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Healthcare

UPDATE 1-Spain's Melia Hotels sees return to profitability in June

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MADRID, June 10 (Reuters) - Spanish hotel chain Melia expects to return to profitability in June after 15 months in the red, Chief Executive Gabriel Escarrer said on Thursday at the annual shareholders meeting.

The company will likely report positive earnings before interest, taxes, depreciation and amortization in June and a positive overall cashflow in July, Escarrer told shareholders.

Mallorca-based Melia has booked five consecutive quarters of net losses since the coronavirus pandemic struck, paralysing global travel and taking a heavy toll on the hotel industry.

But Escarrer pointed to a recovery in global air traffic, soaring reservations in Spain and encouraging demand from Germany and France as sources of optimism for a solid second half of the year.

“I’m sure that these ‘green shoots’ in tourism demand herald a recovery that has already begun in the vacation sector ... and which will extend out into other segments in the medium term,” he said.

Business travel should begin to pick up towards the end of the year, with several corporate events scheduled in the last quarter, he added.

Foreign tourism to Spain crashed 80% last year, forcing the closure of many hotels and drawing the eyes of international investors.

Recent data suggest a nascent recovery is underway, though arrivals remain far below 2019’s levels.

The government predicts tourist numbers could reach 30%-40% of their pre-pandemic levels in summer, rising to up to 70% by the end of the year. (Reporting by Inti Landauro and Nathan Allen Editing by Mark Potter)

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