YEAR END RESULTS 2016

Transcription

1 YEAR END RESULTS 2016

2 YEAR END RESULTS 2016 (Million Euros) Dec 2016 Dec 2015 REVENUES 1.805, ,2 4% Revenues ex asset rotation 1.798, ,4 7% EBITDAR 449,3 436,8 3% EBITDA 285,6 293,1-3% EBITDA ex asset rotation 279,5 245,8 14% EBIT 175,7 163,9 7% TOTAL FINANCIAL PROFIT (LOSS) 29,7 58,5 49% EARNINGS BEFORE TAXES 147,6 101,6 45% NET PROFIT 102,9 40,5 154% NET PROFIT ATTRIBUTABLE 100,7 36,0 180% EPS 0,4 0,2 143% REVPAR Owned & Leased 80,5 74,0 9% REVPAR Owned, Leased & Managed 70,5 61,6 14% EBITDAR MARGIN (ex - capital gains) 24,6% 23,2% 147 bp EBITDA MARGIN (ex - capital gains) 15,5% 14,6% 91 bp Business performance EBITDA ex-capital gains grew by 14% vs LY, while Net Profit Attrib. reaching its best results since 2007, surpassing the figure of 100 Mn (+180% versus LY). In terms of margins, highlights the 147 basis point improvement in EBITDAR Margin (ex-asset rotation). RevPAR owned & leased increased by 8.8%, while if we include managed Hotels, RevPAR increased a 14.3%. At operational level, all regions, including city hotels in Spain, RevPAR (revenue per available room) reports figures above those at the peak of the cycle in 2007, with increases close to double digits. The Company is especially proud of the positive evolution of certain flagship properties which are gradually achieving new highs, such as the Meliá Antillas Calviá Beach, ME Ibiza and the Gran Meliá Palacio de Isora, which have even further enhanced their positioning as core Company assets. Melia Rewards and Melia.com remained key factors to strengthen results, melia.com improving sales around 30% vs LY. Debt Management Financially speaking, current debt levels remained particularly low meeting Meliá goals. Net debt fell to 542M, a 226 M decrease compared with Dec 15, reaching at Net Debt / EBITDA ratio of 1.9 times below Melia s commitment of a ratio between 2.5-3x. The Company also made progress in the control of its net interest expense, reflected in savings of more than 28M vs LY after achieving a 90bps interest rate improvement since 2015 Year End. Development strategy In 2016, the Company opened 17 new hotels in 10 different countries, while in 2017, the Company plans to open at least 21 new hotels in different cities and destinations around the world. To this end, Melia s global development strategy continues making progress and in Q4 2016, the Company signed 7 new contracts: Meliá Palma Bay, Tryp by Wyndham Santa Ponsa, Tryp by Wyndham Caparica, ME Bangkok, ME Sitges and two latest incorporations, Innside Paris Charles De Gaulle and Innside Amsterdam. Outlook Meliá s forecast for Q1 and the year end points towards a mid-to-high single digit RevPAR increase, driven by the good expected results of the resorts worldwide, a successful strategy in Bleisure destinations and progress made in the ramp-up process within the properties opened along 2015 and Rates improvements will lead again, to profit maximization.

3 Gabriel Escarrer, Vice-President & CEO of Meliá Hotels International, Dear friend, During 2016, Meliá Hotels International once again delivered a robust performance, laying the foundations for more qualitative and profitable growth in the coming years. The Group continues to establish itself as a leading player in the resorts industry worldwide by widening our scope and becoming a global benchmark in the sector, not only in the Mediterranean area but also in Tier I international resort destinations. In this regard, in 2016 the Company relied on new strategic incorporations worldwide, including projects in Spain, Jamaica, Morocco, Cape Verde, Indonesia, Myanmar and Vietnam. The strength of our intangible assets, organized trough a complex brand architecture, and the progress made in customer knowledge continued to deliver results. While our development strategy -well dynamic and diversified- allowed the signature of 18 new hotels in 10 different countries, forecasting for 2017 the opening of at least 23 new hotels in various cities and destinations around the world. Additionally in 2016 Meliá continued with a digital transformation process, involving new sales, personalisation and revenue management tools, as well as a new more functional melia.com website. As part of our Meliá Digital program, the Company has developed new sales and communication capabilities and channels. Going forward on a global level for the Group, our efforts and ability will continue to transform business data into business intelligence. Thanks to all these strengths, we have been able to maximise growth for 2016, improving margins and consolidating the significant improvement in our operational and financial performance, highlighting the significant reduction in the Company s debt which, at year-end, was at record low levels. Concerning 2017, geopolitical factors such as Brexit, instability and terrorism, the collaborative economy, sector consolidation and macroeconomic developments will affect the performance of the industry. To meet these challenges, the aim of the Company is to keep Meliá s leadership in the resort segment, the most stable and strongest-performing segment in recent years and to further develop the international diversification of our hotels, especially in safe destinations such as Asia, the Mediterranean and the Caribbean. The risks caused by instability and a variable economic performance are minimised by consolidating the hotel management and asset-light business model, which is much better adapted to resist economic

4 cycles and grow strategically, as well as maximising the favourable situation in Spain through the renovation and repositioning of resort products. With regard to city products, the Company will continue to diversify thanks to its expertise in so-called bleisure (business + leisure) hotels, which complement business travel with leisure and lifestyle experiences. Regarding the latest market trends, I would like to emphasise the ability of Meliá Hotels International to innovate and stay ahead of the fast-changing environment. To deal with the current hyper-segmentation of tourist demand, at Meliá we have proposed a complete renewal of our brand architecture as well as the updating and refreshment of brands in the resort segment. With regard to the impact of disruptive models based on the so-called collaborative economy, Meliá will enhance its brands, offering a better and more personalised service, and also enhance the superior and luxury hotel segments, while also remaining committed to maintaining its leadership in resort hotels. To conclude this letter, just remember that this satisfactory balance would not be complete if I failed to highlight the major headway achieved in issues of corporate responsibility, an aspect that is deeply rooted in our strategy, enabling Meliá to maintain and strengthen an excellent reputation, consolidated throughout our history. In this regard, in 2016 UNICEF and Meliá renewed their commitment to 2020, reinforcing a solid cycle initiated in This agreement, which is even more ambitious and challenging than the previous ones, will contribute to the funding of the Regular Funds managed by UNICEF to improve the living conditions of vulnerable children. Moreover, Meliá maintains a strong commitment to responsible tourism, with more than 150 seals certifying Melia s bet on hotel sustainability, awarded by major international entities such as EarthCheck, Travelife and GreenLeaders on Trip Advisor. In summary, dear friends, this Year-End Report arrives at a time when, thanks to the efforts and commitment of all those comprising Meliá, the Group s financial figures reveal significant progress and our responsible and sustainable model is being acknowledged. We hope to continue to become the ideal leading and socially relevant Company that we have always intended to be. Best regards, Gabriel Escarrer. Vice-President & CEO Meliá Hotels International

5 REPORT ON HOTELS OPERATION 1

6 GLOBAL HOTELS FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues 1.508, ,0 8% Owned 788,5 781,5 Leased 719,9 616,6 Of which Room Revenues 932,2 848,2 10% Owned 419,8 424,8 Leased 512,3 423,4 EBITDAR Split 388,6 342,9 13% Owned 211,6 199,8 Leased 177,0 143,1 EBITDA Split 224,8 203,1 11% Owned 210,3 199,8 Leased 14,4 3,3 EBIT Split 133,7 88,0 52% Owned 144,6 108,0 Leased -10,9-20,1 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 283,2 234,2 21% Third Parties Fees 57,4 54,6 Owned & Leased Fees 94,2 81,3 Other Revenues * 131,6 98,4 Total EBITDA management model 80,5 44,3 82% Total EBIT management model 79,6 43,3 * Other Revenues in 12M2016 includes 55.8 mn euros Corporate Revenues not directly attributable to any specific Division. Idem in 12M2015 data by 47.2 mn euros 12M M2015 % OTHER HOTEL BUSINESS mn mn change Revenues 77,3 69,6 11% EBITDAR 5,9 5,7 EBITDA 5,4 5,4 1% EBIT 4,5 4,4 MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL HOTELS 71,6% 0,9 112,3 7,5% 80,5 8,8% 68,4% 1,7 103,0 11,5% 70,5 14,3% TOTAL HOTELS SAME STORE BASIS 71,7% 0,4 112,3 3,7% 80,6 4,2% 68,7% 0,4 102,7 6,6% 70,6 7,3% AMERICA 69,3% -2,3 120,5 6,6% 83,6 3,2% 67,2% -1,2 119,9 5,6% 80,5 3,8% EMEA 71,9% -0,8 151,0 4,4% 108,6 3,2% 70,2% 2,5 150,4 8,3% 105,6 12,4% SPAIN 67,5% 0,5 87,8 9,3% 59,3 10,2% 65,7% 0,9 88,6 7,8% 58,2 9,4% MEDITERRANEAN 79,1% 6,8 85,3 18,0% 67,5 29,0% 77,1% 9,7 83,8 24,7% 64,7 42,8% CUBA ,3% -4,1 98,1 17,1% 65,0 10,3% BRASIL 3,0% - 265,0-7,8-53,0% -1,9 78,7-9,9% 41,7-13,0% ASIA ,8% 0,6 76,6-0,2% 47,4 0,8% * Available Rooms 12M2016: 11,585.6k (vs 11,468.7k in 12M2015) in O&L // 22,649.1k (versus 23,916.3 in 2015) in O,L&M FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms GLOBAL HOTELS Management Franchised Owned Leased

