel, Gmbh 551,528
Bisol Investment, N.V. 11,630
C.P. Meliá Castilla 338,487 21
C.P. Meliá Costa del Sol 72,849
Caribotels de Mexico, S.A. de C.V. 10,430
Casino Tamarindos, S.A. 510,384
Corporación H. Metor 191,183
Deserrolladora H. Del Norte 310,613
Detur Panama 2,788 30,424
F.S.P.Tourizm 25,507
Gupe-Inmobiliária, S.A. 177,540
Helenic Hotel Management 12,978 9,282 33,990
Hotel las Américas S.A. 69,457
Melia Inversiones Americanas 63,518
Melia Mérida, S.L. 127.662
Mogan Promociones, S.A. De C.V.
Nexprom, S.A. 651 99,282
Santo Domingo Logistics 17,323
Sofía Hoteles, S.L. 26,478
Sol Hoti Portugal Hotels 415 4,336 478 7,432 78 7,992
Sol Melia France, S.A. 270
Sol Melia Marruecos, S.A. 159
Sol Melia Travel, S.A. 1,537 193,975
TOTAL 80,114 571,969 110,716 7,432 1,542,070 779,993
22.4 Other non-trade debts
The breakdown of this heading by concepts is as follows:
(Thousands of pesetas)
SHORT-TERM
LONG-TERM
DEFERRED TAXES ON PROFIT 401,565 12,216,954
GUARANTEE DEPOSITS RECEIVED 93,351 491,431
REMUNERATION PENDING PAYMENT 2,379,561
PUBLIC TREASURY 2,989,321 84,886
SOCIAL SECURITY 869,941
PUBLIC TREASURY VAT PAYABLE 401,158
FIXED ASSETS SUPPLIERS 763,194
OTHERS 344,367 705,468
TOTAL OTHER CREDITORS 8,242,457 13,498,739
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23 Fiscal Situation
23.1 Taxable income
In accordance with the prevailing legal regulations, tax returns cannot be considered final until they have been inspected by
the tax authorities or the 4-year inspection period has elapsed, which may be extended due to tax inspection proceedings.
In this regard the Group companies are open to tax inspection for the following taxes and years:
CORPORATION TAX YEARS 1996 to 1999
SALARY WITHHOLDINGS FOR INCOME TAX YEARS 1997 to 2000
V.A.T. YEARS 1997 to 2000
CANARY ISLANDS GENERAL TAX YEARS 1997 to 2000
Inmotel Inversiones, S.A. (company absorbed in 1999) has been inspected for individual and consolidated corporation tax
for 1994 to 1997, V.A.T. and withholdings on interest for 1995 to 1997 and for salary income tax withholdings for 1995
to 1998. For this reason, the statute of limitations for inspection of Inmotel Inversiones, S.A. (absorbed company) is only
1998 for corporation tax, V.A.T. and withholdings on interest and 1997 and 1998 for the Canary Islands general tax.
The tax credits derived from tax losses pending set-off are recorded for the amount of the deferred taxes existing at
year-end.
23.2 Deferred tax assets and liabilities
The breakdown of deferred tax assets and liabilities, in thousands of pesetas, is as follows:
(Thousands of pesetas)
CREDITORS
SHORT-TERM LONG-TERM
DEFERRED TAX ON PROFIT 401,565 12,216,954
TOTAL 401,565 12,216,954
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FISCAL SITUATION
23.3 Tax credits
In accordance with Law 19/94 on investments in the Canary Islands, Sol Meliá, S.A. is required to invest in new fixed
assets located in the Canary Islands during the following three years, as per the following details, in thousands of pesetas:
YEAR OF AMOUNT REINVESTED PENDING REINVESTMENT
ORIGIN TO BE REINVESTED AMOUNT REINVESTMENT EXPIRATION
1996 396,864 396,864 31/12/99
1997 554,257 554,257 31/12/00
1998 1,082,197 1,082,197 31/12/01
1999 1,231,808 1,231,808 31/12/02
2000 3,265,635 3,265,635 31/12/03
TOTAL 6,530,761 3,265,126 3,265,635
The breakdown of tax losses pending set-off of Sol Meliá, S.A. and its consolidated tax group, in thousands of pesetas, is
as follows:
AVAILABLE THOUSANDS OF
YEAR UNTIL PESETAS
1997 2008 217,177
The breakdown of the tax deductions for export activities pending application by Sol Meliá, S.A. at December 31, 2000
and deducted for tax purposes during the year are as follows, in thousands of pesetas:
PORTFOLIO INVESTMENT DEDUCTION DEDUCTIONS PENDING
INVESTMENTS AMOUNT AMOUNT 1999 2000 DEDUCTIONS
Bear, S.A. de CV 2,982,219 745,555 745,555
Lomondo Limited 1,935,798 483,950 284,154 199,796
Sol Meliá France, SAS 8,286,124 2,071,531 0 431,159 1,640,372
Agotel, GMBH 706,209 176,552 0 176,552
Sol Meliá Benelux, S.A. 1,255,373 313,843 0 313,843
TOTAL 15,165,723 3,791,431 1,029,709 630,955 2,130,768
Inmotel Inversiones, S.A. has taken advantage in 1996 of the tax benefits resulting from the reinvestment of extraordinary
profits, not including in its taxable income the proceeds obtained from the transfer of assets, of Ptas. 8,193 million, through
the corresponding adjustment to taxable income, and maintaining, subject to reinvestment, a total of Ptas. 10,724 million.
This tax profit was adjusted during the inspection of Inmotel Inversiones, S.A. and following the inspection, Ptas. 5,231
million is pending reinvestment. The resulting total deemed tax exempt due to reinvestment amounts to Ptas. 4,060 million.
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FISCAL SITUATION
As a result of the inspection adjustments, Sol Meliá, S.A. has applied tax losses amounting to Ptas. 7,248 million and tax
liabilities and assets have decreased by Ptas. 1,476 and 2,550 million, respectively, with the corresponding effect on the profit
and loss account. This was the main reason for the increase in the tax rate of the Group’s parent company in 2000 when
compared with the previous year.
