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1. Company Snapshot

1.a. Company Description

NH Hotel Group, S.A. operates hotels in Spain, Benelux, Italy, Germany, Latin America, and internationally.As of December 31, 2021, the company operated 353 hotels and 55,063 rooms in 30 countries.It is also involved in procurement platform, call center, and catering services.


The company was formerly known as NH Hoteles, S.A. and changed its name to NH Hotel Group, S.A. in June 2014.The company was incorporated in 1881 and is headquartered in Madrid, Spain.NH Hotel Group, S.A. is a subsidiary of MHG Continental Holding (Singapore) Pte.


Ltd.

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1.b. Last Insights on NHH

NH Hotel Group's recent performance was driven by strategic leadership changes, including the appointment of Gonzalo Aguilar as CEO for Europe & Americas, and the introduction of NH Collection and NH brands in Sri Lanka in June 2024. These moves signal the company's expansion efforts and commitment to growth in key regions. The leadership changes are expected to bring fresh perspectives and expertise, potentially driving business growth and improving operational efficiency.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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A Fresh Look at Minor Hotels (BME:NHH) Valuation Following Launch of First Anantara Resort in South America

Nov -10

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LVMH: Share transactions disclosure

Sep -09

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What Does the Steep 20% Drop Mean for Rémy Cointreau’s 2025 Outlook?

Sep -09

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Société Foncière Lyonnaise (ENXTPA:FLY): Assessing Valuation After a Year of Solid Share Price Gains

Sep -09

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Minor Hotels Europe & Americas (BME:NHH): Exploring Valuation After Steady Share Performance

Sep -09

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What Recent Earnings Mean for Forvia’s 2025 Value Prospects

Sep -09

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Assessing Veolia Environnement (ENXTPA:VIE) Valuation as Investors Eye Subtle Shifts in Utility Stocks

Sep -09

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Telenor (OB:TEL): Is the Market Underestimating Its True Value?

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.59%)

6. Segments

Hotel Occupancy

Expected Growth: 3.5%

NH Hotel Group's 3.5% occupancy growth driven by strategic location expansion, improved customer experience through digitalization and loyalty programs, increased corporate bookings, and effective revenue management. Additionally, the group's focus on sustainability and refurbishment of existing hotels has enhanced its competitiveness, attracting more guests and increasing occupancy rates.

Catering

Expected Growth: 3.8%

NH Hotel Group's catering segment growth of 3.8% is driven by increasing demand for MICE (Meetings, Incentives, Conferences, and Exhibitions) events, strategic partnerships with corporate clients, and expansion into new markets. Additionally, the company's focus on personalized services, innovative culinary experiences, and operational efficiency improvements also contribute to the growth.

Function Rooms and Others

Expected Growth: 4.2%

NH Hotel Group's Function Rooms and Others segment grew 4.2% driven by increasing demand for MICE (Meetings, Incentives, Conferences, and Exhibitions) events, strategic partnerships with event organizers, and expansion of its hotel portfolio in key business destinations, resulting in higher occupancy rates and average daily rates.

Rentals and Other Services

Expected Growth: 3.2%

The 3.2% growth in Rentals and Other Services from NH Hotel Group, S.A. is driven by increasing demand for accommodation and travel services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization and customer experience has led to improved operational efficiency and revenue growth.

7. Detailed Products

Hotels

NH Hotel Group offers a wide range of hotels across the globe, providing comfortable and luxurious accommodations for business and leisure travelers.

Meeting and Event Spaces

NH Hotel Group provides meeting and event spaces for conferences, weddings, and other events, offering customized services and state-of-the-art facilities.

Food and Beverage

NH Hotel Group offers a variety of dining options, including restaurants, bars, and room service, serving local and international cuisine.

Wellness and Spa

NH Hotel Group offers wellness and spa services, including fitness centers, saunas, and massage treatments, to help guests relax and rejuvenate.

Loyalty Program

NH Hotel Group's loyalty program, NH Rewards, rewards frequent guests with points that can be redeemed for free stays, upgrades, and other benefits.

8. NH Hotel Group, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

NH Hotel Group, S.A. faces moderate threat from substitutes, as customers have various options for accommodations, including Airbnb, hostels, and vacation rentals. However, the company's strong brand reputation and loyalty program help to mitigate this threat.

Bargaining Power Of Customers

NH Hotel Group, S.A. faces high bargaining power from customers, as they have numerous options for accommodations and can easily compare prices and services online. The company must maintain competitive pricing and high-quality services to retain customers.

Bargaining Power Of Suppliers

NH Hotel Group, S.A. has relatively low bargaining power from suppliers, as it is a large company with significant purchasing power. This allows the company to negotiate favorable contracts with suppliers.

Threat Of New Entrants

NH Hotel Group, S.A. faces moderate threat from new entrants, as the hotel industry has relatively high barriers to entry, including significant capital requirements and regulatory hurdles. However, new entrants can still disrupt the market with innovative business models.

Intensity Of Rivalry

NH Hotel Group, S.A. operates in a highly competitive industry, with many established players and new entrants vying for market share. The company must maintain its competitive edge through strategic pricing, marketing, and service quality.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.73%
Debt Cost 9.05%
Equity Weight 56.27%
Equity Cost 11.29%
WACC 10.31%
Leverage 77.71%

11. Quality Control: NH Hotel Group, S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NH Hotel Group

A-Score: 6.0/10

Value: 6.9

Growth: 7.7

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Meliá Hotels

A-Score: 5.8/10

Value: 7.5

Growth: 6.8

Quality: 5.7

Yield: 1.9

Momentum: 5.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Dalata Hotel

A-Score: 5.4/10

Value: 5.3

Growth: 7.4

Quality: 4.9

Yield: 2.5

Momentum: 9.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Scandic Hotels

A-Score: 5.4/10

Value: 5.0

Growth: 5.4

Quality: 4.6

Yield: 3.8

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Pierre et Vacances

A-Score: 4.7/10

Value: 6.9

Growth: 7.4

Quality: 3.4

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
PPHE Hotel Group

A-Score: 4.3/10

Value: 3.4

Growth: 5.6

Quality: 3.1

Yield: 2.5

Momentum: 7.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.5$

Current Price

6.5$

Potential

-0.00%

Expected Cash-Flows