Three Years in the Making: Sol Melia Vacation Club Builds on Formula for Success and Global Expansion

Business Wire, Feb 8, 2008

ORLANDO, Fla. -- Just three years ago, in 2004, Sol Melia Vacation Club (The CLUB) started by promptly developing three international properties. Today, the internationally branded club, which is part of Spain-based Sol Melia Hotels & Resorts, has 13 international locations in Europe, Mexico, the Caribbean, and Central America with more than 20,000 members worldwide. In 2008, the company prepares to open two more resort locations in Europe, the Caribbean and Mexico. With total revenues in excess of $130 million in 2007, The CLUB continues to focus on its vision to be a pre-eminent global provider of exceptional leisure lifestyle experiences for its members, while moving to the next stage of its development with The CLUB by Sol Melia.

Impressive Numbers

Solid financial results have built a strong foundation for The CLUB. According to Alain Grange, Chief Executive of Sol Melia Vacation Club and Leisure Real Estate Division, the company consistently achieves record sales and some of the highest operating margins within the vacation ownership industry. "We have been profitable since our first quarter of business from vacation club sales, member and network operations, rental and Club portfolio," he explained.

The CLUB achieved a revenue increase in 2006 of 86% over 2005, while also reporting a 2007 increase of 44% over the 2006 revenue number. At the end of 2007, The CLUB celebrated a banner year with total revenue of $130 million and an EBITDA of $50 million. "We're extremely proud of the fact that The CLUB has made a net contribution of more than $400 million to Sol Melia's Hotel Division during its short time in business," Grange added.

The tremendous success is owed, in part, to widespread success of new projects in Mexico, Puerto Rico, Spain, the Dominican Republic and Central America, and the launch of a new deluxe 4-bedroom villa product which is marketed and sold as a multiple weeks product. In 2007, The CLUB opened new projects at ME by Melia in Cancun, Gran Melia in Puerto Rico, the Paradisus Punta Cana in the Dominican Republic and Melia Gorriones in Fuerteventura, Canary Islands, Spain. Additional successful satellite preview centers were also opened in Europe and the Americas.

A Strong Start

"As one of very few globally branded vacation clubs, we started off strongly with the name, organization and clear responsibility to develop and execute a product that exceeded high standards of service and quality," said Grange. "The breadth of the company on an international scale also provided the perfect place to take club membership to a level that it becomes a leisure lifestyle, rich with experience and options that can adapt and be enjoyed by members for a lifetime."

Grange attributes the widespread success for The CLUB and the Leisure Real Estate Division, to the fact that they have been conducting business on a truly international level from day one. "We had the right leadership in place to build teams locally, internationally and corporately with a focus on multi-cultural and multi-lingual business points," Grange said. "You have one chance to make a good first impression, and from the beginning, we did that by focusing on the well-being of the customer, setting high service levels and creating a product with flexibility and appeal. It's all about doing it right with ethics, integrity and passion, while concentrating on a long-term view of a sustainable business model."

The CLUB offers exotic destinations, designer-appointed luxury accommodations, exclusive services and unforgettable amenities. The leisure lifestyle concept is designed to provide members with an entire lifetime of leisure experiences to meet their ever changing needs. All members have access through The CLUB to stay at all Sol Melia's hotels and resorts worldwide, including those in destinations such as Paris, London, Madrid, Rome, Mexico City, Buenos Aires and more.

The variety of vacation experiences provide ongoing flexibility and lifestyle choices such as catered and planned reunions or weddings, in-country club facilities and events, concierge, butler and chef services, airfare, cruises, car rental, etc.

A Powerful Network

Another key component to The CLUB's success story, according to Grange, is a well-thought-through and well-executed business model that provides close synergies with all aspects of Sol Melia Hotels & Resorts.

"All The CLUB projects are fully integrated with Sol Melia Hotels & Resorts projects. Together, we benefit from synergies in marketing, sales, products, operations, financial strengths, customer loyalty and brand recognition," he said. "The success of The CLUB, together with Sol Melia Hotels, is based on having one culture, one goal and a great understanding of each other's business, as well as and understanding of consumer expectations."

The CLUB was built with the quality assets of Sol Melia Hotels & Resorts and with the understanding that the platform for a loyalty program had to be a two-way street. "We couldn't expect our customers to be loyal to us if we weren't loyal to them first," said Grange.