The tax benefits of Sol Meliá, S.A., arising from the sale of assets and tax exempt due to reinvestment, as well as the disposal
amounts to be reinvested, in thousands of pesetas, are as follows:
AMOUNT PROFIT PENDING EXPIRATION
YEAR SALE OF SALE ON SALE REINVESTED REINVESTMENT DATE
1996 Sundry assets 5,231,169 4,060,445 5,231,169 0 1999
1997 H. Don Manolo 578,000 259,108 578,000 0 2000
1998 Sundry assets 1,469,773 977,146 1,469,773 0 2001
1999 H. Sol Canarios 825,000 369,669 825,000 0 2002
2000 Lav. Industrial de Guadalajara 215,250 172,801 0 215,250 2003
TOTAL 8,319,192 5,839,169 8,103,942 215,250
The 1996 amounts reflect the write-off of balances previously applicable to reinvestments, which have been adjusted at the aforementioned
inspection.
As indicated in Note 5 above, the tax criteria applied to financial leasing contracts signed after January 1, 1996 were modified
in 1999.
The information stipulated in Article 98 of Law 43/95, of December 27, on Corporation Tax, and on mergers and spin-offs of
activities carried out in previous years is included in the first Notes to the consolidated annual accounts approved after each
transaction, the summary of which is as follows:
Inmotel Inversiones, S.A.: 1993, 1996, 1997 and 1998
Sol Meliá, S.A.: 1999
The breakdown of tax deductions applicable for new fixed assets acquired in the Canary Islands by Sol Meliá, S.A. is:
YEAR INVESTMENT DEDUCTION APPLICATION PENDING
(QUOTA)
1999 2,457,600 614,400 500,000 114,400
2000 624,577 156,144 0 156,144
TOTAL 3,082,177 770,544 500,000 270,544
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FISCAL SITUATION
23.4 Reconciliation between taxable income and accounting results of the parent company
(Thousands of pesetas)
TAX
INCREASE DECREASE EFFECT
Accounting results for the year (Profit before taxation): --- --- 10,203,210
TEMPORARY DIFFERENCES:
Amortisation of residual value of financial leasing contracts 25,323
Deductible financial leasing instalments 119,591
Amortisation of intangible fixed assets 484,370
Interest of financial leasing contracts 51,545
Double amortisation of financial leasing 2,703,865
Indemnities to personnel 76,475 261,392
PERMANENT DIFFERENCES:
Reserve for investments in the Canary Islands Law 19/94 3,265,635
Sundry Community of Owners 72,650
Adjustment Sol Gelat 13,719
Fiscal transparency released to results 18,013
Current accounts interest of commercial Group 507,400
Disallowable expenses Fines and Sanctions 27,298
Disallowable expenses 41,385
Reinvestment of extraordinary profits 112,698 172,801
Adjustment of monetary reinvestment 629,277
Provisions 257,557
Provision Group companies 464,455
Provision Associated companies 31,265
PRELIMINARY TAXABLE INCOME 2,034,830 7,301,884 4,936,156
TAX QUOTA (35%) 1,727,655
Deduction National double taxation 20,648
Deduction International double taxation 55,706
ADJUSTED TAXABLE INCOME 1,651,301
DEDUCTIONS FOR THE YEAR
Export activities 577,955
Fixed assets Canary Islands 500,000
TAXABLE INCOME FOR THE YEAR 573,346
On-account payments and withholdings (1,526,298)
TAX RECEIVABLE (952,952)
The Company applies the consolidated taxation system for corporation tax with the following Group companies:
Apartotel, S.A
Casino Tamarindos, S.A.
Dock Telemarketing. S.A.
Dorpan, S.L.
Gestión Hotelera Turística Mesol, S.A.
Hosterías de Castilla, S.A.
Hoteles Melia, S.L.
Hoteles Sol Meliá, S.L.
Hoteles Sol, S.L
Hoteles Turísticos, S.A.
Industrias Turísticas, S.A
Inversiones Latinoamérica 2.000, S.L.
Lavanderías Compartidas. S.A.
Melia Catering, S.A.
Mesol Management, S.L.
Propiedades en Arriendo, S.L.
Realizaciones Turísticas, S.A.
Securisol, S.A
Sol Meliá Travel, S.A
Talonario Cinco Noches, S.L
Urme Real, S.A.
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FISCAL SITUATION
2000 Consolidated Corporation Tax
Individual preliminary taxable income
Apartotel, S.A. 202,871
Casino Tamarindos, S.A. 13,458
Dock Telemarketing, S.A. 25,230
Dorpan, S.L. 29,823
Gestión Hotelera Turística Mesol, S.A. 4,592
Hosterías de Castilla, S.A. 0
Hoteles Meliá, S.L. 0
Hoteles Sol Meliá, S.L. (1)
Hoteles Sol, S.L. (1)
Hoteles Turísticos, S.A. 68,295
Industrias Turísticas, S.A. 92,452
Inversiones Latinoamérica 2.000, S.L. (5,543)
Lavanderías Compartidas, S.A. (12,565)
Meliá Catering, S.A. 9,439
Mesol Management, S.L. (143,749)
Propiedades en Arriendo. S.L. (20)
Realizaciones Turísticas, S.A 231,326
Securisol, S.A. 0
Sol Meliá, S.A. 4,936,156
Sol Meliá Travel. S.A. (100,335)
Talonario Cinco Noches, S.L. 12,882
Urme Real, S.A. 1,336
CONSOLIDATED PRELIMINARY
TAXABLE INCOME 5,365,646
Tax Quota 35% 1,877,976
Deductions
Double taxation 76,353
ADJUSTED TAXABLE INCOME 1,801,623
Deductions
Export activities 630,955
Fixed assets 764
Fixed assets in Canary Islands 500,000
TAXABLE INCOME 669,904
On-account payments and withholdings (1,528,589)
TAX RECEIVABLE (858,685)
Due to the different interpretations of tax rulings in foreign countries some tax contingencies might exist which cannot be
objectively quantified. However, in the management’s opinion, should contingencies materialise, the amounts involved would
not be significant.
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24 Guarantees, commitments and contingencies
The parent company has not booked any specific provision to cover the possible contingencies derived from Egeda’s claims
since management does not consider that such claims may prosper. In any case, it is assumed that the general provision for
liabilities and charges would cover such contingency.
The guarantee deposits maintained as guarantees given to third parties and other contingent liabilities are detailed below:
(Thousands of pesetas)
AMOUNT
Security deposits for rentals 346,362
Guarantee deposits for tax settlements 1,284,846
Sundry 2,311,646
Guarantee deposits in favour of third parties on behalf of Agotel GMBH 142,659
Pledged deposit in favour of Mirador del Duque, S.L. 1,400,000
Guarante deposit on loans granted to Community of Owners Meliá Castilla 375,000
Pledged deposits for loans granted to Inmotel Inversiones Italia 2,062,320
Credit line for guaranteeing factoring 1,346,576
TOTAL 9,269,409
Sol Meliá, S.A. guarantees with the Company’s Total Equity the issue of debentures amounting to Euros 200 million (See
Note 22) of September 15, 1999 and the issue of bonds of Euros 206 million of December 9, 2000. The latter was integrated
in the issue of bonds of Euros 340 million of February 2001 (See Note 27).
