Meliá Hotels International, S.A. (MEL) Earnings Call Transcript & Summary

[indiscernible] to start with the general shareholders' meeting. And if you're okay with this, we're going to start with [indiscernible]. The call for this meeting has been published on the official gazette of the commercial registry on the fourth of April 2024. It was communicated as other relevant information to the National Commission for the value market with #27577 [ 20 03 2024, ] and it is available on the website of the company from the same date, including the full tax of the proposed resolutions and other information that will be submitted to the General Shareholders' Meeting. Likewise, all the members of the Board of Directors are attending in person and the Secretary of the Board of Directors Mr. Luis María Díaz de Bustamante y Terminel [indiscernible] also Secretary of the general meeting. List of shareholders who are present in person or by proxy at this meeting will be read by the Secretary, the Secretary has the floor.

Many thanks, Mr. Chairman and the Board, and good morning, ladies and gentlemen, shareholders. Previously, and as you all know, pursuant to the provisions of Article 22.9 of the company bylaws and Articles 19.3 and 6.1 of the regulations of the General Shareholders' Meeting, the Board of Directors agreed that the attendance at the meeting could also be made in addition to in-person by means of telematic attendance. And the telematic voting of the proposed resolutions, which has been the case, enabling to descend the corresponding platform for Telematic participation at the meeting. As well as the electronic shareholders' forum in order to allow the telematic exercise of the right to speak, information, proposal, voting attendance and delegation of vote of shareholders, promoting as far as possible telematic participation in attendance to the general meeting. Having said that, the share capital of Meliá Hotels International SA is EUR 44,080,000 million represented by 220,400,000 ordinary shares of a single class in series with a par value of EUR 0.20 each fully subscribed and paid and represented by book entry. Provisional quorum data at this time is as follows. We have here -- this meeting, 71 shareholders were holders of 122,281,738 shares and attending the meeting in person. We have 150 shareholders holders of 55,085,018 shares and are attending the meeting by proxy. Therefore, we have 54% of the subscribed share capital with voting rises attending the meeting. I presented that exceeds the [indiscernible] Article 20 for the company bylaws in Article 193 of the consolidated text and the Corporate Enterprises Act. A definitive quorum data will be confirmed later and during the meeting. The number of treasury shares with our voting right is 186,014 shares. Likewise, there is no record at the Secretary's office that's in the call of this general meeting within the period legally established for this purpose. Any request has been made with the publication of a supplement to the call notice of meeting for the submission of substantiated proposals for resolutions on the agenda in accordance to the right run to shareholders for this purpose by law. Accordingly, and pending final confirmation of the quorum data, which will not change substantially the quorum necessary for the valid constitution of the meeting pursuant the Article 24 of the company bylaws and Article 193 of the Corporate Enterprises Act has been met. Treasury shares have been considered in order to calculate the percentages necessary for the constitution and adoption of resolutions at the general meeting, notwithstanding the fact that no voting rights are attached to them. Likewise, the notary public of Palma and member of the Official Association of notary public of the Balearic Islands, Mr. [indiscernible] is attending the meeting in person who in accordance to with the provisions of Article 29.3 of the company bylaws and Article 21.3 of the regulations of a General Holders Meeting and Pursuant Article 103 of the corporate enterprises law in force as the shareholders were already informed through the notice of the call meeting has been required by the Board of Directors to attend the session and draw up a notarial record of the Ordinary General Shareholders' Meeting according to the provisions of Article 101, 102 and related articles of the [indiscernible]. According to the provisional data provided by Mr. Secretary and [indiscernible] the subsequent confirmation of the definitive data, this quorum as referred to the company bylaws and the company Enterprises is at present largely met. Therefore, the ordinary general shareholders' meeting is validly constituted at first call. [indiscernible] Public, please check if there are objections or protests to the above statements regarding the value constitution and the meeting and the number of shareholders with voting rights attending the meeting in person or by proxy and their shareholding in their share capital. The amount of the EUR 0.0935 processed for each share of the company entitled to receive it. The maximum amount to be distributed being EUR 20,603,450.42 across. If distribution were to be made in favor of all the company's ordinary shares. The dividend will be paid on July [indiscernible] auditors of the company and group. It is proposed to reelect Deloitte SL for 2024, 2025 and 2026. With regards to the directors' remuneration policy for financial years 2025, 2026 and 2027. It is proposed to approve set policy as well as to determine the maximum amount for the remuneration of the directors in their capacity as such. In addition, the annual report on the remuneration of directors will be submitted to you for an advisory vote. Likewise, you will be provided with the information on the commercial paper program. Finally, the usual delegation of powers for the implementation of the resolutions adopted by the general meeting is proposed. In summary, ladies and gentlemen, shareholders, these are the resolutions submitted by the Board of Directors for your approval. Now with the permission of Mr. Chairman and in accordance with the best corporate governance practices, the outgoing Chairman of both committees will speak. Mr. [indiscernible] for the Auditing and Compliance Committee; and successively, Mr. [indiscernible] for the appointment Remuneration and Sustainability Committee. To report on the activities and functions of both commissions during financial year 2023. Thank you very much, ladies and gentlemen, shareholders and Mr. Chairman. The Director, Mr. [indiscernible], as the outgoing Chairman of the Auditing and Compliance Committee has the floor. Please, Mr. [indiscernible], you have the door.