7 HOTEL MARGINS Occup. ARR RevPAR RevPAR by Price EBITDAR Chg % Chg % Chg % % Chg % Chg % EBITDAR MARGIN EBITDAR EBITDA EBITDA MARGIN FLOW THROUGH Chg % Chg % EBITDA FLOW THROUGH TOTAL HOTELS OWNED & LEASED 1,2% 7,5% 8,8% 85,5% 13,0% 1,3% 42,6% 10,2% 0,4% 19,8% AMERICA (usd) -3,2% 6,6% 3,2% 207,2% 5,9% 0,3% 34,0% 1,1% -0,9% 5,9% EMEA -1,2% 4,4% 3,2% 138,5% 4,6% 0,1% 28,1% 2,1% -0,2% 6,9% SPAIN 0,8% 9,3% 10,2% 91,2% 20,2% 2,2% 47,6% 98,9% 2,6% 31,9% MEDITERRANEAN 9,3% 18,0% 29,0% 62,0% 51,9% 5,8% 57,2% 76,8% 3,9% 31,9% Occup. ARR RevPAR RevPAR by Price EBITDAR Chg % Chg % Chg % % Chg % Chg % EBITDAR MARGIN EBITDAR EBITDA EBITDA MARGIN FLOW THROUGH Chg % Chg % EBITDA FLOW THROUGH TOTAL HOTELS OWNED & LEASED SAME STORE BASIS 0,5% 3,7% 4,2% 86,7% 7,5% 0,8% 46,6% 8,7% 0,7% 33,5% AMERICA (usd) -4,6% 2,4% -2,3% 103,6% 1,8% 0,6% NA 1,8% 0,5% NA EMEA -1,0% 3,3% 2,3% 143,6% -0,3% -0,6% NA 0,7% -0,2% 5,7% SPAIN 0,8% 7,7% 8,6% 90,5% 21,3% 2,4% 49,0% 598,2% 2,8% 31,6% MEDITERRANEAN 7,9% 10,7% 19,4% 55,0% 36,9% 4,1% 52,2% 66,2% 3,6% 34,6% Gran Meliá Nacional Rio de Janeiro Brazil 7

8 AMERICA FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues 451,6 428,4 5% Owned 423,3 419,3 Leased 28,2 9,1 Of which Room Revenues 196,2 182,2 8% Owned 171,7 174,0 Leased 24,5 8,2 EBITDAR Split 120,0 112,5 7% Owned 116,6 111,7 Leased 3,5 0,7 EBITDA Split 113,6 111,6 2% Owned 116,6 111,7 Leased -2,9-0,1 EBIT Split 84,1 60,5 39% Owned 87,7 61,3 Leased -3,6-0,8 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 60,5 52,0 16% Third Parties Fees 4,2 3,5 Owned & Leased Fees 29,6 26,7 Other Revenues 26,7 21,8 MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL AMERICA 69,3% -2,3 120,5 6,6% 83,6 3,2% 67,2% -1,2 119,9 5,6% 80,5 3,8% TOTAL AMERICA SAME STORE BASIS 68,2% -3,3 120,6 2,5% 82,3-2,2% 66,9% -1,2 120,0 2,6% 80,3 0,7% México 78,7% 1,5 116,5 1,0% 91,7 2,9% 76,1% 4,8 123,0 5,7% 93,5 12,8% Dominican Republic 72,7% -1,8 114,8 2,5% 83,5 0,0% 72,7% -1,8 114,8 2,5% 83,5 0,0% Venezuela 43,5% -9,4 99,3 39,4% 43,2 14,5% 43,5% -9,4 99,3 39,4% 43,2 14,5% U.S.A. 75,3% -1,2 179,5 43,8% 135,2 41,6% 71,3% -5,2 179,7 44,0% 128,2 34,2% * Available Rooms 12M2016: 2,348.5k (vs 2,250.0k in 12M2015) in O&L // 3,044.8k (versus 2,917.6 in 2015) in O,L&M CHANGES IN PORTFOLIO Openings between 01/01/ /12/2016 Hotel Country / City Contract # Rooms Meliá Braco Village Jamaica Management 226 Innside New York NoMad Manhattan, U.S.A. Lease 312 ME Miami Miami, U.S.A Management 130 Disaffiliations between 01/01/ /12/ FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms TOTAL AMERICA Management Franchised Owned Leased

9 Month Results As mentioned in the previous Release in the Outlook Chapter, during the fourth quarter the Company observed a better performance of hotels and resorts in the Americas, allowing overall results to reinforce the improvements shown during the 3Q, even above those initially expected. In this regard, despite occupancy levels continuing to be under pressure in all markets, it highlights the excellent price performance. The main reasons behind this performance are as follows: a) The contribution of the new openings, especially of Innside New York NoMad, in which the Company is especially proud of its rate positioning, taking into consideration that it has become the hotel with the highest annual average rates in the entire portfolio for the Americas, even in its recent opening (March 2016). Regarding ME Miami, this is still in the initial phase of positioning. However, due to its unique location among the most important cultural attractions in Miami, the Company trusts that during this first semester it will reach a significant ramp-up. b) An improved performance in Mexico, highlighting the contribution of Paradisus Cancun during 2016 and the positive evolution of the Paradisus Playa del Carmen during the last quarter. An important event in Mexico was the re-launching of the new Paradisus Los Cabos (previously Meliá Cabo Real) on 23rd December for the Christmas & New Year period. NOTE: Comparative data from 2015 differ from those reported as at the release of 12 Months 2016 due to the inclusion of the hotels Meliá Puerto Vallarta and Meliá Cozumel in both periods (in 2015, included in the Club Meliá Business). Excluding these hotels, growth is still 3.2%, so this did not affect overall growth. Outlook Overall, the Outlook for the Dominican Republic appears to be challenging, due to the oversupply situation, taking into consideration that the Punta Cana destination has 5,000 more rooms over the previous year. After the slight slowdown in 2016, Q is reporting figures below last year. In Mexico, the situation is much better. Canada and LatAm feeder markets show a good pace of reservations and since January - given the improved weather conditions - it seems that the US feeder market could also rise. In this latter market, since January the Company has been running an Online campaign for the Paradisus Resorts and, later, for the Melia Resorts in America, registering daily rates of growth of around 40% in sales in melia.com compared with the same date last year, making the Company confident in its performance. Moreover, the fact that the more solid group s base in some of our hotels in Mexico will undoubtedly help to improve figures should also be taken into consideration. In addition, it should be recalled that in March ME Cancun will re-open after its refurbishment, while the Company also has good expectations for Paradisus Los Cabos. Paradisus Los Cabos, in Q1 2017, is in an initial phase of positioning, registering a share of 80% in E-Commerce channels and 20% in B2B channels. The performance of melia.com is picking up very well and is the No. 1 account for the hotel, so Meliá Hotels International is convinced that will show great performance in line with all our other Paradisus Resorts. Portfolio and pipeline In Q the region did not suffer any changes in its portfolio. As far as the pipeline is concerned, in Q4 a new opening was initially expected - Meliá Cartagena (Cartagena de Indias, Colombia) - in a strategic location in the Caribbean and one of the preferred destinations in the country for vacations and business meetings. However, this opening has been delayed until Q will also see significant openings such as the Meliá Costa Hollywood (U.S.A) and the Innside Bogotá. 9 The current year will also witness the transformation and rebranding of the old Meliá Cabo Real in Mexico now Paradisus Los Cabos - which, as of 1st January, has been considered an owned hotel, after the Company purchased a 85% stake in the hands of a third party. This asset is considered a strategic hotel for the Company, showing an excellent track record during the period, the Company having managed the hotel under a management contract. After its refurbishment, the Company expects a significant improvement in its profitability and contribution to the consolidated statements.