Sol Meliá, S.A. is the guarantor of Detur Panamá, S.A., owner of Hotel Meliá Panamá Canal, with Banca March, for
51.79% of a credit line of US-$ 10 million, US-$ 8.9 million of which were used at December 31. The guaranteed amount
therefore amounts to US-$ 4.6 million.
Sol Meliá, S.A. secures with BBVA through mortgages on owned hotels and via personal guarantee a bank guarantee line
of Ptas. 1,500 million. These guaranteed credit lines have not been used either by the Company or its subsidiaries. The
maturity date is December 19, 2001.
Sol Meliá, S.A. is the guarantor, by deposit pledged in favour of Mirador del Duque, S.L., for a loan granted to the latter to build a hotel.
A confirming line was granted to Sol Meliá for a maximum of Ptas. 4,000 million.
Sol Meliá is the guarantor with Banco Central Hispano for two loans granted for US-$ 10 and 5 million, respectively.
The shares of Inversiones Hoteleras Los Cabos are pledged to guarantee a loan granted by Bancomex to its subsidiary
Aresol Cabos, S.A. de C.V. which matures in 2004.
The shares of Desarrollos Inmobiliarios Guanacaste and Desarrollos Hoteleros Guanacaste are deposited as guarantee for
a loan received by Desarrollos Hoteleros Guanacaste.
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GUARANTEES,
COMMITMENTS AND CONTINGENCIES
Sol Meliá, S.A. has acquired the commitment of financing, if needed, up to Ptas. 2,000 million of the construction of one
of the hotels it will rent and of mortgaging other owned assets.
Sol Meliá, S.A. is the guarantor of Lomondo Ltd. (a Group company) and Promociones Playa Blanca, S.A. for loans formalised
with banks, the debts of which at December 31, 2000 amount to Sterling Pounds 15.6 million and Euros 4.8
million, respectively.
Sol Meliá, S.A., Meliá Inversiones Americanas, N.V. and Inmotel Inversiones, S.A. (absorbed company) signed a Global
Agreement in March 1998 in order to regulate certain aspects of the intercompany relationship. The main terms of the
Global Agreement are:
Non-competition Covenant: Inmotel Inversiones, S.A. and Sol Meliá, S.A agreed not to compete in the tourist business in
Latin American and the Caribbean area unless otherwise authorized by Meliá Inversiones Americanas, N.V.
First refusal right: Meliá Inversiones Americanas, N.V. has granted to Sol Meliá, S.A. the first refusal right of operating
any hotel owned by Meliá Inversiones Americanas. N.V. that the latter may acquire or use.
Management contracts: The following standard terms will be applied to any management contract signed by Meliá
Inversiones Americanas, N.V.and Sol Meliá, S.A. or by any of their subsidiaries:
Initial period for the management contract
20 years
Sales fees
4% on gross income
Fees on G.O.P 10%
Market price: All the transactions between Meliá Inversiones Americanas, N.V. and Sol Meliá, S.A. which might imply a
clash of interests will be carried out at market price.
Sol Meliá, S.A. has firm rental commitments, which range between one and eighteen years, including documentary commitments
for approximately Ptas. 15,000 million, in accordance with the maturities of the corresponding rentals.
Sol Meliá has agreed with Tryp, S.A. (a Group company) that any amount it may receive from the former owners of the
said company to cover risks materialised in the Tryp Group would be handed over to Tryp, S.A.
Sol Meliá secures up to Euros 1,500 million the fulfilment by the subsidiary Sol Meliá Europe, B.V. of any assumed obligation
relating to the issue of “Euro Medium-Term Note Programme” Bonds to be carried out by the subsidiary. At
December 31, 2000 Sol Meliá Europe, B.V. had issued Bonds for Euros 206 million, which mature on March 30, 2001.
During the year, Hoteles Mallorquines Agrupados, S.A., Hoteles Mallorquines Asociados, S.A. and Hoteles Mallorquines
Consolidados, S.A., have paid to Sol Meliá, S.A. all the expenses and payments deriving from the warrants given to the
shareholders of Melia Inversiones Americanas, N.V., who accepted the Public Offering of Acquisition of Shares of Melia
Inversiones Americanas, N.V. approved by the Spanish National Stock Market Committee on December 30, 1998.
Claims for damages were lodged with a United States Court against various Group companies by a guest of one of the
hotels managed in Mexico. The lawyer has affirmed that he cannot as yet give an opinion on the final outcome. The
Company’s directors consider, however, that these claims will not have a significant impact on the Group’s results and
equity since Sol Meliá has a minority holding in the company that owns and operates the hotel, and in any case the Group
has an insurance policy to cover such contingencies.
