UBS cuts Melia on slower earnings growth, climate risks

Melia Hotels International SA

14/01/2025 13:00

** UBS downgrades Melia  MEL.MC  to "sell" from "buy" as it
see a slower pace of earnings growth for the Spain's largest
hotel chain
    ** The broker sees RevPAR (revenue per available room)
growth to decelerate from over 10% estimated for 2024 to about
3% in 2025 due to base impact along with lacklustre EU GDP
growth and slowing Spanish GDP growth
    ** It is also concerned that climate change will impact
hoteliers over the medium term, especially resort operators in
coastal regions
    ** UBS notes Melia's exposure to leisure travel and high
number of hotels near coastal regions and areas prone to
flooding and other climate change risk
    ** "As climate change become more apparent, we think
investors may demand a higher cost of capital to compensate for
the risk," it says
    

 (Reporting by Tiago Brandao)
 ((Tiago.Brandao@thomsonreuters.com;))