Company Profiles - Sol Melia

It all started with a dream: "In 1956 At only 21 years of age, a young and entrepreneurial Gabriel Escarrer Juliá begins to lease and operate his first hotel: the Altair Hotel located in the residential area of Son Armadams (Palma de Mallorca, Spain), the first 60 rooms of the future Sol Meliá." (2006 Annual report)

The same report "opens" with a picture in which a couple is walking on the beach away from the camera and where at the same time a professional is talking on a mobile phone his face turn towards the same camera. This summarizes that the hotel business is not only dedicated to leisure but also to business. This makes that the organization of the hotels is differentiated too. Hotels require more sophisticated facilities in for example internet connections, for the business users.

In 2006 Sol Melia (with an accent on the a) celebrated it 50th anniversary. Striking fact about this hotel chain is the ownership: it is a family business. The chairman is Gabriel Escarrer Juliá (father), Sebastián Escarrer Jaume is "2nd Deputy Chairman and Chief Executive Officer" and Gabriel Juan Escarrer Jaume is Chief Executive Officer. (Annual report 2006).

The geographical distribution of the hotels are mainly concentrated in Europe and Central and South America. There are a few exceptions (far east, new York, etc).

The hotels of Sol Melia are categorized into two main categories: city hotels (48%) and resorts (52%).

The organization of the hotels is divided like other hotels in Managed contracts (46%), ownership (30%), leased (14%) and franchised (5%).
In this way and in 2006, the Sol Melia chain served 27,8 million stays it organized about 80,000 rooms and 406 hotels.

The hotels are - in difference with a chain like Accor - categorized by "Stars"; 3 stars make up 25%, 4 stars 41% and 5 / de luxe constitute 34% of the business.

Although not explicitly mentioned the Sol Melia Group makes usage of loyalty program and club services that offer possibilities to attract clients and to retain customer loyalty.

As other hotels the group executes a sustainability program. It is hard to compare the various program between the hotel chains. The 2006 report mentions a 38 liter water reduction "per stay" compared to the previous year. Partnerships with Philips to reduce energy usage and many other initiatives are mentioned in this report.

News about this company mentions the fact that the president of the company has bought shares during the first quarter of this year expressing that the shares have fallen too much from the historic highs of 2007.

Summarizing some of the unique characteristics of this company:

A family led business
Fifty / fifty division between Business Hotels and Resorts
Distribution mainly in Europe and (South) America
Organized through: Managed contracts (46%), ownership (30%), leased (14%) and franchised (5%).

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Company Profiles - Sol Melia