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25 Income and Expenses
25.1 Consolidated income distributed according to type of income
The amounts corresponding to operating income according to geographical markets are as follows:
(Thousands of pesetas)
1998 1999 2000
Spanish market 10,409,505 78,931,425 99,425,948
International market 5,340,491 30,652,867 48,973,206
Total 15,749,996 109,584,292 148,399,154
The breakdown of income by type of service is as follows:
(Thousands of pesetas)
1,998 1,999 2,000
Net turnover 11,207,266 104,565,401 140,965,519
Hotels income 94,845,175 129,735,296
Casinos income 2,055,793 2,064,006
Time sharing income 1,930,741 2,426,001
Management income 6,651,872 3,251,352 3,821,497
Administration income 4,247,970 2,095,026 2,481,216
Franchise income 307,424 387,314 437,503
Other operating income 4,542,730 5,018,891 7,433,635
TOTAL OPERATING INCOME 15,749,996 109,584,292 148,399,154
Financial income 457,082 6,186,069 7,878,646
Extraordinary income 322,935 2,160,249 6,743,484
TOTAL CONSOLIDATED INCOME 16,530,013 117,930,610 163,021,284
25.2 Consolidated average number of employees during 2000
The consolidated average number of employees during the year is 14,033 people, distributed as follows by job category:
1998 1999 2000
EXECUTIVES 34 282 318
HEADS OF DEPARTMENT 36 818 843
TECHNICIANS 242 5.220 5,584
AUXILIARY STAFF 47 4,871 7,288
TOTAL 359 11,191 14,033
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INCOME AND EXPENSES
25.3 Consolidated personnel expenses
The breakdown of the consolidated personnel expenses is as follows:
(Thousands of pesetas)
1998 1999 2000
SALARIES, WAGES AND RELATED EXPENSES 2,198,493 25,844,228 34,321,572
SOCIAL SECURITY 336,071 7,270,556 8,960,218
INDEMNITIES 45,768 211,804
OTHER WELFARE EXPENSES 298,306 1,521,614 1,828,980
TOTAL 2,832,870 34,682,166 45,322,574
25.4 Extraordinary results
The breakdown of extraordinary results is as follows:
(Thousands of pesetas)
1998 1999 2000
PROFIT ON DISPOSAL OF FIXED ASSETS 7,637 251,500 3,302,602
CAPITAL GRANTS RELEASED TO RESULTS 500 22,293 24,228
EXTRAORDINARY INCOME 314,798 1,656,394 3,297,366
INCOME AND PROFITS FROM PRIOR YEARS 230,062 119,288
TOTAL 322,935 2,160,249 6,743,484
LOSSES ON DISPOSAL OF FIXED ASSETS 122,713 82,105
CHANGES IN FIXED ASSETS PROVISIONS (47,721) 288,409
EXTRAORDINARY EXPENSES 497,417 349,117 1,401,461
EXPENSES AND LOSSES FROM PRIOR YEARS 851,565 1,513,441
TOTAL 497,417 1,275,674 3,285,415
TOTAL EXTRAORDINARY RESULTS (174,482) 884,575 3,458,069
“Extraordinary income and expenses” for the year include gains or losses arising from the restatement of financial statements
in countries with high inflation rates. For the current year the net extraordinary profit arising therefrom amounted
to Ptas. 564 million.
A net amount of Ptas. 1,696 million relating to income obtained by the subsidiaries for operations in Puerto Rico is included
in “Extraordinary income.”
“Extraordinary expenses” includes an amount of Ptas. 500 million relating to the extraordinary charge for retirement premiums
to personnel.
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INCOME AND EXPENSES
The breakdown of the balance of “Profit on disposal of fixed assets” for the year, in millions of pesetas, is as follows:
Hotel Bardinos 588
Hotel Las Olas 534
Hotel Melia Bavaro 1,892
Other 288
TOTAL 3,302
25.5 Contribution of each company to consolidated results for the year
(Thousands of pesetas)
1998 1999 2000
CONSOL. MINOR. P/L. CONSOL. MINOR. P/L. CONSOL. MINOR. P/L.
P/L INT. PARENT CO. P/L INT. PARENT CO. P/L INT. PARENT CO
SOL MELIA S.A. 3,357,111 3,357,111 9,010,030 9,010,030 8,125,913 8,125,913
ABBAYE DE THELEME 71,539 71,539
AKUNTRA XXI,S.L. (34,921) (34,921)
APARTOTEL S.A. 73,444 (198) 73,246 28,819 (78) 28,742
AZAFATA, S.A. 53,053 53,053
BEAR S.A. DE C.V. 62,523 (169) 62,353 (37,305) (37,305) (15,652) (15,652)
BISOL VALLARTA S.A. DE C.V. (248,568) 6,189 (242,379) (131,456) 2,353 (129,103)
C.T. COZUMEL S.A. De C.V. (1,555) 769 (786)
CADLO FRANCE (1,106) (1,106)
CADSTAR FRANCE (1,464) (1,464)
CALA FORMENTOR S.A. DE C.V. 244,244 (14,596) 229,648 87,113 (1,559) 85,554
CARIBOTELS S.A. De C.V. (405,574) 200,698 (204,876)
CASINO PARADISUS S.A. 178,378 (91,410) 86,968 71,985 (36,637) 35,348
CASINO TAMARINDOS S.A. (52,797) (52,797) 58,034 58,034
COM. PROP. MELIA SOL Y NIEVE 59,883 (7,401) 52,481 (26,271) 3,195 (23,076)
COMP.TUN.GESTION HOTEL. (2,269) (2,269) 21,445 21,445 (51,072) (51,072)
CONS. INMOB. ALCANO, S.A. 1,423 1,423 1,352 1,352
CONSORCIO EUROPEO, S.A. 30,542 30,542
CORBEIL HOTEL PARIS-COLOMBES 68,176 68,176
CORP. HOT. HISPANO-MEXICANA (200,819) 5,000 (195,818) (547,600) 9,802 (537,798)
CROATIAN HOTELS&RESORTS 25,627 25,627 22,113 22,113 54,126 54,126
D.Mkt.SERVICES/ I. CORO (1) (469,547) 11,692 (457,855) (474,482) 8,493 (465,989)
D.T.C./ MARMER (1) 159,438 (3,970) 155,468 166,645 (2,983) 163,662
DARCUO XXI, S.L. (31,687) (31,687)
DES. HOT. SAN JUAN B.V. 29 (1) 28 839,833 (15,033) 824,800
DES.TUR. DEL CARIBE N.V (749) 19 (730) (31,740) 568 (31,172)
DESARROLLOS SOL 280,641 (6,988) 273,653 (293,065) 5,246 (287,819)
DOCK TELEMARKETING S.A. 1,238 1,238 1,941 1,941 9,038 9,038
DOMINICAN INVESTMENT N.V. (418) 10 (407) (1,174) 21 (1,153)
DORPAN S.L. 12,001 12,001 19,017 19,017 19,724 19,724
FARANDOLE N.V. (11,813) 294 (11,519) (84,882) 1,519 (83,362)
GESMESOL 819,217 819,217 920,110 920,110 1,051,868 1,051,868
GEST. HOT.TURISTICA MESOL 5,494 5,494 2,425 2,425
GRUPO SOL ASIA Ltd. 163,138 (65,255) 97,883 92,145 (36,858) 55,287 38,504 (15,401) 23,102
GRUPO SOL SERVICES 2,745 (1,098) 1,647 12,583 (5,033) 7,550 2,989 (1,195) 1,793
H. ALEXANDER 118,170 118,170
H. BLANCHE FONTAINE 70,112 70,112
H. BOULOGNE ADAGIO 94,388 94,388
H. CONVENTO DE EXTREMADURA S.L. 442 (215) 227 1,328 (646) 681
H. FRANÇOIS 88,308 88,308
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INCOME AND EXPENSES
(Thousands of pesetas)
1998 1999 2000
CONSOL. MINOR. P/L. CONSOL. MINOR. P/L. CONSOL. MINOR. P/L.