Thank you, Mr. Chairman. Good morning, ladies and gentlemen, shareholders and all those present. I am addressing you as outgoing Chairman of the Auditing and Compliance Committee of Meliá Hotels International S.A. The committee that, as you know, is responsible enter [indiscernible] for ensuring the monitoring of preparation and submission processes of financial and nonfinancial information of the company, as well as the effectiveness of its internal control systems and the management of the risks facing it. As you know, at the meeting of the Board held up on 29th of February 2024, Mrs. [indiscernible] was appointed as the new Chairwoman of this committee. And I would like to take this opportunity which are every success in this new phase and reiterate my full support in the performance of her duties. With this appointment, this committee is now made up of 5 members: 4 female directors and 1 male Director all of them independent. During 2023, the committee held a total of 8 meetings, at which the external auditor was always present. So with the appropriate means and sufficient time was able to directly inform the Directors of this committee with complete independence of everything he considered. Likewise, at all the meetings, the directors of the internal audit and the risk and compliance areas of the company have been able to participate and directly inform this committee of the main control and monitoring recommendations that they have freely considered. In addition, at the meetings held, the processes for preparing the financial and nonfinancial information presented to the market were analyzed. Likewise the company's main executive have attended several meetings of the committee to report on relevant issues under their responsibility as well as on the action plans established to mitigate the company's main risks. I am pleased to inform you that the annual accounts that are being presented today and which were prepared according to the international accounting standards are unqualified. Furthermore as explained by the Chairman and CEO during his speech, the Board of Directors has decided this year, and for the first time since 2019, to propose to the general shareholders meeting the distribution of dividend. The Auditing and Compliance Committee has fully supported this decision, and we are confident that the shareholder remuneration policy can be consolidated in the following years. Now let me briefly summarize the main activities carried out by the committee within the scope of its responsibilities, activities that are detailed in the activity annual report for the Auditing and Compliance Committee, which is available on the corporate website for all of you. During this year, the committee has maintained a regular and recurrent follow-up of all the matters relating to the management of the economic and financial situation of the company. In particular, the committee has reviewed and followed up on the equity transaction with Banco Santander, which has been published both in February and April 2024 in the C&ME. The committee's relationship with the external auditor in addition to ensuring the proper performance of its duties for the company has focused on the development and monitoring of the selection processes of the external auditor for fiscal years, next years 2022 to 2026. This proposal the proposal of which is submitted for approval at this General Shareholders' Meeting. You should also be noted that the external auditors letter of independence have been received and the corresponding independent report has been drawn up. The external auditor's recommendation in relation to the annual accounts, the internal control systems over financial reporting, ICFR, from now on, and nonfinancial information statement have also been followed up. The committee has been carried out a timely analysis and review our quarterly, half-yearly and annually. And the information and the description of the internal control systems or financial reporting, ICFR, prior submission to the Board for approval. The commission -- sorry, the committee has also monitored the processes linked preparation of the nonfinancial information statement for its inclusion and the management report and the subsequent approval altogether with the annual accounts. In this regard, we must highlight the attention given by this committee during 2023 in the definition and development of the internal control system over nonfinancial information project. The project, for which the company has relied on the experience of our renowned consultant KPMG, as external adviser, reinforcing the alignment with existing best practices and thereby ensuring the integrity of the nonfinancial information. With regard to the corporate governance, the committee has focused on the review of the company's updated information security policy and the new policy on the responsible use of artificial intelligence tools. As regards internal audit, in addition to ensuring its structure, resources and compliance with its annual plan, the committee has continued to encourage the consolidation of this area transformation plan initiated in April 2021 with special attention to the digitalization of the department and the follow-up of the recommendations need and their level of resolution. Finally, in relation to risk management and compliance, it should be noted that the results of the update of the company's risk map has been analyzed, and the prime provision and detection model has been reviewed. Also providing continuous monitoring of the functioning of the compliant channels and their management by the company's ethics meeting. I would like to end my speech by thanking on my own behalf, on behalf of the incoming Chairwoman and on behalf of all the members of this committee, the Meliá's management team for its support and dedication during this year, firmly led by its Chairman, Mr. Escarrer. Of course, both the current Chairwoman of the committee, Ms. [indiscernible] and myself remain at your disposal for any clarification you may need.

Many thanks, Mr. [indiscernible], and welcome to Mrs. [indiscernible] as the new Chairwoman of the Committee. Mr. [indiscernible] as the outgoing Chairman of the Appointment for Remuneration and Sustainability Committee has the floor. Please, Mr. [indiscernible].