10 EMEA FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues 533,0 511,5 4% Owned 210,3 200,7 Leased 322,6 310,8 Of which Room Revenues 370,5 355,2 4% Owned 144,8 147,3 Leased 225,7 207,9 EBITDAR Split 134,1 128,3 5% Owned 57,7 59,3 Leased 76,4 69,0 EBITDA Split 68,4 66,9 2% Owned 56,5 59,3 Leased 11,9 7,6 EBIT Split 34,6 37,3-7% Owned 32,9 39,4 Leased 1,7-2,1 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 56,1 44,9 25% Third Parties Fees 3,2 2,7 Owned & Leased Fees 31,7 28,6 Other Revenues 21,3 13,6 MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL EMEA 71,9% -0,8 151,0 4,4% 108,6 3,2% 70,2% 2,5 150,4 8,3% 105,6 12,4% TOTAL EMEA SAME STORE BASIS 72,8% -0,7 150,6 3,3% 109,7 2,3% 72,6% -0,5 150,8 3,2% 109,5 2,5% Spain 72,2% -0,7 199,4 12,0% 144,0 10,9% 71,4% -0,4 200,5 11,7% 143,2 11,1% United Kingdom 75,6% -1,9 168,1-14,1% 127,0-16,1% 75,6% -1,9 168,1-14,1% 127,0-16,1% Italy 62,8% -6,3 210,1 23,1% 131,9 11,9% 62,2% -6,3 212,0 22,7% 131,8 11,4% Germany 71,7% -0,5 108,3 7,9% 77,6 7,2% 71,7% -0,5 108,3 7,9% 77,6 7,2% France 69,3% -4,4 169,2-6,4% 117,2-12,0% 69,3% -4,4 169,2-6,4% 117,2-12,0% * Available Rooms 12M2016: 3,410.4k (versus 3,373.1 in 12M2015) in O&L // 3,777.7k (versus 4,072.2 in 2015) in O,L&M CHANGES IN PORTFOLIO Openings between 01/01/ /12/2016 Hotel Country / City Contract # Rooms Sol House Taghazout Bay Surf Morocco Management 87 Innside Aachen Germany Lease 158 Innside Leizig Germany Lease 177 Frankfurt Ostend Germany Lease 168 Disaffiliations between 01/01/ /12/2016 Melia Sharm Egypt Management 468 Sol Taba Egypt Management 440 Sol Dahab Egypt Management 218 Innside Berlin Germany Lease 133 FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms TOTAL EMEA Management Franchised Owned Leased

11 Month Results In general terms, the EMEA region showed a very solid performance, with a 3.2% growth on RevPAR over last year, mainly due to price increases. This growth is maintained by the extraordinary performance of Spain and Germany on the one hand, and the slow but steady recovery of the UK and France markets during Q4 on the other. Unfortunately, Italy and the Middle East struggled compared with last year s results. GERMANY/AUSTRIA Given that 2016 was a very strong year for trade fairs in Germany, Meliá s efforts focused on maximising growth and taking the maximum advantage of the market situation. Consistency is the word that has defined Germany for several quarters now, and Q was no exception. In addition to the very successful openings of Innside Leipzig and Aachen, the Company recorded excellent performance for Innside Wolfsburg and Melia Vienna. SPAIN Within the extraordinary performance of our Spanish Hotels in Q4, as well as our Urban Hotels, in the last stage of the seasonal resorts we highlight the fantastic performance of Gran Melia Palacio de Isora, our Luxury Resorts flagship in Europe, which overperformed compared with 4Q last year by more than one million euros in revenues, and also ME Ibiza, which recorded an excellent performance in Q4 being the golden closure of another fantastic season. However, it is also important to stress significant RevPAR growth in our Urban Hotels, such as Gran Melia Colon and Meliá Barcelona Sky. Moreover, it is worth mentioning the successful opening of Gran Melia Palacio de los Duques in Madrid, which has positioned itself within the top hotels in the city - achieving an Average Room Index of 96% - meaning that this hotel is immediately in line with the ADRs of the destination s top hotels. UK The situation of recovery in the UK has a lot of similarities with France, even in addition to Brexit and the instability of the pound. Q4 matched last year s figures (RevPAR +0.2%). To do as well would be an major step ahead in Q FRANCE In Q4, Meliá recorded two completely different sets of figures: a) the first 40 days were still negative since the Company had not yet recovered from October 2015 level; b) however, on the other hand it recorded a significant recovery from 11th November to year-end. As a result of this situation, Q4 achieved the same amount of room revenue as last year (-0.1%), recovering a significant amount of volume but still with a general fall in ADRs, which will take a while to recover. ITALY Italy was a major challenge for the EMEA in Q4. The post-expo factor was very significant, particularly in October, while the lack of congress in November also had an impact. However, Milan was the only destination that showed a negative trend in Italy, while Rome and Genova reported slight growth rates. Outlook In Germany, even though 2016 was a great year in terms of fair days, Q is also looking very solid. We are forecasting a high single-digit revenue growth, since it is the Fair season in Dusseldorf. The Company will notice a certain lack of fair days ahead compared with last year (in 2016 there were 188 Fair days, while in Fair days are expected), but not in Q1. 11

12 France and the UK also have good prospects for In the UK, the Company is looking at a double-digit growth in Q1 2017, while in France the forecast for Q1 is looking quite positive, forecasting a Revpar growth of around +5%, so we are really looking at a positive change in trend for our two biggest challenges in ME London, the flagship of the ME brand, is forecasting a rather optimistic +20% RevPAR for Q Also, in Italy, given the normalised comparable figures in 2016, the situation seems to be returning to normal, with a forecast of a great year in To end this section, the situation in Spain will suffer in Q1 from the fact that Easter week falls in April 2017, which will affect Q1 figures. However, it is expected to recover the gap in Q2, with very good prospects for Premium Hotels in Spain in both urban hotels and resorts. Portfolio and pipeline Concerning the movements in the portfolio, in Q the Company opened one hotel in Germany, the Innside Frankfurt Ostend (lease contract, 168 rooms). The Innside Frankfurt Ostend opened in October 2016, becoming the Company s fourth hotel in Frankfurt, one of the most interesting destinations in Germany for Meliá given that it is an important business and transport hub that hosts many important trade fairs and congresses. After an intense 2016, concerning the development activity in the EMEA - with the sign-off of 12 new hotels - the pipeline as at 12/31/2016 includes 24 new hotels to open across the EMEA up to Out of these 24 hotels, 9 properties will be opened during this year, reflecting the efforts made to diversify our business, of which: 3 are located in the Middle East (ME Dubai, Innside Doha and Gran Meliá Huravee in the Maldives); 3 in Africa (the Meliá Serengeti in Tanzania and 2 Meliá Saidia Resorts in Morocco); and 3 in Europe (the Innside Hamburgo Högerdamm in Germany, the Tryp by Wyndham Caparica in Portugal and the ME Sitges Terramar in Spain). The last two hotels (Tryp by Wyndham Caparica and ME Sitges Terramar), are included within the new sign-offs made during Q4 2016, together with the Innside Paris Charles de Gaulle (267 rooms) and the Innside Amsterdam (328 rooms), both lease contracts and with openings scheduled for INNSIDE Leipzig Germany 12

13 MEDITERRANEAN FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues 245,7 205,7 19% Owned 82,3 95,7 Leased 163,5 110,0 Of which Room Revenues 165,9 131,1 27% Owned 53,0 58,0 Leased 112,8 73,1 EBITDAR Split 66,5 43,7 52% Owned 19,9 14,8 Leased 46,5 29,0 EBITDA Split 29,2 16,5 77% Owned 19,9 14,8 Leased 9,3 1,7 EBIT Split 17,3-2,5 Owned 13,8 1,0 Leased 3,5-3,5 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 39,0 29,4 33% Third Parties Fees 12,6 14,3 Owned & Leased Fees 15,8 11,4 Other Revenues 10,6 3,7 MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL MEDITERRANEAN 79,1% 6,8 85,3 18,0% 67,5 29,0% 77,1% 9,7 83,8 24,7% 64,7 42,8% TOTAL MEDITERRANEAN SAME STORE 78,9% 5,8 79,1 10,7% 62,4 19,4% 77,0% 7,7 78,7 14,5% 60,6 27,3% BASIS Spain 79,1% 6,8 85,3 18,0% 67,5 29,0% 78,5% 4,3 84,5 17,5% 66,3 24,2% Cape Verde ,3% 27,1 77,6 20,6% 51,5 103,8% * Available Rooms 12M2016: 2,457.2k (versus 2,505.6 in 12M2015) in O&L // 4,828.5 (versus 6,034.4k in 2015) in O,L&M CHANGES IN PORTFOLIO 13 Openings between 01/01/ /12/2016 Hotel Country / City Contract # Rooms Sol Costa Atlantis Canary Islands, Spain Rental 289 Sol Dunas Cape Verde Management 843 Llana Beach Resort & Spa Cape Verde Management 303 Sensimar Cabo Verde Resort & Spa Cape Verde Management 302 Disaffiliations between 01/01/ /12/2016 Sol Finida Croatia Management 290 Sol Park Umag Croatia Management 2500 Sol Savudrija Apart. Croatia Management 627 Sol Kanegra FKK Umag Croatia Management 426 Sol Stella Maris Umag Croatia Management 575 Umag & Residence Croatia Management 28 Sol Parque San Antonio Canary Islands, Spain Owned 252 FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms TOTAL MEDITERRANEAN Management Franchised Owned Leased