P/L INT. PARENT CO. P/L INT. PARENT CO. P/L INT. PARENT CO
H. MADELEINE PALACE 55,806 55,806
H. METROPOLITAN (7,895) (7,895)
H. ROYAL ALMA 201,445 201,445
H.MELIA INT. de COLOMBIA 1,130 1,130 475 475 (2,379) (2,379)
HOSTERIAS DE CASTILLA 140,922 140,922
HOTEL BELLVER S.A. 30,082 (9,942) 20,140 31,849 (10,526) 21,323
HOTELES SOL INTNAL. S.A. (178,147) (178,147) (88,566) (88,566)
HOTELES SOL MELIÁ, S.L. (1) (1)
HOTELES SOL, S.L. (1) (1)
HOTELES TURISTICOS S.A. 38,907 (2,163) 36,744 57,922 (3,197) 54,725
IHLA BELA DE GESTAO E TURISMO 45,159 (15,806) 29,353
IMPULSE HOT. DEVELOPMENT (5,417) (5,417) (4,199) (4,199)
IMPULSE HOT. DEVELOPMENT B.V. (19,579) (19,579) (1,565) (1,565)
INDUSTRIAS TURISTICAS S.A. 43,812 (1,060) 42,752 61,775 (1,495) 60,280
INMOBILIARIA BULMES, S.A. 25,230 25,230
INMOTEL INTERNACIONAL, S.A. (758) (758) (23,064) (23,064)
INMOTEL INV. ITALIA, S.R.L. (22,233) (22,233) (103,487) (103,487)
INV. EXPLOT.TURISTICAS S.A. 482,420 (216,606) 265,813 754,310 (338,685) 415,625
INV. INMOBILIARIAS I.A.R. 1997 (636,913) 15,859 (621,054) (359,279) 6,431 (352,848)
INV.LATINOAMERICA 2000 S.L. (3,268) (3,268) (4,542) (4,542) (3,253) (3,253)
INV.TUR. del CARIBE (2,846) (2,846) 2,590 2,590 747 747
INVERSIONES JACUEY 91,018 (1,629) 89,389
IRTON COMPANY/ I. GUAMA (1) (196.500) 4,893 (191,607) (854,824) 15,301 (839,522)
LATIN AMERICA LOGÍSTICS CO. (39,474) 983 (38,491) (6,918) 124 (6,794)
LAV. IND. GUADALAJARA, S.A. 2,341 (584) 1,757 (2,317) 578 (1,739)
LAVANDERIAS COMPARTIDAS S.A. 8,988 8,988 (12,636) (12,636)
LOMONDO Ltd. 309,617 309,617 (308,266) (308,266)
LONDIM FRANCE (42,093) (42,093)
LSO FRANCE INVESTIMENTS (37,814) (37,814)
M.I.H. 1,202,944 1,202,944 1,399,557 1,399,557 2,694,061 2,694,061
M.I.H. U.K. Ltd. (55) (55) (52) (52) 4,770 4,770
MARINA INT. HOLDING (596) (596) (303) (303) (272,201) (272,201)
MARKSERV B.V. (168,997) (168,997) (209,701) (209,701) (146,320) (146,320)
MARKSOL TURIZM 27,313 27,313 (22,629) (22,629) (3,609) (3,609)
MARKTUR TURIZM (21,885) (21,885) (1,461) (1,461)
MELIA BRASIL ADMINIST. 55,606 55,606 68,981 68,981 91,465 91,465
MELIÁ CATERING, S.A. 9,439 9,439
MELIA E. HOLDING de ENT., S.A. 200,286 200,286 225,594 225,594
MELIA INV. AMERICANAS N.V. 1,328,488 (47,060) 1,281,428 3,596,807 (64,383) 3,532,424
MELIA MANAGEMENT 87,397 87,397 29,517 29,517 (17,439) (17,439)
MELIA VENEZUELA (8,843) (8,843) 16,696 16,696 8,184 8,184
MELSOL MANAGEMENT (52,048) (52,048) (3,633) (3,633) 1,269 1,269
MELSOL PORTUGAL 19,263 (3,853) 15,411 17,131 (3,426) 13,705 22,116 (4,423) 17,692
MESOL MANAGEMENT S.L. 39 39 (31,838) (31,838) (93,644) (93,644)
MOT. ANDALUCES S.A. 10,411 (2,663) 7,748 27,538 (7,044) 20,494
MOT. GRANDES RUTAS ESP.,S.A. 17,744 (4,635) 13,109 7,257 (1,848) 5,409
NEALE/ I. AGARA (1) 859,071 (21,391) 837,680 557,744 (9,984) 547,761
OPERADORA COSTARISOL 155,031 155,031 (348,253) (348,253) 53,434 53,434
OPERADORA MESOL 451,316 451,316 173,766 173,766 (138,950) (138,950)
PARKING INTERNACIONAL, S.A. 4,836 (48) 4,788
PARQUE SAN ANTONIO S.A. 68,024 (18,822) 49,202 77,647 (21,485) 56,162
PLAYA SALINAS S.A. 884 (10) 874
PROPIEDADES EN ARRIENDO, S.L. (13) (13)
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INCOME AND EXPENSES
(Thousands of pesetas)
1998 1999 2000
CONSOL. MINOR. P/L. CONSOL. MINOR. P/L. CONSOL. MINOR. P/L.