Good morning, ladies and gentlemen, shareholders. Thank you, Mr. Chairman. I am addressing you as outgoing Chairman of the Appointment Remuneration and Sustainability Committee of Meliá Hotels International. The Board's Committee, which is responsible, among other functions for and sharing the appropriate composition of the Board and its committee and of the company, senior management and also ensuring that Meliá's implemented a competitive remuneration policy in order to retain internal talent and periodically review the assessment of the objectives and the parameters, which are part of the remuneration scheme of the Executive Director and the senior management. In addition, this committee is also responsible for monitoring the strategy and practices in terms of sustainability, assessing their degree of compliance. As you will be aware, at the meeting of the Board held on February 29, 2024, [indiscernible] appointed as the new Chairwoman of this committee. And I would like to take this opportunity to wish her every success in this new phase and give her my full support in the performance of her duty. During 2023, the committee, which is currently made up of 5 members, all of them being independent directors and one proprietary director held a total of 7 meetings. Regarding the activities carried out by the committee during 2023, I would like to highlight the committee's dedication to the coordination and monitoring of the succession plan for the Chairman of the Board of Directors of Meliá, approved by the Board in December 2016. It has been a high responsibility for me. And for all the members of this committee to have participated in this process and to have participated in the highly relevant process in the company's history. Now I will briefly summarize the main activities carried out by the committee within the scope of its responsibility. Activities that are detailed in the activity annual report, which is available to shareholders on the corporate website. With regards to appointments and reelections and following the recommendations of the good corporate governance code and in order to proceed with the utmost rigor and transparency, the committee prepared, in 2023, the report on the proposal of the appointment of Mr. Alfredo Pastor Bodmer as the External Proprietary Director. The proposal for the reelection of Mrs. [indiscernible] as Independent Director and the report on the reelection of Mr. Gabriel Escarrer Julia as Proprietary Director. Likewise, and within the framework of the aforementioned succession plan initiated in 2016, the committee drew up the proposals or the appointment of Mr. Gabriel Escarrer Julia as Honorary Chairman and Mr. Gabriel Escarrer Jaume as new Executive Chairman. On the other hand, the committee has also been actively involved in the process of renewal of the company's senior executive team, SET. Monitoring the proposal for change that were carried out in 2023. I would also like to highlight the promotion by the committee of Diversity through its participation in the drafting of a new diversity policy as well -- as a follow-up, the recommendations and objectives set by the company in this area. This regard committees where the 40% target established the new diversity policy. And therefore, wants to emphasize in its willingness to continue working on the incorporation of more women on the board in future selection processes. In this sense, the Board is made up of 36.36% of female directors and both, it is exceed 40%. Auditing and Compliance Committee is made up of 80% of independent female directors. And the Appointment, Remuneration and Sustainability Committee of 60%. Furthermore, those committees are chaired by female Director. In terms of remuneration, the committee has reviewed and assessed the objective link to the short-term variable remuneration of the Executive Chairman and CEO for 2022 and has set the objectives of the short-term variable remuneration for 2023 [indiscernible] on the provisions of the remuneration policy for 2022 to 2024. In setting these objectives and in line with the company's strategy, relevant aspects, such as the cash generation, debt reduction, growth of the management model, talent management and sustainability have been taken into account. In this regard, in setting the objectives for the current year 2024, the percentage of objectives linked to ESG has been increased. In relation to the amendment to the remuneration scheme of the Executive Chairman and Chief Executive Officer, which have been included and published on the annual report on remunerations that is also submitted to vote at this general meeting. The committee has examined and assessed in depth the increase in remuneration, taking into consideration that Mr. Gabriel Escarrer Jaume has not had any in the remuneration since 2018. He has also reduced his remuneration in the pandemic in those variable remuneration was suspended in 2020. The cumulative inflation since that date and that in June 2023, he became Executive Chairman. In addition to the position of Chief Executive Officer of this company, all this has been taken into account as well. As a consequence, the committee drew up this proposal on the basis of remuneration that is on the same position in other listed companies. All this with the advice of an external independent expert in the matter. And in order to make this measure more transparent, the company has published this benchmarking in the annual report on remunerations itself, in line with the proxy advisers recommendation. On the other hand, the committee has also prepared a proposal to increase the remuneration of the directors in their capacity as such, which consists of a fixed component and a variable component based on the attendance of the directors at the various meetings on the Board and committees and for the additional duties they perform on the board. Secretary, Committee Chairman, et cetera. The amount of which have not changed since 2012. In this regard, the Board at the proposal of this committee has agreed to increase such remuneration by 12%, all based on the current corresponding benchmarking of similar listed companies. Likewise, it should also be noted that in the new remuneration policy applicable to the fiscal years 2025 to 2027, is submitted as this general shareholders' meeting, which will give continuity to the previous policy and which includes improvements in terms of transparency and detail of the Board's remuneration fee. In particular, the new policy details more vigorously the remuneration elements of directors in their capacity as such and the criteria for its review and update as well as the specific remuneration for their membership of the various committee. Likewise, and among other changes, the minimum period or long-term variable remuneration plans is qualified to 3 years. This modification is made in order to adapt this remuneration item to the market practice in similar companies. And thus, to enhance the ability to retain, track and engage talent, placing the company in a competitive position with respect to its similar company. As you know, this committee assumes responsibility for sustainability. During the last year, it has monitored both the tasks carried out by the Meliá Sustainability Committee during the year and the objectives and strategy in terms of nonfinancial information. In terms of corporate governance, the committee carried out of the analysis and approval of 2023 annual report, the 2023 annual report on remuneration of directors and the review of the composition of the Board's committees among other issues. I have nothing more to add. Ladies and gentlemen, shareholders, these are the duties in a summarized form developed by the appointment Remuneration and Sustainability Committee during the last year and until today. Of course, both the Chairwoman and the committee Mrs. [indiscernible] and i remain at your disposal for any clarification you may need. Thank you very much for your attention.

Thanks Mr. [indiscernible] and welcome to Mr. [indiscernible] as the new Chairwoman of the committee.

Thank you very much, Mr. Chairman and the Chairman of the Board and Chief Executive Officer, thereof will now speak.