14 Month Results In terms of business performance, the general trend was that all destinations reported better results than the previous year, having generated significant rate increases. During Q4, the most relevant aspects were: a) the very positive evolution of resorts overall in October, in some cases able to extend the summer season; and b) very positive figures in the Canary Islands, especially in Tenerife. In this regard, it should be mentioned that the Winter season has recorded excellent results, showing yield improvements even above those initially expected. Within the evolution of hotels in the Balearic Islands mainly during the summer season - special emphasis should be placed on: a) the successful positioning of the Meliá Antillas Calviá Beach, which performed excellently after its re-launch, especially with regard to its rate positioning; b) good results in the Sol Katmandú Hotels & Resort, a hotel recognised as Best Innovation in Service in 2016 by the European Hospitality Awards; c) the performance of the Sol House Mixed by Ibiza Rocks hotels in Majorca and especially in Ibiza, with both hotels being very well received; d) finally, the very positive performance of hotels operating under the Sol Beach House brand, a new concept designed specifically for adults in Spain: Cala Blanca, Ibiza and Menorca. Outside Spain, also of note was the contribution of Cape Verde, where the Company almost doubled its results with 27 million in additional contribution. Outlook Regarding 2017, the Company maintains a positive stance on improved results over the previous year, with the main trend being a slight decrease in occupancy but with higher prices. In this respect, rate negotiations with main TOs reached midsingle-digit improvements, except in re-branded/refurbished hotels, where new rates improved by a double digit. Going forwards into 2017, the aim of the Company is to continue with its successful strategy focus on the repositioning of mature destinations, as has been the case in the Balearic Islands, by extrapolating its expertise and know-how to other touristic spots such as Torremolinos (Málaga, Spain). These investments not only aim to improve and upgrade the physical condition of the hotels, but have also been used to differentiate the hotels to enhance their competitiveness and attract a greater diversity of traveller profiles, thereby also enhancing the social and economic profitability of the tourism model. Faced with the current hyper-segmentation of tourist demand, in 2017 the Company will complete the renewal of its brand architecture, and the updating and refreshment of brands in the resort segment such as Sol Hotels and its new sub-brands Sol House, Sol Beach House and Sol Katmandu. In this regard, ahead of the 2017 summer season, the Company will refurbish, among others: Beach House Mallorca, Mirador de Calas de Mallorca and Sol Cala Antela (previously the Sol Calas de Mallorca resort) in the Balearic Islands; Sol Don Pablo in mainland Spain; and Meliá Gorriones and Meliá Salinas in the Canary Islands. Additionally, a factor that will undoubtedly lead to price increases in 2017 will be a Company sales strategy focused on dynamic rates within the tour operator segment, favouring yield management and revenue maximisation. As far as Brexit is concerned, the Company mentioned that it has not perceived any slowdown in the sale of vacation packages trough TOs, appreciating a slight slowdown in melia.com sales from the UK feeder market, depending on currency movements. Although we do not expect a major impact on the UK feeder market, we will compensate for the slowdown expected in the high season and in more expensive segments with demand from other feeder markets. 14

15 In general terms, the Company observes the following: a) an extended Booking window: given that on-the-books reservations through TOs appear to have accelerated (with pick-up figures above last year), as a result of a willingness to make reservations earlier than usual (probably with the aim of reducing possible Brexit risks); b) Increasing demand for All-Inclusive products and midscale products (3-4 stars) in general; c) A higher demand during the medium and low season, while the high season maintains a more moderate rate of growth. In the short term, ahead of Q1, the Company is still registering strong growth in the Canary Islands, with figures well above those of last year. Portfolio and pipeline It is a pleasure to inform you about the following hotel openings as of December 2016 in Cape Verde: Meliá Sensimar Cabo Verde (302 rooms) and Meliá Llana (303 rooms). Regarding the positioning of Meliá Hotels in Cape Verde, it should be mentioned that during Q4 of 2016, the hotel Meliá Las Dunas suffered a split of 843 rooms, creating the new Sol Dunas, for a better customer segmentation in a country where the Company currently has 4 hotels in operation and 2 more in the pipeline (to be opened in 2018 under management). Regarding the disaffiliations, as the Company informed in the Q3 issue, in November 2016 Meliá Hotels International sold the 246-room Sol Parque San Antonio resort, located in Puerto de la Cruz (Canary Islands, Spain). From then on, the hotel has no longer been included in the Meliá Hotels International portfolio. Finally, it is worth noting the repositioning that the Company has been working on at the Sol Calas de Mallorca Resort in the Balearic Islands. The redesign and relaunch has involved the creation of 3 new products: Sol Cala Antena, Sol Mirador Calas and Sol Calas de Mallorca - which underwent a slight adjustment in its number of rooms. Meliá Llana Cabo Verde 15

16 SPAIN FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues 278,1 252,4 10% Owned 72,6 65,7 Leased 205,5 186,7 Of which Room Revenues 199,5 179,7 11% Owned 50,2 45,6 Leased 149,3 134,2 EBITDAR Split 70,2 58,4 20% Owned 17,3 14,0 Leased 52,8 44,4 EBITDA Split 15,9 8,0 99% Owned 17,3 14,0 Leased -1,5-6,0 EBIT Split 0,1-7,4 Owned 10,2 6,3 Leased -10,1-13,7 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 34,6 30,8 12% Third Parties Fees 5,8 7,1 Owned & Leased Fees 17,2 14,5 Other Revenues 11,6 9,2 MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL SPAIN 67,5% 0,5 87,8 9,3% 59,3 10,2% 65,7% 0,9 88,6 7,8% 58,2 9,4% TOTAL SPAIN SAME STORE BASIS 67,4% 0,5 84,9 7,7% 57,2 8,6% 65,3% 1,1 84,3 8,1% 55,0 10,1% Spain 67,5% 0,5 87,8 9,3% 59,3 10,2% 65,7% 0,9 88,6 7,8% 58,2 9,4% * Available Rooms 12M2016: 3,365.9k (versus 3,340.0k in 12M2015) in O&L // 4,543.1k (versus 4,675.5k in 2015) in O,L&M CHANGES IN PORTFOLIO Openings between 01/01/ /12/2016 Hotel - Country / City Contract # Rooms Disaffiliations between 01/01/ /12/2016 Innside Madrid Suecia Madrid, Spain Management 127 Tryp Salamanca centro Salamanca, Spain Management 63 Tryp Náyade Segovia, Spain Franchise 125 Tryp Ceuta Ceuta Management 120 Tryp Segovia Sierra Segovia, Spain Franchise 150 FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms TOTAL SPAIN Management Franchised Owned Leased

17 Month Results In an in-depth analysis of the evolution of the hotels according to their geographical area, the main points are as follows: EASTERN SPAIN The positive results in the Spanish division improved during the course of the year, specifically due to the performance of the hotels in the eastern part of the country (Catalonia, Valencia and the Balearic Islands). Results improved considerably, largely as a result of the Company s leadership in the Bleisure segment, where its vast resort experience enables it to maximise revenues in urban destinations with a strong leisure component. In particular, the Eastern region closed the year with an improvement over last year of 16 million in revenue, showing the following split: The Spanish Levante improved by 7 million, Palma de Mallorca by 5 million and Catalonia by 4 Million. Especially strong was the performance of the summer season. In the area, the higher contribution of F&B figures is also highlighted. Within a context of yield management, the Company implemented a sales policy based on the mandatory inclusion of Half Board in specific hotels located in Palma de Mallorca and Alicante, which generated additional income from F&B. Specifically, during the evolution of Q4, the celebration of some important events in Palma de Mallorca and Barcelona during October would also have contributed to the improvement of the results in the area. CENTRAL AREA - MADRID During Q4, October recorded strong results. However, in November and December there were no significant events, plus the traditional long bank holiday weekends of these two months were not as strong as in previous years. Nevertheless, aggregated figures in Madrid for 2016 showed significant improvements compared with last year, thanks to the positive trend in the Individuals segment and, to a lesser extent, in MICE activity. SOUTHERN SPAIN The Southern Spain area presents much better 12-month figures than last year for almost all hotels included herein, except for Meliá Lebreros (under refurbishment over the summer) and the Meliá Sol y Nieve (impacted by the slow Snow Season). In the latter case, it should be noted that bad results for January, February and March 2016 were partially offset by the very good snow season that started in December By destination, as we reported the year, good results were highlighted in: Granada: the destination benefitted from an intense congress activity, together with the recent refurbishment of the Meliá Granada hotel, including 80 rooms and its Garbo restaurant. Seville: excluding the impact of the Meliá Lebreros being closed for 2 months due to its refurbishment, the destination closed 2016 as an excellent year. Malaga: it became a hot-spot destination in summer NORTHERN SPAIN Of particular note are the performances of the hotels in Galicia, Bilbao and Zaragoza. The latter was impacted by the celebration of biennial trade fairs, especially during the first semester. Outlook Taking into consideration Meliá Hotels International s great exposure to Madrid, it is worth mentioning that January to March reported monthly figures above those for last year, recording particularly good numbers in January, noting that the high season within the Congresses & Events segment begins in late February. 17 In the eastern area, during Q it is expected that all hotels will report revenues above those for the previous year. It is worth mentioning the expected good performance of the hotels in Palma de Mallorca, especially of Innside Palma, which

18 underwent a rebranding process that will allow for a significant improvement in profitability. It is worth remembering that from Q2 onwards, the Company will rely on the contribution of the Palacio de Congresos in Palma de Mallorca, as well as of the adjacent hotel, Meliá Palma Bay. In the specific case of Barcelona, the MICE segment is expected to be the main driver of good results, taking into consideration the holding of the Mobile World Congress (February-March). In the southern region, Q points towards significant increases in rates. Although some destinations will suffer from the different calendar for the Eastern season (which took place in March 2016 and April 2017), the good performance of Ski Resorts, which are expected to contribute to results well above those for 2016, is highlighted. Regarding the outlook for hotels in northern Spain, looking at Q1, all cities are showing better results than the previous year, except perhaps Galicia, which will suffer due to the lack of the World Basket Cup, and Zaragoza, which will suffer the absence of the biennial fairs that took place in Q In this respect, the Company is working to attract additional groups to offset this natural drop in demand. Portfolio and pipeline During the last quarter, the Company disaffiliated the franchised hotel Tryp Segovia (150 rooms). Regarding the development of the Spanish Division (2 hotels and 328 rooms in the pipeline as at 31/12/16): - Last October, the Company was chosen to manage the new Palacio de Congresos in Palma de Majorca (Balearic Islands, Spain) and the adjoining hotel, the recently named Meliá Palma Bay, demonstrating Meliá s hospitality, industry leadership and strong reputation. - Additionally, last December the Company signed-off the new TRYP Santa Ponsa hotel on the Calviá coast of Majorca, an area in which Meliá Hotels International is the leading hotel chain. The new resort hotel, to be operated under the TRYP by Wyndham brand under a franchise agreement, will open in 2017 after its complete renovation. Gran Meliá Palacio de los Duques - One Bedroom Suite Madrid - Spain 18