P/L INT. PARENT CO. P/L INT. PARENT CO. P/L INT. PARENT CO
PUNTA ELENA S.L. 13,238 (6,619) 6,619 95,555 (47,778) 47,778
RANDLESTOP CORP. (1,342) 33 (1,309) (890) 16 (874)
REALTUR S.A. 86,755 (3,045) 83,710 90,616 (3,181) 87,435
SAFIVIC, S.A. 19,827 (4,957) 14,870 7,138 (1,784) 5,353
SAN JUAN INVESTMENT B.V. 29 (1) 28 839,833 (15,033) 824,800
SECADE, XXI, S.L. (29,406) (29,406)
SECURISOL, S.A. (859) (859) 3,218 3,218
SERV. CORP. MESOL (9,825) (9,825) (13,567) (13,567)
SOL FINANCE (1,021) (1,021) (1,185) (1,185)
SOL GROUP B.V. 1,672 1,672 (4,518) (4,518) (1,680) (1,680)
SOL GROUP CORP. 39,679 39,679 (89,896) (89,896)
SOL H.MANAG. CO. (42) (42) (20) (20)
SOL HOLDING CORP. (606) (606) (559) (559)
SOL HOTEL MIAMI BEACH (22) (22) (134) (134)
SOL HOTEL U.K. Ltd. (81,399) (81,399) (25,799) (25,799) (19,775) (19,775)
SOL MANINVEST B.V. (62,405) (62,405) (68,915) (68.915) (74,740) (74,740)
SOL MELIA BENELUX (78,229) (78,229)
SOL MELIÁ EUROPE N.V. (1,727) (1,727) (32,075) (32,075)
SOL MELIA FRANCE, S.A.S. (754,210) (754,210)
SOL MELIA GUATEMALA 28,453 28,453 58,301 58,301 31,297 31,297
SOL MELIA INVESTMENT (605) (605) (1,779) (1,779) (1,919) (1,919)
SOL MELIA PERÚ, S.A. 6,582 6,582
SOL MELIA SERVICE 348,144 348,144 691,159 691,159 683,830 683,830
TALONARIO 5N S.L. (21,821) (21,821) 15,407 15,407 48,289 48,289
TENERIFE SOL, S.A. 1,120,189 (560,095) 560,095 1,116,472 (558,236) 558,236
TORRESOL DES.TURISTICOS (4) 1 (3) (3) 1 (2)
TRYP MEDITEERRANEE 466,829 (68,157) 398,672
TRYP, S.A. 2,085,645 2,085,645
URME REAL S.A. (7,271) 576 (6,695) (6,914) 497 (6,416)
RESULT BY FULL CONSOLIDATION 6,406,261 (70,375) 6,335,886 15,506,707 (1,024,201) 14,482,506 19,579,893 (992,642) 18,587,251
AGOTEL GMBH (131,644) (131,644) (69,025) (69,025)
APART.BOSQUE 82,690 82,690 17,182 17,182 14,367 14,367
C.P.COSTA DEL SOL 3,841 3,841 82,661 82,661 91,948 91,948
CASINO TAMARINDOS, S.A. 58,393 58,393
COM, DE PROP. MELIA CASTILLA 234,900 234,900 252,734 252,734
HELLENIC HOT.MANAG. (13,664) (13,664) (18,167) (18,167)
HOTEL CAMPUS, S.L. (25,028) (25,028)
HOTEL LAS AMERICAS (26,039) (26,039)
INV TURÍSTICAS CASAS BELLAS S.L. 6 6 (2) (2)
MELIA INVERSIONES AMERICANAS 471,777 471,777
MELIA MERIDA, S.L. (2,361) (2,361)
NEXPROM, S.A. (8,685) (8,685) 34,147 34,147 61,064 61,064
PROMEDRO, S.A. 5,887 5,887 (3,976) (3,976)
SOFIA HOTELES, S.L. (11,027) (11,027)
SOL HOTTI PORTUGAL 4.752 4,752 11,029 11,029 (1,520) (1,520)
SOL MELIÁ TRAVEL, S.A. (65,218) (65,218)
TOUROPERADOR VIVA TOURS S.A. (32,879) (32,879) (53,216) (53,216) (65,251) (65,251)
RESULT BY EQUITY METHOD 579,889 579,889 161,249 161,249 158,539 158,539
CONSOLIDATED TOTAL 6,986,150 (70,375) 6,915,775 15,667,956 (1,024,201) 14,643,755 19,738,432 (992,642) 18,745,790
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26 Retribution and other Benefits
to the Board of Directors
The retribution paid to the members of the Board of Directors of Sol Meliá, S.A. during 2000 was as follows, in thousands
of pesetas:
(Thousands of pesetas)
31/12/98 31/12/99 31/12/00
Allowances for meetings attendance 35,000 44,000 62,500
Civil liability insurance 2,236 1,864 6,922
Retribution 20,275 113,837 95,000
TOTAL 57,511 159,701 164,422
None of the directors has received any type of loan or advance and the Company has not assumed any obligations with
Board members.
27 Post-balance Sheet Events
On February 9, 2001, the subsidiary Sol Meliá Europe B.V. proceeded to issue the Bonds of the “Euro Medium-Term Note
Programme” for Euros 340 million. Sol Meliá, S.A. secures the fulfilment by the subsidiary of any assumed obligation in relation
to the mentioned issue (See Note 24). This amount has been handed over to Sol Meliá, S.A. by virtue of a loan contract
formalised on February 12, 2001 with a maturity date of February 12, 2006, at an annual interest rate of 6.375 per cent.
On February 5, 2001 Sol Meliá, S.A. sold 29,096 shares of Prodigios Interactivos, S.A. for a total of Euros 11.2 million
(Ptas. 1,896 million).
No other significant event that might affect the Group’s financial statements has occurred.
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Formulation of Accounts
The formulation of the accompanying annual accounts has been approved by the Board of Directors, in its meeting of March 26,
2001, with a view to the auditors’ verification and subsequent approval by the General Shareholders’ Meeting. These accounts
comprise 67 pages, all of them signed by the Secretary of the Board. The last page is signed by all the members of the Board.
Signed: Gabriel Escarrer Juliá
Chairman
Signed: Juan Vives Cerdá
Vice Chairman
Signed: Sebastián Escarrer Jaume
Second Vice Chairman
Signed: Gabriel Escarrer Jaume
Managing Director
Hoteles Mallorquines Consolidados S.A.
Signed by proxy by María Antonia Escarrer Jaume
Director
Ailemlos S.L.
Signed by proxy by Ariel Mazin Mor
Director
Signed: Oscar Ruíz del Río
Director
Signed: Alfredo Pastor Bodmer
Independent Director
Signed: Eduardo Punset Casal
Independent Director
Signed: Emilio Cuatrecasas Figueras
Independent Director
Represented by
Mr. Alfredo Pastor Bodmer
Signed: José Joaquín Puig de la Bellacasa Urdampilleta
Independent Director
Signed: José Mª Lafuente Lopez
Secretary of the Board
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This report analyses trends in the business activity and the consolidated results of Sol Meliá, S.A. and its subsidiaries
(hereinafter “Sol Meliá” or the “Group”) for 2000.
1 Purchase of Own Shares
Following authorisation from the General Shareholders’ Meeting held in July 1997, Sol Meliá, S.A., acquired 50,000 shares
in 1997, 100,000 in 1998 and 50,000 in 1999 at an average acquisition price of Ptas. 5,298, Ptas, 7,158 and Ptas. 4,912,
respectively. The three for one split of August 9, 1999 affected the number of shares acquired during this period.