Good morning, everyone. Ladies and gentlemen, shareholders, honorary Chairman, members of the Board, employees and friends. Thank you for your attendance, both for those attending in person. They had the Grand Maria Victoria Hotel in Palma and to those attending by telematic means. In particular, I am glad to welcome back my father, our honorary Chairman and Founder. He could not join last year due to a long period of [indiscernible]. But you know that your presence is an eventual support for all of us and also the best sign of your full recovery. Please, give him an applause. A year ago at this meeting, I expressed my confidence that 2023 would be a positive year for us. And indeed, I am glad to confirm that it has been a great year for Meliá and for tourism in general. It is an honor for me to appear before you, once again, to give an overview of the management and results of our company in the year in which we finally overcame the disruption caused by COVID and began a new path of value creation that is reflected among other milestones in the return of dividends. Next, we will set out the strategic strengths and priorities that have enabled us to achieve these results as well as our focus for 2024, when we will complete the strategic cycle designed for the post-pandemic phase. Finally, I would like to explain our vision and commitment for 2024. Before starting with the above-mentioned topics and following recommendation number three, of the good governance code of listed companies and as Chairman and CEO of the Board of Directors, I will inform you of the most relevant aspects in terms of corporate governance where the higher level of compliance with the recommendation of the good governance code managing the last year stands out, which, without considering those classified as nonapplicable already represent 92.6%. In this respect, the main milestones achieved since the previous general meeting can be summarized as follows. With regard to recommendation #26 of the good governance code during 2023, eight meetings of the Board of Directors were held, thus complying with set recommendation. Likewise, I would like to inform you that a minimum of 8 meetings of the Board of Directors are also scheduled for this year, that's consolidate in compliance with this good governance guidelines. On the other hand, following my appointment on 22 of June, 2023, as Executive Chairman and in relation to recommendation #34 of the good governance code, the lead director has been assuming more functions and responsibilities such as relations with the company's shareholders in matters related to corporate governance or the management of the succession plan for the Chairman of the Board or under the amendment of the company bylaws and the regulations of the Board carried out in 2022, which already included this extension of powers. Likewise, with regard to the recommendations, whose level of compliance needs to be improved, such as [indiscernible] the person such as women in the Board, currently 36.6%, I would like to point out that both the Appointment, Remuneration and Sustainability committee and the Board itself are aware of the targets established in this respect by the good governance of listed companies and the Diversity Directive. And I would, therefore, like to highlight once again the firm commitment of this company to encourage and achieve in the short and medium term, the Presidents of more women in our Board, which will enable us to reach this milestone. All these for future changes in the composition of the Board. However, as proof of this commitment and it's significant for the company, I would like to underline the fact that both committees, the auditing and compliance committee and the Appointments, Remuneration and Sustainability Committee are already chaired by two remarkable and renowned professional women, as both Chairman already mentioned. On the other hand, in terms of compliance -- regulatory compliance in 2023, I want to highlight events such as the renewal of our UNE 1961 standard certification on best practices in management systems to prevent crimes, reduce risks and promote an ethical and compliance business culture and we obtained second position behind [indiscernible] in the ranking of [indiscernible] 35 companies according to the transparency and good governance report on ethics and compliance prepared by leading entities in this matter. These achievements demonstrate the commitment of this company and that of all its management bodies in terms of regulatory compliance and contribute solidly to ensuring that all our public and private stakeholders trust our management supported by firm values of integrated transparency and compliance with regulations. Following is a summary of the highlights of 2023. 2023 concluded as a good year for the hotel business, driven by solid demand whose evolutions since 2022 supports its strategy, we have deployed at Meliá Hotels International. And these are undoubtedly the two major factors that define our 2023 results. On the one hand, a positive tourism situation with demand indicators that remain strong and show no signs of slowing down. And on the other hand, a successful strategy of the company to capitalize on this demand and maximize its positive impact. Strategic road map that, as I will explain the course of my speech prioritized is strengthening our balance sheet underpinning qualitative growth, in particular in the Permian luxury portfolio and boosting the efficiency of our management. This contributing to maintaining our margins despite inflationary context that we had last year. In 2023, we were able to fairly meet the commitments I made a year ago at the last general meeting. Both in terms of revenues, with a record figure of EUR 1,932.2 billion, which we already exceeded by 7.8% as recognized in 2019. And in terms of EBITDA, while we've EUR 489.8 million, we, once again, exceeded the committed target of EUR 475 million. In addition, we achieved a net income of EUR 130 million, 8.3% of that recognized in 2022, also exceeding by plus 6.9% achieved in 2019. It is also great news to witness how the remarkable increase in our RevPAR or average revenue per available room of 17.3% in hotels under ownership. And on the lease, was achieved despite the fact that occupancy levels are not yet at 2019 levels, which gives us ample room for further improvement in this respect. As you know, at Meliá Hotels International, we prioritized the value creation for our shareholders. And we also pursue the creation of social and environmental value, including all our stakeholders. Therefore, we are also proud to have succeeded in reforming our position among the leading companies in sustainability in our sector, according to the prestigious S&P Global ranking, maintaining our position as the most sustainable hotel company in Europe in the face of increasing competition in the sector and a regulatory requirement that is increasing exponentially. Being aware that we still have a lot to do recognition such as the aforementioned ranking and the top employer certificate that we have evaluated and extend it to the 7 markets that represent more than 60% of our total workforce confirm us as good employers and a good company to work for, encouraging and reinforcing our commitment and pride in belonging, which in 2023 stood at around 90%. According to the climate and culture studies parried out by the motive consultancy firm, which positions us well above the average of comparable companies. As I said, I will try to set out below the main advantages shown in the 4 major objectives set out in our road plan. We also call it Road To 2024. As you know, we aspire to be a larger and better managing company. To this end, we have continued to focus on qualitative growth prioritizing the destinations where we have hotels like the Caribe or an Asia Pacific as well as some more unexplored destinations where there are opportunities for a significant implementation of our brands, such as Albania, Saudi Arabia and Malta. Among the former, I would like to highlight the strong boost to our presence in Mexico, a country in which we will double our portfolio of operating hotels in the next 2 years and the strong expansion