19 CUBA FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues N.A. N.A Owned Leased Of which Room Revenues N.A. N.A. 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 26,2 19,1 38% Third Parties Fees 25,5 19,5 Owned & Leased Fees 0,0 0,0 Other Revenues 0,8-0,5 Owned Leased MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL CUBA ,3% -4,1 98,1 17,1% 65,0 10,3% TOTAL CUBA SAME STORE BASIS ,2% -4,2 98,4 17,3% 65,1 10,3% * Available Rooms 12M2016: 4,278.1k (versus 4,138.7k in 12M2015) in O,L&M CHANGES IN PORTFOLIO Openings between 01/01/ /12/2016 Hotel Country / City Contract # Rooms - Disaffiliations between 01/01/ /12/2016 Sol Pelicano Cuba Management 307 FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms TOTAL CUBA Management Franchised Owned Leased

20 Month Results The revenue generated by the Company in its Cuba Division continued to increase, reaching 26 million, +38% higher than the previous year. RevPAR growth reached 10.3% thanks to excellent improvements in rates (+17.1%), particularly in the four city hotels that the Company operates in Santiago de Cuba and, especially, in Havana. Providing that there is continuity in the normalisation of relations between the US and Cuba, in the latter quarter of the year 14 daily direct flights from USA to Havana were in operation. In addition to this, direct air operations were extended to Varadero, Santiago de Cuba, Holguín, Santa Clara and Camaguey. As a result of this increased connectivity and the enhancement of bilateral relations, the number of American arrivals to Cuba this year exceeded 284,000 visitors (+176% growth vs 2015), while the country reached the expected goal of 4 million arrivals, including all nationalities. Outlook Unless other changes occur in the US government s policy towards Cuba, the outlook for 2017 looks favourable for the continued expansion of tourism business in Cuba. January s preliminary data show a 10.1% growth in total revenues in Meliá s portfolio in Cuba. Both Havana and Varadero, the country s main tourist spots, show a steady dynamism in their occupations and average prices: a very good start for the high season. A preliminary estimate based on these trends allows us to assume that total revenues for Meliá Hotels International could have an additional mid-to-high single digit growth in Portfolio and pipeline Last October, the Company disaffiliated the Sol Pelicano hotel in Cayo Largo. In the country s pipeline are 3 hotels and over 2,000 rooms to be opened in 2018, while the country is considered a strategic focus going forward. Meliá Buenavista Cayo Santa María - Cuba 20

21 BRAZIL FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues 0,1 0,0 - Owned 0,0 0,0 Leased 0,1 0,0 Of which Room Revenues 0,0 0,0 - Owned 0,0 0,0 Leased 0,1 0,0 EBITDAR Split -2,3 0,0 - Owned 0,0 0,0 Leased -2,3 0,0 EBITDA Split -2,3 0,0 - Owned 0,0 0,0 Leased -2,3 0,0 EBIT Split -2,3 0,0 - Owned 0,0 0,0 Leased -2,3 0,0 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 4,2 5,3-21% Third Parties Fees 2,3 4,1 Owned & Leased Fees 0,0 0,0 Other Revenues 1,9 1,2 MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL BRAZIL 3,0% - 265,0-7,8-53,0% -1,9 78,7-9,9% 41,7-13,0% TOTAL BRAZIL SAME STORE BASIS ,4% -3,8 79,6-9,1% 42,5-15,2% * Available Rooms 12M2016: 6.6k (versus 0 in 12M2015) in O&L // 1,113.0k (versus 1,166.1k in 2015) in O,L&M CHANGES IN PORTFOLIO Openings between 01/01/ /12/2016 Hotel Country / City Contract # Rooms Tryp by Wyndham Pernambuco Brazil Franchise 192 Gran Meliá Nacional Rio Brazil Lease 413 Disaffiliations between 01/01/ /12/2016 Angra Marina & Convention Resort Brazil Management 200 FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms TOTAL BRAZIL Management Franchised Owned Leased

22 Month Results & Outlook 2016 was a particularly complicated year for Brazil due to the country s political and economic situation. The significant drop in demand caused a price war in the industry, which, for Meliá, led to a rate loss of around 10% compared with the previous year. It is important to mention that the Meliá portfolio in Brazil is mainly urban, so any reduction in corporate travel spending has a significant impact on hotels. It is also important to add that the Company s key accounts include state-owned businesses, which have also seen a reduction in hotel stays due to the political situation. In addition, high levels of inflation and associated increases in salary and energy costs have led to a reduction in profitability, even though margins are relatively high. During the last week of December, Brazil's central bank announced that the country's economy evolved during 2016 and especially during the last quarter at a "lower than expected" pace, therefore worsening its projections for 2016 and also for 2017, implying that the country's recovery will be more slow and gradual than expected. In terms of 2017, despite the reduction in GDP figures (that will reach +0.5% - +1%), the Central Bank estimates a better trend in inflation (around 5%), with the following also being key aspects in its economy: the evolution of the emerging markets, the standardisation process of the monetary conditions in the United States and the uncertainties of certain advanced economies. Meliá s budget for 2017 considers some sign of recovery mainly through price improvements and the contribution of an additional hotel in Rio, the Gran Meliá Nacional Rio, that partially opened last December, its full-opening being expected in the short term. Portfolio and pipeline Last December, the Company opened partially the Gran Meliá Nacional in Rio. This 413-room hotel is operated under a variable lease. The pipeline in Brazil includes 2 Innside by Meliá hotels and around 500 rooms under management to be opened in 2018 and Gran Meliá Nacional Rio de Janeiro - Deluxe Room Brazil 22

23 ASIA FINANCIAL INDICATORS 12M M2015 % CONSOLIDATED FIGURES mn mn change Total aggregated Revenues N.A. N.A. Owned Leased Of which Room Revenues N.A. N.A. 12M M2015 % MANAGEMENT MODEL mn mn change Total Management Model Revenues 6,8 5,4 25% Third Parties Fees 3,8 3,2 Owned & Leased Fees 0,0 0,0 Other Revenues 2,9 2,3 Owned Leased MAIN STATISTICS OWNED & LEASED OWNED, LEASED & MANAGED Occup. ARR RevPAR Occup. ARR RevPAR % Chg pts. Chg % Chg % % Chg pts. Chg % Chg % TOTAL ASIA ,8% 0,6 76,6-0,2% 47,4 0,8% TOTAL ASIA SAME STORE BASIS ,9% 2,1 81,7-2,5% 53,9 0,7% Indonesia ,9% -3,6 75,5-2,5% 46,0-7,9% China ,1% 3,7 79,0-4,0% 50,7 1,8% * Available Rooms 12M2016: 1,064.0k (versus 911.9k in 12M2015) in O,L&M CHANGES IN PORTFOLIO Openings between 01/01/ /12/2016 Hotel Country / City Contract # Rooms Sol Kuta Bali Bali, Indonesia Management 132 Meliá Makassar Indonesia Management 139 Meliá Yangon Myanmar Management 429 Sol Beach House Phu Quoc Vietnam Management 284 Disaffiliations between 01/01/ /12/ FUTURE DEVELOPMENT Current Portfolio Pipeline 2016YE 2015YE Onwards TOTAL Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms TOTAL ASIA Management Franchised Owned Leased

24 Month Results The Company is very proud of the results obtained in the Asia Pacific region, considering its operational results: showing positive figures in terms of RevPAR, and an impressive +25% improvement in total Management Model figures. At this stage, it is worth recalling that the results until December 2016 were mainly influenced by the opening of new hotels (some of them still in a ramp-up process) and the remodelling of a large number of rooms (sometimes penalising the global contribution). Also, however, taking into consideration that Melia s headquarters in Asia is near to achieving breakeven point, being able to cover its structure costs with the generation of Management Fees from Third Parties. The Company recalls that the headquarters in the area are considered highly necessary to meet the Company s expectations in terms of: a) results obtained by operating hotels; b) to fulfil the commitment made in terms of development; c) to ensure a fluent relationship between the Company and the main stakeholders, and d) to cope with the fastest-growing hospitality market in the world for inbound and outbound business. In this regard, taking into consideration the new projects in the pipeline, the Company expects that, going forward, new openings will help to enhance returns on investment and its global profitability. In an analysis by geographical area, we highlight the following points: INDONESIA: Indonesia is the most relevant Asian destination for Meliá due to the number of rooms in operation. In general terms, the evolution of hotel performance was impacted by the refurbishment of several hotels. However, a positive note in the country comes from the excellent performance of Melia Bali and Sol Beach House Benoa, as well as the positive evolution of Meliá Makassar, already ranked as the top hotel in the area, showing a positive GOP only 4 months after its opening. CHINA: The Company currently operates two hotels in the country, the Gran Meliá Xian and the Meliá Jinan, which have yielded very positive results during the period. The Company emphasises the importance of China not only as a receptive tourism market but also as a feeder market. In this regard, Chinese tourists will once again be travelling to Europe in 2017 and have chosen Spain as the most popular European destination for the Chinese New Year break, which begins on 28 January, according to Travel trends consultant ForwardKeys. In this regard, Meliá Hotels International will be ready to welcome them as part of an extensive growth and implementation strategy in the Chinese market. VIETNAM: In 2016 Vietnam showed the highest rates of growth in Melia s Asia portfolio. The progress made by the Meliá Hanoi Hotel has been particularly significant, while the ramp-up of the Meliá Danang has also been successful, allowing the Company to reach an agreement with the owner for an extension to its capacity. Portfolio and pipeline In Q4 2016, the Asia Pacific region added one new hotel, the Sol Beach House Phu Quoc. This is the Company s third hotel in Vietnam, a stable country with significant economic growth, where the Company maintains an excellent outlook for both hotels currently in business and those in the pipeline. On the other hand, the total APAC pipeline at year-end stand at 21 hotels, including the last sign-off during the last quarter of the year, the Meliá Bangkok (Thailand), with 315 managed rooms to be incorporated by Meliá Bangkok is Melia s first hotel in Bangkok and its second in Thailand, which was achieved thanks to the agreement with Asset World (TCCAW), a member of the TCC Group, one of the largest business conglomerates in Thailand, providing a significant boost to Meliá s 24