The exercise of the voting right and of the other political rights applicable to these shares is in abeyance. The economic
rights inherent to said shares, except for the right of free transfer of new shares, will be attributed proportionally to the
other shares.
These shares will be included in the calculations of capital needed to carry out the agreements adopted by the General
Meeting.
The options program prevailing until 1999 was cancelled during the year.
During the year the Company contributed 195,425 own shares to the purchase of shares of Azafata, S.A.
At December 31, 2000 the Company has a total of 1,034,937 own shares with a par value of Euros 0.2, which represent
0.56% of the Company’s share capital.
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2 Business Trends
In view of the agreements reached as a result of the acquisition of Tryp S.A., the Balance Sheet, Profit and Loss Account
and Notes thereto for the year 2000 include the consolidated figures of the Tryp Group for the last six months of the year.
2.1 Property business
Tryp figures for the second half year, which are included in the consolidated profit and loss account, have also been included in
statistics.
RevPar in the Property Business – including owned and leased hotels – has increased by 18.6%, driven by the positive performance
of the three Divisions in which Sol Meliá operates owned and leased hotels.
With an accumulated RevPar increase of 11.2% -10.4% without Tryp-, the European Resort Division has evolved very satisfactorily
thanks in great part to an outstanding summer season. The almost 16% increase in ADR was possible thanks to the
refurbishment program and the positive trend of the resort business in Spain. The Company believes that the favourable trend
of the resort business will go on in 2001, taking into account the evolution of sales to date. In the future, the renovations carried
out in our resort properties will promote the Congress and Conventions market segments.
The 13.3% -14.9%, without Tryp, RevPar increase in the European City Division confirms the positive trend of the city business
in Europe, specially in Spain. 10% is due to the evolution of the Spanish city hotels and to the incorporation of the Paris
hotels and the Meliá White House in London, with significantly higher ADR’s, 42% and 50%, respectively.
We expect to achieve important increases in ADR’s in the forthcoming years as a consequence of the existing gap between
Spanish city hotels and other European properties in terms of prices. The Company believes that the Euro currency will help
to clarify rate differences between European Regions, with a positive impact on results.
The Company would also like to emphasise the recovery in the America Division during 2000, with a RevPar increase of 29.5%.
This increase has been further boosted by the conversion of Dollars – the currency used in our hotels in Latin America – to
Pesetas. Excluding the conversion factor, the increase in RevPar would have reached 12.3%. Furthermore, without taking into
account the latest hotel incorporations, most of which have still not yet reached maturity in 2000, the RevPar increase would
have been 28.5%, mainly due to the good performance of our resorts in Mexico and the Dominican Republic.
The Company has positive expectations for the America Division in the light of the recovery in the Latin American economy,
the maturity of some units acquired in the last 18 months and the positive trend of hotel performance in the region so far.
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BUSINESS TRENDS
Statistics for the owned and leased hotels.
Table 1
Hotel statistics 00/99 (RevPar & A.D.R. in pesetas.)
Owned and leased hotels Dic-00/99 % OCCUPANCY RevPar A.D.R.
EUROPEAN RESORT 2000 79.6% 6,127 7,682
%o/1999 -4.00% 11.20% 15.84%
1999 83.09% 5,510 6,631
EUROPEAN CITY 2000 70.55% 9,617 13,632
%o/1999 -2.47% 13.35% 16.22%
1999 72.34% 8.485 11.729
AMERICA 2000 63.72% 9,085 14,259
%o/1999 1.60% 29.48% 27.43%
1999 62.71% 7,017 11,189
TOTAL 2000 74% 7,861 10,654
%o/1999 -3.57% 18.63% 23.03%
1999 76.52% 6,627 8,660
Without taking into account Tryp Hotels, the RevPar increase in the European City and European Resort Divisions would have
been 10.4% and 14.9%, respectively.
Please find below a breakdown of the components of growth in room revenues at the hotel level for owned and leased hotels.
The increases in RevPar and in available rooms, consequence of the Tryp acquisition, explain the increase in Room Revenues
in the European Division.
The increase corresponding to the America Division is explained by the increase in available rooms due to the new incorporations
in this Division – Meliá Mexico Reforma, Paradisus Cozumel, Sol Cabañas del Caribe (Mexico), Meliá Caribe
(Dominican Republic) and Gran Meliá Caracas apartments (Venezuela) – as well as the increase in RevPar.
Table 2
Breakdown of room revenues owned/leased hotels 00/99
% Increase Dic-00/99 EUROPEAN EUROPEAN AMERICA TOTAL
RESORT CITY
RevPar 11.2% 13.3% 29.5% 18.6%
Available rooms 3.9% 43.7% 17.9% 17.8%
Room revenues 15.6% 62.9% 52.7% 39.8%
The following table shows the revenue split at the hotel level. The increase of “Other Revenues” in the American Division
is due to meeting-room rental revenues generated by Congress and Convention activities.
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BUSINESS TRENDS
This is also reflected in F&B increases, particularly in the America Division. Last year Sol Meliá incorporated 18 meeting
rooms with capacity for 3,400 people in its hotels in the Caribbean. The increase in total revenues in the European Resort
and City Divisions, without Tryp, would have been 3% and 25%, respectively.
Table 3
Hotel revenue split 00/99 for owned/leased hotels.
Dic-00/99 EUROPEAN RESORT EUROPEAN CITY AMERICA TOTAL
(Millions of pesetas) 00 %o/99 99 00 %o/99 99 00 %o/99 99 00 %o/99 99
ROOMS 28,542 16% 24,694 33,140 63% 20,345 15,065 53% 9,867 76,747 40% 54,907
F&B 18,105 15% 15,808 12,446 61% 7,754 13,176 41% 9,370 43,727 33% 32,932
OTHER REVENUES 2,443 4% 2,356 3,516 54% 2,282 3,305 40% 2,368 9,264 32% 7,006
TOTALREVENUES 49,091 15% 42,859 49,102 62% 30,382 31,545 46% 21,604 129,739 37% 94,845
2.2. Management Business
As it appears in the table below, management fees have increased by 17.6%. The Gross Operating Profit G.O.P. of these
hotels has increased by 45.53%
The fees of the European Resort Division have increased by 22.8%, in good part due to the better performance of the
Croatian resorts during the year.