in the major destinations of Southeast Asia, such as Thailand and Vietnam, where we are already the first international hotel chain with the largest presence. And where -- as we have been announcing these days, we continue to grow. Meliá's growth formula combines organic or hotel-hotel growth with the strategic alliances with our partners, some of which you can see in this image on the screen. With the strategies, we're able to bring to gather important objectives, just growth, generation of synergies and of critical mass and balance sheet consolidation. Since as you know, our company decided several decades ago to focus on growth through low capital-intensive formula, which combined with the groups that has under ownership, make up a unique model that we define as asset right. Thus, our portfolio combined a balanced mix of hotels under ownership and hotels under management and franchise and exceptionally under lease to maximize strategic growth without compromising our balance sheet or overleveraging. In this regard, during 2023, 100% of the 26 new hotels signed were incorporated under management system that also governed 11 of the 12 openings during that same year. This formula also allows us to take advantage of the new dynamics of the hotel investment market and the growing trend towards brand affiliation by independent hotels or small chains as we have become a suitable alternative to manage their establishments, adding value to our management and distribution know-how while maximizing economies of scale. And of course, last but not least, this management strategy allows us to add new crown deals to our portfolio with outstanding hotels such as the granulator Marina in Barcelona and it's the next [indiscernible] owned by [indiscernible] Capital Group. The brand [indiscernible] in Milan, the new sale [indiscernible] owned by [indiscernible]. The new Paris is [indiscernible] in Thailand owned by Asset World Corporation for the Grand Maria Nathan in Vietnam, owned by KBI Holdings, without forgetting the fabulous Meliá collection in [indiscernible] in Dubai and so many other outstanding establishments that enhance our brand, expand our business base and put us in a position to compete for top-level assets sought after by the major international chains. At this point, I would like to share with you a brief overview of the positive impact we have already begun to see as a result of our strategic commitment to repositioning our hotels, whether through comprehensive renovations or transformation, rebranding or brand and segment change. As you will see in the image by areas in Spain, we have made a strong commitment to upgrade hotels in general, and in particular, to continue growing in the luxury and premium segments, which, in 2019, represented 45% of the portfolio. And in 2026 year will represent no less than 68% of our hotels in Spain. So it's 2/3 of our portfolio. Only in the Canary Island, over the last few years, we have renovated 3 major hotels in [indiscernible] and upgraded another 3 luxury brands like [indiscernible] the Melia collection [indiscernible]. This has contributed to the strong growth of the average rate has increased by 57% since 2019. In the [indiscernible] Peninsula Coast, the effort made to transform 7 former [indiscernible] rent hotels into premium and luxury segment brands, such as [indiscernible]. These renovations and rebranding have also contributed to the positive evolution of the average price in the area, which grew by plus 59% since 2019. In urban hotels, the company has undertaken the rebranding of hotels such as Barcelona Polo [indiscernible], [indiscernible] to the inside brand, so which we are also bringing other major hotels, as Barcelona Aeropuerto, [indiscernible]. Other major renovations in their final phase are those of [indiscernible] in Madrid, among others. Following the completion -- the finishing of the construction of many of these hotels, we expect to see an increase of plus 38% in the average rate in the urban Spain in the second half of the year. This strategy has also been successful in the company's hotels in major European capitals, like Paris with two hotels upgraded to the Meliá collection, [indiscernible], which improved their average rate compared to 2019 by more than 100% for London with the transformation of the Meliá White House, which allowed a 57% increase. And in the Americas, with two successful transformations such as those of [indiscernible], which improved its average rate by 34% from last year and the [indiscernible] in Mexico, which experienced a 55% improvement in average price. So the focus on luxury, which is reflected in the growth of this brand has become a unique competitive advantage and a powerful lever for generating differential value, which is reflected in a high potential for improving RevPAR. As these hotels maintained average rate, 80% higher than those of the group or their brands. The portfolio of luxury brands, which has doubled since 2019, increased its RevPAR by 31% since before the pandemic and it's also the one with the best prospects for 2024. One out of every 3 openings of the group in the next 3 years will be a luxury hotel. And as an evidence of the boost of these brands between 2024 and 2025, we will open 6 new establishments of the [indiscernible] brand. We will also bring the first [indiscernible] to Asia and double the portfolio of the Meliá Collection Hotels in addition to continuing to expand the new [indiscernible] with hotels in Madrid, Mexico and Puntacana. I will now summarize progress towards our strategic objective of being more efficient and digital. During 2023, we have continued to make progress in our digitalization at back office level and with regard to our customers and their experience. Our digital road map, called the Digital 360, has enabled Meliá to further advance its technological development. And today, we have a suite of first-class solutions to manage our own and third-party hotels more efficiently. And at the same time, we are developing digital technology based on artificial intelligence block chain, et cetera. During 2023, we have launched various tools that in areas such as -- that will allow us to improve environment sustainability of our hotels. And using these technologies in areas such as energy efficiency, water efficiency with management and circularity in the measurement and reduction of the footprint where we believe. And of course, we remain committed to improving our digital distribution and sales, both to our end customer or B2C and to the intermediary customer or partner B2B. The renewal and improvement of our direct-to-customer channel melia.com, which now channels more than 46% of total centralized sales, has allowed us to improve our customer experience, the accessibility of our services as well as the customization of our value proposition to them. On the other hand, in 2023, we have also renewed our direct channel specific for travel agencies, or B2B, meliapro.com, which last year, included 6% more agencies into its platform and increased its sales by 15.68% compared to 2022, and compared to the 11.1% increase in direct customer sales in melia.com. This increase proves our commitment to continued growing hand in hand with agencies, incorporating the maximum efficiency that digitalization allows. It is also noteworthy the contribution of our loyalty program, MeliaRewards, which in 2024, celebrated their 10th anniversary with almost 16 million member customers who generated 90% of the total sales of our direct channel last year. Both channels allow us to remain at the forefront of innovation in the sector and are an important attraction for independent hotels or small chains looking for a managing company. And this allow us to optimize our revenues, providing a loyalty-based reservation base and diversifying our sources of business. Before concluding this summary on our progress in digitalization and efficiencies, I would like to remind you that at all times, the improvements in cost and process management have been made with the customer experience and subsection in mind, therefore, without affecting the quality of our products and services and also preserving our employees' experience and