25 growth and expansion in Asia. Among the hotels in the pipeline, special mention should be made to the sign-off scheduled to open in 2017: - Meliá Shanghai Hongqiao (China) - Innside Zengzhou (China) - Meliá Pekanbaru (Indonesia) - Innside Yogyakarta (Indonesia) - Meliá Bandung (Indonesia) - Sol House Bali Legian (Indonesia), recently opened in February Furthermore should be recalled that in February 2017, the Company also announced the signing of Meliá Cam Ranh Bay Villas & Resort (non included in the reported pipeline), a brand new beachfront property in Vietnam. This new deal is in partnership with Saigon - Cam Ranh Joint Stock Company and will bring the group s number of current and future properties in Vietnam to five. This new property in Vietnam will follow the successful Meliá Hanoi and Meliá Danang, as well as the newly opened Sol Beach House Phu Quoc and recently signed Meliá Ho Tram. This new agreement continues to strengthen Meliá s presence in Vietnam, underscoring the company s management leadership and ability to cater to both the increasing demands of tourism and travel in the country. Sol House Bali Legian Indonesia 25

26 OTHER NON HOTEL BUSINESS 2

27 Club Meliá The year 2016 can be defined as one of transition in Club Meliá s business, which would result in a 12% fall in revenue. Club Meliá s efforts in 2016 were oriented towards implementing a series of initiatives framed within the Meliá Hotels International Strategic Plan. Among these, we highlight the following: A. Reorganisation and integration of operational and management structures: A more efficient use of our human resources will lead us to improve aspects of service and care for our Club members and, in turn, maximise our generation of income. B. Optimisation and standardisation of sales processes and capturing potential customers, in which the digitalisation of the commercial process is the pivot. C. Maximisation and arrangement of assets intended for the club activity: this has led us to vary the strategy related to the inventory and available-for-sale product, aligned with the overall strategy for the rotation and maximisation of Meliá assets. For this reason, at the Club, we focus our commercial efforts where we find greater and better opportunities for profitability, leading us to discontinue our commercial activities in Spain and Puerto Rico and reorder our commercial activity in Mexico and the Dominican Republic. D. Comprehensive inventory management: The flexibility with which Meliá can manage inventory availability as well as its agility in digital distribution processes are key elements for improving occupancy rates of the available inventory, as well as in the strengthening of REVPAR. In addition, during 2016, great efforts were dedicated to the conceptualisation and creation of a new commercial product offer. The new commercial product, called Circle, will replace the current Club Melia product, having commenced the transfer of customers from one product to the other. Circle is a new proposal to Club customers, focused on the world of our customers experiences and exclusivity and, in turn offers greater flexibility and variety of use, being fully aligned with the Meliá Rewards Loyalty programme. It was launched in December 2016 (in a first phase in the Dominican Republic) recording good results and awaiting its complete positioning on the market throughout Real Estate As reported in the 3rd quarter release, the Company recalls that in November 2016, Meliá Hotels International sold the room Sol Parque San Antonio resort, located in Puerto de la Cruz (Canary Islands, Spain), the only asset sale transaction in The transaction amounted to 8 million in cash and generated capital gains of approximately 4 million. Meliá Hotels International does not maintain the management of the hotel. On the other hand, it recalls that in 2015 the Company was very active in terms of asset rotation, the transactions being as follows: - The sale of 6 resort hotels into a new Joint Venture (80% Starwood Capital Group; 20% Meliá). This transaction generated million (net cash of approximately 150 M) and capital gains at the EBITDA level of 40.1 million. - The sale of the resort complex Calas de Mallorca (Majorca, Spain) with 875 rooms. The transaction amounted to 23.6 million and 3.3 million in capital gains. - The sale of the hotel Sol Falcó with 450 rooms (Minorca, Spain). The transaction amounted to 20 million and generated a capital gain of 3.9 million. Therefore, total Real Estate revenues in 2016 were 18 million versus 70 million in Going forward into 2017, the Company aims to make additional property sales from the limited number of non-core hotel 27

28 assets remaining in the group s portfolio, taking advantage of real estate cycles or further reinforcing the Joint Venture model as a dynamic and essential part of the Meliá strategy for the transformation of assets requiring significant investment. This will strengthen the Company s role as a hotel management company and enhance the quality of the properties operated under its respective brands. Overheads Recall that this item only includes the overheads in Meliá Hotels International. The evolution versus 2015 is mainly linked to: Extra costs -around 8 million Euros- linked to strategic projects included within the framework of the Strategic Plan , mainly related with I.T. The set up of a provisions of 3 million Euros linked to the variable remuneration of the senior management due to the Strategic Plan. The evolution of the onerous contracts that had an impact 2016 vs 2015 of around 4.5 million euros, taking into consideration that a contract becomes onerous when the inevitable costs of fulfilling the contractual obligations exceed the expected economic benefits. Estimated future results from rental agreements are reviewed annually based on expected cash flows from the relevant cash-generating units, applying a suitable discount rate. Should costs exceed benefits, the Group recognizes a provision for the difference. In this regards, the Company registered provisions in 2015 by 1.7 million Euros provision while in 2016 the Company has reduced provisions by 2.8. Meliá Palma Bay - Convention Center Mallorca - Spain 28