The positive performance of the European City hotels explains the 13% increase of management fees. The evolution of the
managed hotels in this division has been satisfactory as reflected by the 22% G.O.P. increase.
The 22.7% increase in the America Division reflects an improvement in the performance of its hotels. The improvement
cannot be attributed to any specific area, being applicable to all the countries in which the Company operates.
Management fees in the Cuban Division have increased by almost 10%, in spite of the -6,8% decrease in Incentive Fees.
The nominal percentage of Incentive Fees is charged according to the level of G.O.P. reached. In 2000 the Cuban Division
has not reached the G.O.P. margins achieved in 1999.
Table 5
Management fees of hotels managed for third parties.
Fee revenue (Millions of pesetas) Dec-00 Incr. 00/99 Dec-99
EUROPEAN RESORT Basic 1,032 18.8% 869
Incentive 741 28.9% 575
1,773 22.8% 1,443
EUROPEAN CITY Basic 998 14.9% 869
Incentive 324 7.5% 302
1,322 13.0% 1,171
AMERICA Basic 670 17.6% 570
Incentive 709 28.0% 554
1,380 22.7% 1,124
Fee revenue (Millions of pesetas) Dec-00 Incr. 00/99 Dec-99
ASIA-PACIFIC Basic 313 20.8% 259
Incentive 311 29.9% 239
624 25.2% 498
CUBA Basic 1,245 16.2% 1,072
Incentive 396 -6.8% 425
1,642 9.7% 1,497
TOTAL BASIC 4,259 17.1% 3,639
TOTAL INCENTIVE 2,481 18.4% 2,095
TOTAL 6,740 17.6% 5,734
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3 Post-balance Sheet Events.
On February 9, 2001 bonds were issued for Euros 340 million at a fixed interest rate of 6.25% with five-year maturities in
order to finance the acquisition of Tryp and to refinance part of the existing debt. This issue is part of the EMTN’s program
(European Medium-Term Notes) of Euros 1,500 million carried out in 2000.
On February 5, 2001, Sol Meliá sold part of its participation in Prodigios Interactivos S.A. to Banco Santander Central
Hispano for Euros 11.2 million. This sale gave rise to capital gains of Euros 7.5 million.
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4 Foreseeable Outlook
The outlook for the Group is directly linked to the business prospects in the main operation areas of Sol Meliá and to the
results of its five functional divisions.
In the European Resort Division, dependent on the main tourist destinations in Spain and the Mediterranean area, prospects
are positive due to the ongoing refurbishment plan and to the incorporation of new hotels in the area.
The European City Division has experienced a diversification process over the last few years, with an opening from Spain
towards other countries such as United Kingdom, France, Italy, Belgium and Germany. The prospects in these markets are
good, especially for Spain where the Company has increased its capacity after the acquisition of Tryp hotels, a well-positioned
company in the Spanish city segment. The incorporation of Tryp Hotels will be especially profitable in Madrid, the
most important European centre for Congress and Convention holding.
The foreseeable price increases in this segment in Spain and the good location of both existing and acquired hotels, as well
as the addition of various new hotels to be incorporated in next 18 months in Spain, Italy and Portugal allow us to predict
positive prospects for this division in 2001.
Given the economic recovery of Latin America since 1999, prospects for both city and resort hotels in the area are good.
For Sol Meliá, specifically, the full development of the hotels acquired over the last 18 months in Mexico, Dominican
Republic, Peru, Panama, Venezuela, Brazil and Argentina will benefit the performance of this division. During the next
two years a great many hotels in Puerto Rico, Brazil, Mexico and Peru will be incorporated to the Group.
Cuba will continue to be one of the main tourist destinations in the Caribbean during both the current and forthcoming
years. Sol Meliá, with 25 hotels and 11,000 rooms, holds 37% of the market share on the island with a dominant presence
in the most important resort and city destinations.
As for the Asia Division, tourism prospects are favourable in the region for 2001, specially in Indonesia where a 30% increase
of revenues is expected. 70 per cent of Sol Meliá’s hotels in the region are located in Indonesia.
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5 Research and Development
Sol Meliá is constantly investigating its clients’ needs so as to offer them the products and services best adapted thereto.
Such investigation includes clients’ questionnaires, opinion inquiries, quality audits, etc.
Furthermore, it endeavours to optimise quality and costs relating to the hotel operations and procedures. Sol Meliá has a
hotel technology department that investigates each one of these operations and procedures, setting up optimum working
methods and keeping up to date with the latest innovations in hotel technology and the possible application thereof.
2000 was the “e-transformation” year of Sol Meliá, with an investment of Ptas. 6,500 million in technological infrastructure
and involvement in joint venture projects. Within the e-transformation framework, Sol Meliá is launching the projects
meliaviajes.com, solmelia.com y hotelnetB2B.com (B2B portal for hotel companies, which comprises 18 companies
of the sector that represent more than 900 hotels in 21 countries).
AOL Avant , initially known as Prodigios, was formed with a participation of Sol Meliá and an exclusive right agreement
was signed whereby travel services will be provided by the Virtual Travel Agency meliaviajes.com.
The Company aims to complete satisfactorily its e-transformation and the various initiatives. The process of attaining culmination
and interactivity in real time for the different systems will be carried out during 2001.
The introduction of the new information and communication technologies in the industry will not only mean cost savings,
but is also essential to developing and maintaining competitive advantages in the future.
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Formulation of the Management Report
The formulation of this management report has been approved by the Board of Directors, in its meeting of March 26, 2001.
This management report comprises 8 pages, all of them signed by the Secretary of the Board. This last page is signed by
all the members of the Board.
Signed: Gabriel Escarrer Juliá
Chairman
Signed: Juan Vives Cerdá
Vice Chairman
Signed: Sebastián Escarrer Jaume
Second Vice Chairman
Signed: Gabriel Escarrer Jaume
Managing Director
Hoteles Mallorquines Consolidados S.A.
Signed by proxy by María Antonia Escarrer Jaume
Director
Ailemlos S.L.
Signed by proxy by Ariel Mazin Mor
Director
Signed: Oscar Ruíz del Río
Director
Signed: Alfredo Pastor Bodmer
Independent Director
Signed: Eduardo Punset Casal
Independent Director
Signed: Emilio Cuatrecasas Figueras
Independent Director
Represented by
Mr. Alfredo Pastor Bodmer
Signed: José Joaquín Puig de la Bellacasa Urdampilleta
Independent Director
Signed: José Mª Lafuente Lopez
Secretary of the Board
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