the working environment. So I can assure you that our customers are increasingly more satisfied as our Net Promoter Score or NPS reflects, which has improved by 7 points compared to 2022 and 2019 to at the end of 2023, getting to 53.1% above the industry average. Thanks to the efforts of our operations team to maintain high levels of service quality and product standardization. I'm also pleased to inform you of the results of the efforts made to contain the impact of inflation on our costs and goods and services by means of a longer-term negotiation strategy and by unifying areas [indiscernible] to the agreements as well as by introducing competition through new suppliers and references. On the other hand, through investment in renewable energy, such as photovoltaic energy and energy monitoring and efficiency as well as by installing state-of-the-art equipment much more efficient in all hotel renovation and transformations. As a result, we have managed to limit the average impact of inflation on our supplies compared to an average level of 15% for our sector to 8.5%, which has been heavily impacted by the rising cost of food and other raw materials. Another strategic objective of the group is, of course, being more sustainable. And I would like to summarize below the progress achieved during 2023 in this area. At the environmental level, during 2023, we managed to reduce our carbon footprint by 19.6% compared to the reference year 2018. But this -- by 9.5%, the average energy consumption were at stay and with 82.6% of the hotel portfolio using renewable energy sources. Now the milestone is the certification of 86.64% of the hotel portfolio in sustainable tourism, a requirement that is increasingly necessary and demanded by the market and the launch of our events program road to net 0 events, thanks to which we will be able to offset the carbon footprint generated by such an important segment as MICE. Regarding responsibility towards our employees, in terms of quality and quantity of employment, Meliá recovered the entire workforce with more than 45,000 employees, exceeding pre-COVID figures and closed the year with 87.7% of permanent staff and [ 97.4% ] of full-time staff as well as for the 46.6% of total positions held by women, who also hold more than 30% of the management position. Globally, the average salary cost for our company increased by 13% compared to 2022, also reflecting the increase in the global workforce that I mentioned before. This progress is part of our human resources policy with global reach and together with our strong commitment to health and safety at work and to offer competitive working conditions and a favorable working environment have led Meliá to get, for the third consecutive year, the top company to work for certification by the prestigious top employer [indiscernible] covering no less than 7 markets where it has a major presence as an employer, and that is Spain, Dominican Republic, Mexico, Germany, Vietnam, Italy and France, representing more than 60% of the group's total workforce. In addition, the America's Talent ranking, leader in measuring reputation in Spain, has once again positioned us for another year, almost a decade now, as the best company to work for in the Spanish tourism sector and has been included in the top companies to work for prepared by the leading newspaper expansion in Mexico. I'm especially proud that our employees have given our company an excellent rating in the culture and commitment service with a spectacular score for pride in belonging 90% and commitment, 87%. Finally, I would like to remind you that during this year, we have signed our third equality plan with a social agent, which analyzes in more detail, the commitments already undertaken in all areas of work and positions us among the company's most committed to quality work life balance and professional promotion and support for victims of harassment or gender-based violence. In terms of social responsibility, I would like to share with you an indicator that reflects the social impact of our activity, we call it social cash flows, which shows how our group's income is distributed and has an impact on the different social stakeholders. Employees, institutions, suppliers, partners and owners, et cetera. The graph, you will see that together with EUR 20 million for our shareholders, the 21.2% of the income, EUR 621 million that went to our employees and 43.2% went to the suppliers of goods and services and 86.4% of the suppliers are local and kilometer 0 suppliers. With regard to the most significant items, 7.8% was allocated to direct payments to public administrations, half of them in Spain, while 18% were devoted to hotel owners. It highlights our tax contribution and importance of companies like ours for destinations and their communities. So our objectives set out in the growth map more profitable, we see our commitment to go farther every year. And now in the end, I just wanted to mention our road map to be more profitable and financially sound, a priority that has been the focus of our efforts since the deep crisis that COVID caused in our balance sheet. As our honorary Chairman said, never before have we witnessed the global shutdown of our activity. We had suffered, as you know, financial crisis, hurricanes, volcanic eruptions, regional pandemic, wars, and revolutions such as the Arab Spring. And we had always managed them from the strength of our [indiscernible], which allowed us to compensate some markets with others until COVID came along. Believe me considering the impact of this crisis, which forced an almost general closure for 2 years, our well-funded estimates that we managed to recover our net debt EBITDA levels by the end of this year without the need of a capital increase, take on a greater dimension and a greater volume. Therefore, the market has received our 2023 results with remarkable pleasure. And I am happy to share with you that all analysis without exception have recognized that our company outperformed market consensus expectations at all levels and that 50% of analysts recommend buying our shares, while 44% recommend holding. We said the market has shown its confidence in us, not only because of the [indiscernible] of demand and the particularly outstanding evolution of the business in destinations as The Canary Island, [indiscernible] Dominican Republic, Mexico and Southeast Asia, but also because of the strategy followed by the group to strengthen our balance sheet with the objective of returning in 2024, our net debt/EBITDA to a sustainable level of less than 2.5x, which they analyzed have considered as feasible. It is clearly very comforting to see the priority we gave in our strategic plan to all those levers designed to help us strengthen our balance sheet and continue to grow our yield and continue to yield significant results as we are aware that we must keep on working hard. Finally, we talk about perceived our intangible value, which is increasingly important, as you well know, I would like to remind you that the value of Meliá Hotels International brand continues to strengthen. And last year was recognized by the consultancies from Brand Finance as the strongest brand in Spain and has been included in 2024 in the prestigious ranking of the 30 best managed brands that [indiscernible] prepares every year. I will now talk about our vision perspectives for 2024 and the commitments we propose to undertake. We have seen how 2023 evolved, as I often say, from good to better, marking the return to full operational normality as well as a business trend that continues to rise with no indication so far of a slowdown in demand. And today, I commit with all of you to take advantage of these several situations to further strengthen our balance sheet and return it to the healthy debt and value generation ratios prior to the pandemic, already in 2024. We will achieve this as we have been saying through various means. Firstly, by maximizing revenue generation, thanks to our total revenue strategy and the group's firm focus on the most profitable and resilient segments, such as Premium and Luxury Hotels. In this regard, Easter, as once again demonstrated the resilience of our business