29 COMMITMENT AND CORPORATE SOCIAL RESPONSABILITY 3

30 Materiality Model Impacts Meliá Hotels International Meliá Hotels International aims to be considered a worldwide benchmark in excellence, responsibility and sustainability and to promote a long-term sustainable development model that ensures the creation of value for its stakeholders and contributes to improvements in society. The Materiality Analysis helps the company know more about the expectations, requirements and relevant issues for stakeholders and the annual contribution made by Meliá Hotels International in the different areas identified Business BUSINESS 1 Business performance and results 2 Sales channels CORPORATE GOVERNANCE 10 Transparency 11 Corporate governance Employer brand and talent 4 Stakeholder relationships 5 Innovation 6 Brand strategy and products 7 Financial solvency 8 Presence and growth 9 Quality of commercial offers CSR 12 Contribution to society 13 Action to combat climate change ENVIRONMENT 14 Technology and digilization 15 Travel insdustry and economic context 15 Environment 14 CSR Corporate Governance Material issues forming part of the strategic direction and stakeholder relationship model 1. BUSINESS PERFORMANCE AND RESULTS 1,805.5 M REVENUES (+4%) M EBITDA EXC. CAPITAL GAINS (+14%) 27 CONSECUTIVE QUARTERS OF REVPAR GROWTH (CAGR 10%) 2. SALES CHANNELS 50.7% REVENUES VIA CENTRALISED CHANNELS (+21%) 39.9% REVENUES VIA LOYALTY MEMBERS (+31%) 16.4 % GROWTH IN MOBILE SALES 3. EMPLOYER BRAND AND TALENT 44,405 EMPLOYEES (+5%) 71.4% OF MANAGEMENT POSITIONS COVERED INTERNALLY 30% EMPLOYEES < 30 YEARS OLD 16TH POSITION IN MERCO TALENT (+4 Pos.) TOP EMPLOYER CHINA 4. STAKEHOLDER RELATIONSHIP 17TH POSITION MERCO CORPORATE (+1 Pos.) TOP 100 MERCO LATAM 6.9 M# MELIÁREWARDS MEMBERS (+44%) 6,304 GLOBAL SUPPLIERS (+45%) 19,699 STAKEHOLDER NEWSLETTER IMPACTS 5. INNOVATION 5.1 M INVESTMENT (+15%) BEST STRATEGY IN SOCIAL MEDIA THE E-SHOW MADRID BEST BUSINESS IDEA KATMANDÚ PARK & RESORT 6. BRAND STRATEGY AND PRODUCTS 163 M INVESTMENT (+52%) BEST RESORT BRAND IN THE WORLD WORLD TRAVEL AWARDS ME LONDON BEST WOW EFFECT IN LUXURY HOTELS WORLD TRAVEL AWARDS 7. FINANCIAL SOLVENCY DEBT REDUCTION (-29%) SHARE PRICE (-9%) M NET PROFIT (+149%) TOP 3 BEST EUROPEAN INVESTOR RELATIONS TEAM 8. PRESENCE AND GROWTH PRESENCE IN 43 COUNTRIES 375 HOTELS 96,369 ROOMS 16 HOTELS OPENED 21 HOTELS SIGNED 9. QUALITY OF SALES OFFER 42.6% NET PROMOTER SCORE - NPS (+1%) 395 HOTEL AWARDS AND PRIZES LAUNCH OF NEW MELIA.COM 23 LANGUAGE VARIATIONS AVAILABLE ON MELIA.COM 10. TRANSPARENCY IBEX ROADSHOWS FTSE4GOOD IBEX INDEX MEMBER SINCE 2008 LLOTJA AWARD FOR BEST INFORMATION AND TRANSPARENCY CÁMARA DE COMERCIO DE BARCELONA" 11. CORPORATE GOVERNANCE 21ST POSITION MERCO CSR AND CORPORATE GOVERNANCE (+43 Pos.) 40% INDEPENDENT BOARD MEMBERS 234 INTERNAL AUDITS PERFORMED (+14%) 7.1% WOMEN PROMOTED 12. CONTRIBUTION TO SOCIETY + 700,000 FOR PROJECTS TO HELP CHILDREN M OF BUSINESS WITH LOCAL SUPPLIERS (+62%) BEST RSC PROJECT WORLD TRAVEL AWARDS" 13. ACTION TO COMBAT CLIMATE CHANGE CARBON DISCLOSURE PROJECT - CDP TOP IBERIA A- CARBON FOOTPRINT: TCO2 PER STAY (-3%) 54% PORTFOLIO CERTIFIED HOTELS (+8%) ELECTRICITY USE PER STAY (-12% Kwh ) WATER USE PER STAY (-8% m3) KGC02 USE PER STAY (-12% ) FUEL USE PER STAY (-7% kwh) 14. TECHNOLOGY AND DIGITALISATION 24.2 M INVESTMENT IN TECHNOLOGY (+37%) BEST CORPORATE DIGITAL TRANSFORMATION DIGITAL EUROPEAN MINDSET AWARDS DIGITAL TALENT AWARD ACCENTURE STRATEGY & EL ECONOMISTA 15. TRAVEL INDUSTRY AND ECONOMIC CONTEXT PRESENT IN THE MOST IMPORTANT INDUSTRY FORUMS 28.7 M# HOTEL STAYS (-4%) 83% NON-SPANISH CUSTOMERS (-1%) 30

31 FINANCIAL STATEMENTS 4

32 INCOME STATEMENTS Revenues It is worth noting the 3.9% increase in consolidated revenue, despite the strong comparable caused by capital gains from asset rotation in the previous fiscal year that led to almost 52 million less in revenue in the Real Estate Division. Excluding this effect, revenue increased by +7% (+ 118 million), almost entirely explained by the improvement in the hotel business that generated an additional 139 million over the same period last year, thanks to a RevPAR increase of 8.8%, over 85% of which is explained by price increases. Operating Costs Total operating costs increased by +4.2% compared with the previous year. The increase in Raw Materials, Personnel and Other Expenses were 3.7%, 5.7% and 3.3%, respectively. Excluding mainly the perimeter changes, the variations were -0.4%, +3.7% and 0%, respectively. An increase in rental expenses of 19.9 million can mainly be explained by the sale & leasebacks signed last year (Sol Falcó and Calas de Mallorca), and new hotels incorporated, which jointly contributed by 14 million. New contracts are as follows: Meliá La Defense, Innside Manchester, Sol Costa Atlantis, Innside New York NoMad, Me Milan II Duca, Innside Düsseldorf Hafen, Innside Aachen and Innside Leipzig, all of which were signed in 2015 and It is also important to recall that improvements in operations reduced the existing provision related to onerous contracts by 2.8 million (in comparison with an increase of 1.7 million the previous year), while the integration of Meliá Milano in 2015 allowed for a saving of 1.3 million. EBITDA EBITDA was down -2.6% from the previous year. Excluding capital gains for asset disposals, EBITDA was up +13.7%. Amortisation and Depreciations: This item improved by 19.3 million (14.9%) compared with the previous year and is explained by the accounting of an impairment - In the Puerto Rico property - in 2015 ( 28.6 million), as well as changes in the perimeter. Additionally, certain extraordinary items affected the line: a) an extraordinary amortisation of 3.9 million in the Company Inversiones Hoteleras La Jaquita (owner of the hotel Gran Meliá Palacio de Isora), which corresponds to the amortisation of hotel rooms that were previously used by the Club Meliá division and have now been returned to the hotel; b) an additional amortisation by 2.2 million linked to digitalisation projects; and c) the accounting of the amortisation in the Puerto Rico property corresponding to 2015 and 2016, given that in 2015 it was included as a Discontinued Operation. EBIT: +7.2% compared with the previous year. Excluding capital gains and impairment, EBIT grew by +16.8%. Result of the entities valued by the participation method: there was an increase of million due to business improvements in the JVs, especially through Evertmel (Calviá Beach Project), Tertian XXI and Starwood. Result attributed to the Parent Company: million, +180% compared with last year. 32

33 4Q2016 4Q2015 (Million Euros) December 2016 December 2015 Revenues Split: 424,9 375,2 Total HOTELS 1.869, ,5 70,5 51,8 Management Model 283,2 234,2 336,5 307,2 Hotel Business Owned & Leased 1.508, ,7 17,9 16,2 Other Hotel Business 77,3 69,6 9,3 12,1 Real Estate Revenues 17,7 69,9 30,5 30,1 Club Meliá Revenues 98,8 112,2 42,7 34,7 Overheads 130,4 125,5 507,3 452,1 Total Revenues Aggregated 2.115, ,1-90,2-66,5 Eliminations on consolidation -310,5-269,9 8,2% 417,1 385,7 Total Consolidate Revenues 1.805, ,2 3,9% -50,7-49,9 Raw Materials -222,8-214,8-120,7-110,8 Personnel expenses -489,7-463,3-163,3-155,6 Other operating expenses -643,7-623,3-334,6-316,3 Total Operating Expenses , ,4 18,9% 82,5 69,4 EBITDAR 449,3 436,8 2,9% -35,1-33,7 Rental expenses -163,7-143,7 32,9% 47,3 35,6 EBITDA 285,6 293,1-2,6% -25,0-20,9 Depreciation and amortisation -109,8-129,1 51,4% 22,3 14,7 EBIT (OPERATING PROFIT) 175,7 163,9 7,2% -7,7-15,8 Financial Expense -42,1-70,7 0,1-2,3 Other Financial Results 7,7 1,8 5,4 7,9 Exchange Rate Differences 4,7 10,4-2,3-10,3 Total financial profit/(loss) -29,7-58,5-2,9-0,9 Profit / (loss) from Associates and JV 1,6-3,8 379,2% 17,1 3,6 Profit before taxes and minorities 147,6 101,6 45,2% -12,0-22,0 Taxes -44,6-61,1 5,1-18,4 Group net profit/(loss) 102,9 40,5-3,4-1,6 Minorities 2,3 4,5-8,5-16,9 Profit/(loss) of the parent company 100,7 36,0 179,9% Meliá Zanzibar - Jetty Entrance Tanzania 33

34 Balance Sheet Please find the main highlights below: Assets An increase in Tangible Assets to million, essentially explained by: a) normalised amortisations during the period ( million); b) conversion differences ( million) from the variations in exchange rates (mainly the Mexican Peso, Dominican Peso, Venezuelan Bolivar and Pound Sterling); c) the amount of investments made ( 83.7 million); d) an increase of 14.4 million due to the return of time share units to the hotel Gran Melia Palacio de Isora (previously mentioned in the P&L chapter); e) the consolidation of the Company owner of the New Paradisus Los Cabos by 105 million. Decrease in Inventories of million, mainly due to the return of time share units to the hotel business. (Million Euros) Dec 2016 Dec 2015 ASSETS NON-CURRENT ASSETS Goodwill 60,8 61,0 Other Intangibles 109,3 97,7 Tangible Assets 1.693, ,0 Investment Properties 141,1 139,1 Investments in associates 190,1 179,4 Other non-current financial assets 209,9 231,3 Deferred tax assets 135,9 132,2 TOTAL NON-CURRENT ASSETS 2.540, ,7 5,0% CURRENT ASSETS Inventories 64,0 81,5 Trade and other receivables 236,0 254,5 Tax assets on current gains 29,6 28,6 Other current financial assets 51,5 30,2 Cash and cash equivalents 366,8 348,6 TOTAL CURRENT ASSETS 747,8 743,3 0,6% TOTAL ASSETS 3.288, ,0 4,0% Sol House Taghazout Morocco 34

