NH Hoteles : shows a positive evolution in second quarter...

• The Company anticipates that the second quarter of 2014 will be the strongest since 2011 and expects ending the year with an EBITDA growth between 5% and 10%

• The chain has evidenced a turnaround in the RevPAR mix, which was driven by growth in the ADR in the second quarter

• Federico Gonzalez Tejera spoke of strong progress executing all the initiatives contemplated in the Business Plan, highlighting the new brand architecture, gradual rollout of the new operational promise, hotel repositioning, full delivery of the lease target reduction for 2013 and the exit of 25 hotels to date

NH Hotel Group held its Annual General Meeting today at the NH Collection Eurobuilding. At the meeting, the Company's CEO, Federico González Tejera, weighed up the Group's performance last year and so far in 2014, emphasising the progress made on delivering the targets contemplated in its Business Plan. The Company's shareholders ratified different resolutions during the meeting, notably approving the 2013 financial statements, the change in registered business name to NH Hotel Group S.A. and the issuance of 42 million shares, under the terms of the agreement entered into with Banca Intesa in April of this year.

González Tejera highlighted the Company's recent earnings momentum and the favourable trend in the key metrics that track the performance of the hotel business in 2013, a year of transformation and financial restructuring for the Group, which have been further validated by the encouraging data registered during the first part of 2014.

In this sense, the Company said that the second-quarter trend in RevPAR (revenue per available room) was the most encouraging since the start of the recovery (growth of 3.5%), driven by growth in the ADR (average daily rate) of 1.4%, following two years of contraction. The renewed growth in average prices marks the beginning of a turnaround in the RevPAR mix, growth in which had been purely driven by firming occupancy rates until now. NH is therefore in a position to reiterate its full-year guidance for growth of between 3% and 5% in RevPAR and between 5% and 10% in EBITDA.

Five-year plan
The CEO focused his speech on outlining the solid progress already made on delivering all of the initiatives contemplated in the five-year Business Plan, describing its positive impact on the market, by generating renewed investor confidence, and among consumers, who are reacting positively to the improvements made.

Along this line, and inspired by the value proposition designed for consumers, NH is gradually deploying a new brand architecture, which, under the umbrella NH Hotel Group brand, encompasses the NH Hotels, NH Collection, nhow and Hesperia Resorts trademarks. All these brands have been built on the basis of a solid operational promise, that also incorporates the new core elements which comprise the hotels basic offering (Brilliant Basics). So far 17,400 mattresses have been replaced with new ones designed exclusively for NH, 14,500 television sets have been replaced with next-generation LED TVs. Also, 19,000 showers have been upgraded and 16,500 professional hairdryers and 6,000 Nespresso coffee machines have been added to the rooms.

Furthermore, the Company has reinforced its communication effort by stepping up its marketing spend by €6m, an initiative which has enabled the relaunch of the loyalty program, NH Rewards, which has seen growth in membership of 13% as a result, as well as the rollout of a new international advertising campaign ("NH It´s me") targeted at increasing brand recognition. Meanwhile, the sales department has been reorganised and a new pricing strategy deployed, city by city, for each class of room and hotel. The plan is to roll this strategy out across all the Group's establishments by November 2014.

In terms of the asset repositioning plan, by the end of 2014 the Group will have repositioned 30 hotels. The works at four establishments are already complete and tests are showing an improvement in consumer perception at these hotels: the NH Alonso Martínez (Spain), NH Firenze (Italy), NH Neue Messe and NH Berlín Mitte (Germany). The establishments for refurbishment are being prioritised on the basis of scope for greatest upside in average daily rates.

As for asset management, Gonzalez Tejera underscored that the Company has identified 25 hotels that no longer offer a strategic fit with NH. The Group has exited these properties between 2013 and 2014, and has also accomplished the 2013 lease reduction target of €16.5m in full.

Turning to the Group's digital strategy, NH's CEO spoke of a significant reduction in agency fees as well as redefinition in parallel of the commercial website, which is being upgraded to introduce new functionality and design while simplifying the purchase process. The new platform will be ready in August or September.

On the other hand, the Company has prepared a growth plan in strategic markets in Europe and Latin America, that also defines the standard product and location parameters that will shape and complete the Group's portfolio medium term.

Lastly, the CEO highlighted the work performed on the IT and HR fronts. In terms of IT, the Group's systems have been transformed by migration of the Business Unit finance, purchasing and HR areas over to SAP and the implementation of the new CRM. In terms of management of its human capital, the Group's strategy is underpinned by a comprehensive communication effort, training, cultural transformation and the promotion of talent.

About NH Hotel Group
NH Hotel Group (www.nh-hotels.com) is Europe's third-ranked business hotel chain. It operates close to 400 hotels with almost 60,000 rooms in 28 markets across Europe, the Americas and Africa, including top city destinations such as Amsterdam, Barcelona, Berlin, Bogota, Brussels, Buenos Aires, Düsseldorf, Frankfurt, London, Madrid, Mexico City, Milan, Munich, New York, Rome and Vienna.