model, managing to maintain revenues despite the March effect, a month in which traditionally fewer people travel compared to years when Easter falls in April -- on the impact -- and the impact of adverse weather conditions in Spanish destination while maintaining the trend towards a reduction in booking cancellation rates. As for the rest of the year, based on the sales on the books, those registered for next summer, we can see that occupancy evolves very positively and is above that estimated for the same dates in 2023, while the average rate also maintains its upward trend above that of the previous year. The current rate of bookings already double digit, plus 34% higher than those registered on the same date of the previous year for our holiday, hotels continues to show no signs of slowing down, while cancellation rates continue to fall. And I am pleased to announce that the RevPAR, minimum revenue per room achieved during the first quarter of 2024 has increased by over 15% compared to last year. Our estimates to recover in 2024, the average occupancy levels before the pandemic are particularly positive, but in 2023, there were 4 points below those of 2019. We will see reconciliation of our [indiscernible] business growth based on both occupancy and price. [indiscernible] is registered both in the Spanish cost and in the Canary [indiscernible]. Registered sales show good perspective, 11% more sales for 2022, than last year with the same date. And a confirmed turnover for 2025, which is 30% higher than that we had a year ago for 2024. In addition, request for quotation for new events exceed those received after May last year by 26%. In terms of individual corporate travel, incentive breaks bookings also evolved positively with a 20% growth compared to the previous year with our direct channel Meliá Pro, sending out as a channel for business, in particular to Europe and the Caribbean. Later this afternoon, we will present our first quarter results to the market, which will give us a first insight into business trends in our main markets as well as the performance in a key period for some strategic destinations, such as the Canary Islands and the Caribbean and a snapshot of our sales on the book for the rest of the year. A second road to growth and strengthening will undoubtedly be our expansion with a minimum of 20 new hotels to be opened during 2024 and with the initial operation of hotels opening -- opened during 2023, that will progressively reach your full operational level such as Gran Meliá Palazzo Cordusio in Milan, Gran Meliá Nha Trang in Vietnam, the Meliá Collection Ngorongoro inside Kuala Lumpur, inside Bangkok, the Meliá Durres and Sol Tropikal Durres in Albania among others. Last week, we signed a new hotel in Cayo Coco, Cuba with 566 rooms, which will operate with 5-star all-inclusive category under the name of Meliá Costa Rey. As well, the company has 8 new hotels in Malta. As we saw, we have a list of top level partners with whom we can continue supporting a growth plan on solid foundation. And thirdly, we will continue to promote as a vehicle for consolidation and growth from transactions with assets under the premise of always maintaining the majority ownership and of course, the management of the existing hotels or those resulting from the corresponding transformation and repositioning processes. An example of that is a transaction already reported by the Galada Group in Mexico, amounting to $30 million and the one that we are currently finalizing for the conversion of some assets in Punta Cana, amounting between [ $30 million and $50 ] million, including the creation of the future [ Zelle ] in Punta Cana. It will be a hotel that we expect to open its floors at the end of this year. Before listing the main commitments we would like to make for 2024, I would like to remind you that the market support for our management has also been reflected in the positive performance of our share price, which throughout 2023, and to date, has been remarkable, increasing by 67% compared to 35% increase of the average IBEX company. The beginning of 2024 to date, Meliá's share price has risen 28% compared to 10% for the IBEX, making it one of the best-performing companies in selective index, a clear sign of the market recognition of our commitments and program. In addition, I am pleased to confirm that the main advisory and voting recommendation agency or institutional investors, known as proxy advisers, have voted in favor of all the items to be approved today in this General Shareholders' Meeting. Dear shareholders, having outlined our strategy, I would like to renew our commitment to all of you for 2024. Firstly, in terms of expansion and openings, we are comfortable in setting a target of signing a minimum of 13 new hotels with nearly 7,000 rooms. With regard to the opening, we plan to open a minimum of 20 hotels during the year. It's a figure that could increase if new operational or ready-to-open hotels are signed. From January to date, we have already signed 19 hotels with more than 3,900 rooms, including 2 excellent hotels in Pattaya in Thailand and 4 new additions to the exclusive and unique portfolio of our Meliá collection brand in Asia, Spain and Malta. As for business, I am comfortable in stating that we expect to achieve a double-digit increase in RevPAR, the average revenue per available room. And in the financial area as part of our aim to further improve our performance through cash generation expansion and some asset rotation, we can commit to you that we will gain a market consensus target for the group's EBITDA, excluding capital gain and ending 2024 with an EBITDA of at least EUR 525 million provided by the current market trend for the season is maintained. Our projections in line with the estimates of entities such as [indiscernible] or with the forecast of airlines continue to improve, allowing us to aim for this objective, which, as you already know, improves on the objective I stated during the presentation of our annual results for 2023 of exceeding EUR 500 million of EBITDA this year. At the same time, the continued improvement in our revenue management and efficiency, combined with the moderation or a slight decline in inflation, allow us to state that our EBITDA margin at the year-end 2024 will already be above that achieved in 2019 before the pandemic, which will undoubtedly be another very important milestone. So here now, I commit myself to all these objectives, double-digit RevPAR increase, EBITDA equal or higher than EUR 525 million, net debt EBITDA ratio below 2.5x and recovery of the pre-pandemic EBITDA margin. Dear shareholders, as I said at the beginning of my speech, 2023 has been a year of remarkable achievements for Meliá Hotels International, not only for the results obtained, but also for the impact of our activity on society. And I am sure that we will continue to move forward to surpass them and consolidate the progress achieved since the drastic disruption of COVID. I hope this is the last general meeting at which we still have to talk about the effects of pandemic that we have already erased from our heart and which now we must erase definitely from our balance sheet. And I'm confident that this will be the case, thanks to the strength of the fundamentals of the tourism industry, which is becoming increasingly important in the priorities of spending decisions of individuals and families but above all, thanks to our winning strategy and the best team in the industry. None of this would be possible without the work of the more than 45,000 people who make up Meliá, whom I would like to thank for their professionalism, their effort and their strong commitment to our values. And of course, without our management team, partially renewed in 2023, as you all know, it's a team of whom I'm so proud. Following the renewal undertaken during the summer of 2023, senior executive team has been strengthened, retaining our Chief Operations Officer, André P. Gerondeau and our Chief Human Resources Officer, Gabriel Cánaves in the office and modifying the position of Juan Ignacio Pardo, who has become the new Chief Real Estate Officer. In order to fill the remaining key positions in the senior executive