35 Liabilities The increase in Equity Attributable to the Parent Company is due to the capital increase made in Q2 2016, with the aim of covering the conversion of the Convertible Bond issued in The decrease in Provisions of million was mainly motivated by a tax inspection in 2015 paid in The increase in Trade and other payables of 53.5 million is linked to higher investment suppliers. (Million Euros) Dec 2016 Dec 2015 EQUITY Issued capital 45,9 39,8 Share premium 1.121,1 877,3 Reserves 342,6 296,8 Treasury shares -14,3-39,9 Results from prior years 312,2 301,4 Other equity instruments 0,0 108,7 Translation differences -385,5-353,8 Other adjustments for changes in value -2,5-2,8 Profit attributable to parent company 100,7 36,0 EQUITY ATTRIBUTABLE TO THE PARENT CO , ,6 Minority interests 43,3 50,9 TOTAL NET EQUITY 1.563, ,5 18,9% NON CURRENT LIABILITIES Issue of debentures and other marketable securities 47,8 223,1 Bank debt 570,9 494,9 Other non-current liabilities 13,8 16,4 Capital grants and other deferred income 28,6 29,1 Provisions 35,6 49,5 Deferred tax liabilities 184,7 161,7 TOTAL NON-CURRENT LIABILITIES 881,4 974,7-9,6% CURRENT LIABILITIES Issue of debentures and other marketable securities 39,5 115,0 Bank debt 251,0 284,4 Trade and other payables 450,8 397,3 Liabilities for current income tax 33,2 26,1 Other current liabilities 68,9 51,0 TOTAL CURRENT LIABILITIES 843,4 873,8-3,5% TOTAL LIABILITIES AND EQUITY 3.288, ,0 4,0% Meliá Palma Bay - Pool Terrace Majorca, Spain 35

36 FINANCIAL RESULTS & DEBT Financial Results Financial results have improved by 49.2% compared with the previous year ( million) mainly due to: a) a reduction in bank financing of 28.6 million, driven by a lower gross debt and a decrease in the average interest rate, thanks to successful debt renegotiations and maturities with a higher interest (average rate 2016: 3.46% vs 4.36% in 2015); b) a better result in Other financial results, mainly due to the agreement between CIO Group and Meliá Hotels International related to the contract termination of the Gran Hotel Bahia del Duque, partially offset by the accounting of interest from the tax audit reported in the 2015 year-end results; c) Exchange Rate differences of million, mainly due to the appreciation of the US dollar against the Euro, and the depreciation of the Pound, partially offset by the appreciation of the dollar against the Mexican Peso and the Brazilian Real against the Euro. 4Q2016 4Q2015 (thousands euros) dic-16 dic Exchange differences (7.738) (15.849) Borrowings (42.120) (70.707) (3.226) (7.359) Interest Capital Markets (13.203) (29.824) (4.512) (8.490) Interest bank loans and others (28.917) (40.883) 84 (2.326) Other financial incomes (2.282) (10.267) Net Financial Income (29.743) (58.542) Debt The Company s net debt has reduced since December 2015 by 226 million, reaching million. This debt reduction is mainly attributed to the amortisation of the convertible bond, as well as the favourable evolution of the Cash Flow from Operations. Million Euros 36

37 Cash Flow Statement The cash flow from operations reached 257 million Euros and includes the capital gains generated by the sale of the Laundromat and the hotel Sol Parque San Antonio (6 million Euros), as well as the payment of extra taxes result of an inspection to verify compliance with tax obligations and duties over the period This way, the cash flow from operating activities increased by 45 million Euros versus The flow of Cash Investment (-189 million Euros) is mainly attributed by investments in Capex of Maintenance around 138 million Euros together with purchase of the Paradisus Los Cabos (and the amount committed to its refurbishment). The Cash flow from financing activities (-43 million Euros) does not include the capital increase to cover the anticipated conversion of the convertible bond, since the presentation of the Cash Flow Accounts in Melia Hotels International is done using the direct method criteria which only includes the issue and amortization of debt as well as the interest paid. CASH FLOWS FROM OPERATING ACTIVITIES 257,1 Proceeds from operating activities 311,7 Proceeds / (payments) from profit taxes -54,6 Other proceeds / (payments) from operating activities 0,0 CASH FLOWS FROM INVESTING ACTIVITIES -189,0 Payments for investing activities: -260,4 Companies of the Group, associates and business units -114,3 Fixed assets, intangible assets and property investments (Company Gross Capex) -138,3 Other financial assets -7,8 Other assets 0,0 Proceeds on sale: 69,8 Companies of the Group, associates and business units 36,2 Fixed assets, intangible assets and property investments 29,0 Other financial assets 4,6 Other assets 0,0 Other cash flows from investing activities: 1,5 Proceeds from dividends 1,5 Proceeds from interests 0,0 CASH FLOWS FROM FINANCING ACTIVITIES -43,4 Proceeds and (payments) for equity instruments: -3,9 Issue 0,0 Amortisation 0,0 Acquisition -3,9 Sell 0,0 Proceeds and (payments) for financial liabilities: 9,3 Issue 358,2 Repayment and Amortization -348,9 Dividends paid and payments for other equity instruments: -12,4 Other cash flows from financing activities: -36,5 Interest paid -38,5 Other proceeds and (payments) from financing activities 1,9 EFFECT OF EXCHANGE RATE CHANGES -6,5 NET INCREASE IN CASH AND CASH EQUIVALENTS 18,2 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD 348,6 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR PERIOD 366,8 37

38 MELIÁ ON THE STOCK MARKET 5

39 Stock Market The stock price decreased by -9.0% in The Ibex Medium Cap decreased by -6.6% and the Ibex 35 by -2.0% 1Q2016 2Q2016 3Q2016 4Q Average daily volume (thousands shares) 1.382, ,7 607,8 468,0 862,4 Meliá performance -15% -7% 15% 0% -9% Ibex Medium Cap performance -9% -8% 8% 3% -7% Ibex 35 performance -9% -6% 8% 7% -2% Number of shares Average daily volume (thousands shares) 862,44 980,10 Maximum share price (euros) 11,82 13,71 Minimum share price (euros) 8,42 8,73 Last price 11,08 12,18 Market capitalisation (millions euros) 2.545, ,47 Dividend (euros) 0,04 0,03 Source: Blomberg NOTE: Meliá's shares are listed on the Ibex35 and FTSE4Good Ibex index Main Highlights: On May 2016, 30.6 million newly-issued ordinary shares to attend the conversion of the convertible bond were admitted to trading to the Spanish Stock Exchanges. On July 19th, dividends were paid out. On August 8th, the Company was included in the IBEX35 Index. On January 13th 2017, the Company has signed a stock liquidity agreement with the aim to provide to Meliá stock a higher liquidity and higher attractiveness for investors. 39

40 Annex BUSINESS SEGMENTATION OF MELIÁ HOTELS INTERNATIONAL 12M 2016 TOTAL HOTELS REAL ESTATE CLUB MELIA OVERHEADS TOTAL AGGREGATED Eliminations on Consolidation TOTAL CONSOLIDATED REVENUES (310) EXPENSES (306) EBITDAR (39) 454 (5) 449 RENTALS (5) 164 EBITDA (43) D&A EBIT (57) M 2015 TOTAL HOTELS REAL ESTATE CLUB MELIA OVERHEADS TOTAL AGGREGATED Eliminations on Consolidation TOTAL CONSOLIDATED REVENUES (271) EXPENSES (266) EBITDAR (23) 442 (5) 437 RENTALS (5) 144 EBITDA (29) 293 (0) 293 D&A (1) (0) 129 EBIT (42) 164 (0) 164 Gran Meliá De Mar - Bardot Pool Mallorca, Spain 40

41 CONSOLIDATED FLOW THROUGH AND MARGINS EVOLUTION CONSOLIDATED P&L ACCOUNT mn mn Revenues 1.805, ,2 Operating expenses (1.356,2) (1.301,4) EBITDAR EBITDAR Margin 24,9% 25,1% Rentals (163,7) (143,7) EBITDA 285,6 293,1 EBITDA Margin 15,8% 16,9% P&L adjusted by: a) ex- capital gains on asset rotation ( mn Euros; mn Euros) b) excluding the reversal of onerous lease contracts (2016 2,8 mn Euros; mn Euros) CONSOLIDATED P&L ACCOUNT EXCLUDING CAPITAL GAINS AND THE REVERSAL OF ONEROUS CONTRACTS Chg Flow Through mn mn mn % Revenues 1.797, ,4 117,5 Operating expenses (1.354,7) (1.290,9) (63,8) EBITDAR 443,2 389,5 53,7 46% EBITDAR Margin 24,6% 23,2% 1,5% Rentals (166,5) (142,0) (24,5) EBITDA 276,7 247,5 29,2 25% EBITDA Margin 15,4% 14,7% 0,7% ADJUSTED CONSOLIDATED P&L Chg Flow Through mn mn mn % Revenues 1.484, ,1 56,4 Operating expenses (1.114,4) (1.093,2) (21,2) EBITDAR 370,1 334,9 35,2 62% EBITDAR Margin 24,9% 23,4% 1,5% Rentals (124,4) (117,6) (6,8) EBITDA 245,7 217,2 28,4 50% EBITDA Margin 16,6% 15,2% 1,3% P&L adjusted by: a) ex- capital gains on asset rotation b) excluding the reversal of onerous lease contracts c) based on Same Stores Sales (excluding openings, disaffiliations and majors refurbishments) d) excluding Sol Caribe Tours business (T.O. bases in LatAm with a high volume of revenues but low margin) e) excluding some expenses (11,5 mn Euros) at the Corporate level related with the Strategic Plan (mainly IT) 41 Meliá Palma Bay - Room Majorca, Spain