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Markets News

UPDATE 1-Melia Hotels says the worst is over after cutting quarterly loss

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MADRID, Nov 5 (Reuters) - Spain’s Melia Hotels reduced its net loss in the third quarter from the preceding three months and said the worst of the crisis was behind it after the coronavirus pandemic had nearly stifled global tourism.

The hotel chain posted on Thursday a net loss of 114.5 million euros ($135.16 million) for the July-September period after a 279 million loss in April-June. A year ago, it reported a net profit of 62.2 million euros.

Revenue plunged 79% to 111.1 million euros from a year ago, the company said.

“We are confident that the worst of the crisis is behind us, but our key markets continue to be affected by the measures being implemented by governments to combat the pandemic,” Melia said.

With governments the world over slapping on new restrictions to curb a second wave of infections, Melia said China was the only country to approach pre-pandemic levels of activity.

The company said it expects any recovery to begin earlier in resort and leisure hotels rather than city destinations.

In Spain, which accounts for 43% of the group’s rooms, Melia will focus squarely on its Canary Island resorts for the winter season, but will close resort hotels in the Balearic Islands and the mainland from the fourth quarter.

Britain and Germany removed some travel restrictions to the Canary archipelago last month, prompting budget carrier Ryanair to lay on new flights between London and Tenerife in anticipation of higher demand.

“Local authorities are working on creating safe travel corridors that would provide a major boost to the destination,” Melia said.

$1 = 0.8472 euros Reporting by Nathan Allen, editing by Andrei Khalip and Richard Chang

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