team, we have once again relied on internal talent and commitment promoting 3, Mariano Pérez de Cáceres, who did an excellent job by leading -- and he was a VP in Charge of the Legal Department. He is the new Chief Legal and Compliance Officer. Carlos Gonzalez, who was involved in the SET as a leader of the Strategy and Digital Transformation Office, and he is the new Chief Strategy and Transformation Officer. And last but obviously not least, our former VP of Portfolio Management and Joint Ventures, Angel Luis Rodríguez, is the new Chief Financial Officer. I would also like to appreciate the support of our female and male members of the Board of Directors. They are part of a team that has demonstrated extraordinary commitment and solvency. Women and men, most of them independent as we have seen whose criteria always provide us with certainty and key support at the most important moments and in the most important decisions. I sincerely thank all of them and I would especially like to highlight the work of the 2 directors who have completed their time as Chairman of the 2 Board Committee. Javier Campo, firstly, he has been Chairman of the Audit and Compliance Committee; and Fernando D'Ornellas, who has held the same position in the Appointments, Remuneration and Sustainability Committee. At times that, as we know, have not always been easy, 2 extraordinary Chairman, without a doubt, who we thank for their generosity and extraordinary contribution to this house. I would also like to welcome today female directors who, since February, have been chairing the 2 committees, [indiscernible], Chairwoman of the Auditing and Compliance Committee; and Cristina Aldamiz, Chairwoman of the Appointments, Remuneration and Sustainability Committee. And of course, I would like once again to thank Juana Arena, our dear adviser of the committee, he left a mark in all of us. And of course, I would like to again thank all of you, our dear shareholders, for the trust that you have placed in our company this year and to assure you that we look forward to continuing to grow and respond to your confidence by creating value and continuing the trend of share price increase. As you know, during the last few years, it was not possible to approve the distribution of dividends by -- for 2 compelling reasons, one of the most mandatory since we benefited from the aid for maintaining employment and governments such as the Spanish granted during the pandemic in the form of temporary employment plans known as [indiscernible]. The company's in view of the disruption of their business, which limited our capacity to distribute profits up to -- and including last year. The second reason has been our responsibility as managers. Given that, as we already stated, our priority is to protect your investment, strengthening our balance sheet to ensure continued value creation and essential market confidence. The importance of these arguments, however, plays greater value on the fact that today, thanks to the progress outlined above, and our plan to complete the recovery to the pre-pandemic levels during this year, widely supported by the market. We can announce the return to dividend distribution. Specifically, EUR 20 million will be distributed with a payout of 17.5% of profit with a dividend yield above the average for international hotel companies. Furthermore, you have argument that as we continue to improve our indicators, we will continue to improve the remuneration of our shareholders in the following years until we return to pre-COVID payout levels. We believe this is an important step, but certainly not the last one in the new path that, as I explained at the beginning of my speech, we have embarked on during 2023 with our strategic road map, which is already bearing important fruits and which allows us to be frankly optimistic about the future of our company, a larger and more managerial company, more efficient, digital or sustainable and a better employer without any doubt and more profitable company. Hold no doubt that during 2024, we will continue to work to create value for our shareholders and for all our stakeholders, being aware of the importance of our work and of the responsibility we have assumed before all of you. Thank you all.

Our Chairman is saying that at the end of this event, we will hold a cocktail, so we still have to pass several items on the agenda, we have to approve them. And after that, we will end meeting if I may be allowed. Well, continuing with the development of this meeting, the definitive list of attendees and quorum is as follows: we have 71 shareholders here, holder of 122,281,738 shares represented in the share, 179 shareholders with 75,500,000 shares, 54% of share capital, the percentage that we had already indicated that is over what has been indicated in Article 24 of social bylaws and Articles 193 and 190 of the text for the law of capital company. Therefore, there has not been substantial change to the data previously given. So considering this quorum as definitive, the value constitution of the General Shareholders Meeting that first call is confirmed. Mr. Chairman.

Many thanks, Mr. Secretary, therefore, it only remains we started deliberative phase of the meeting and to open the floor to the shareholders. Therefore, the floor is open for those attendees or shareholders who have expressed their wish to take the floor or have requested verbally or by telemetric means, information or acceleration or any matters included on the agenda and the publicly available information provided by the company to the National Commission of the value market since the last annual meeting or the auditor's report. So according to the list that we have created, the Chairman with the Secretary will give the floor to the shareholders that have requested or we will reply to those questions received telemetrically. You have the floor.

My name is [indiscernible], I am [ speaking ] for the first time in this Q&A on behalf of my family, the family [indiscernible] is closely linked to this company, not only for professional ties, but also true friendship ties. I am very excited to be here. I would like to give a special acknowledgment to the owner Chairman and Founder of this company, Mr. Gabriel Escarrer, thanks to his effort and his work. This company has been settled -- has been created on foundations that allow us to consolidate with complete success, our work for the future. I would also like to acknowledge all the team of professionals that together with Mr. Escarrer allow this company to be a #1 in this sector.

Thank you very much, [indiscernible]. Indeed, the ties between the 2 companies come from a long time ago, in fact, even my grandfather was the first Secretary in the Board of Advisers when the company was listed, and he was the pillar on the foundation of the company, and he was a lawyer of preference, an excellent lawyer. And of course, someone has an expert in commercial field as any other. So thank you very much for your words, and I'm sure the honorary Chairman will receive them. There is no further question. We are going to read the resolutions submitted for the [indiscernible] of the general annual meetings. [indiscernible] of the proposed resolutions to be put and the vote have been made available to the shareholders by the beginning of the session as well as facilitating its download through the QR code present in the room or their constant access on the company's website. It is not necessary for Mr. Secretary to read aloud the literal content, but an extract thereof unless any shareholders so requests or all of any or any of the proposed resolutions. After the presentation of each item, Mr. Secretary will indicate whether there are sufficient votes to approve the resolution in question. In addition, given that the meeting is [indiscernible] streaming, the results of the vote will be shown on the screens for your convenience. This is without prejudice to the publication at the end of the general meeting of the definitive data on the quorum of the votes in favor, against, abstentions for each item on the agenda, which will also be included recorded by the notary public in the minutes of the general meeting. Secretary has a floor.