LATEST ACQUISITIONS BY SOL MELIÁ TO BRING WORLD-WIDE TOTAL TO 410 HOTELS

Leading European hotel chain Sol Meliá has announced the acquisition of Madrid-based TRYP hotel chain for a total of US$ 314.13 million, and the two flagship properties the Fénix Hotel in Madrid and the Colon Hotel in Seville for a total of US$ 65.44 million. With these acquisitions, Sol Meliá's world-wide portfolio will be increased to 410 hotels with 102,450 rooms in 32 countries within the next two years to become one of the leading hotel chains in the world, ranked by number of rooms.

The acquisition involves the incorporation of 60 hotels with more than 9,700 rooms and another 15 hotel development projects for 4,000 rooms in Spain, the Caribbean, Tunisia and Portugal already signed by TRYP, to the 275 hotels, which Sol Meliá currently operates in 29 countries. This is in addition to a further 62 contracts which Sol Meliá has already signed for the operation of new hotels with 17,464 rooms, to be added over the coming months.

The new hotels will strengthen Sol Meliá's global diversification strategy, resulting in a mix of 48% of resort hotels and 52% of hotels located in the world's major cities.

The merger of the Sol Meliá and TRYP hotel groups is expected to generate significant operational, administrative, fiscal and legal synergies, in particular the unification of the ambitious "e-transformation" projects recently initiated by both Sol Meliá and TRYP.

Both companies are investing in technology and implementing SAP ERP platforms which will enable the centralisation of purchasing processes, allowing them to be carried out on line, and thereby improving efficiency and the company's internal administration while achieving more competitive pricing and reductions in operational costs. The new platform allows more efficient hotel operations and the adaptation of all systems to the new technology environment.

Furthermore, the addition of the hotels to the Sol Meliá chain also provides a series of further advantages, such as the use of a sole central reservations system (SolRes), new sales activities, savings in operational costs, the strengthening of loyalty programmes and a greater capacity for strategic alliances.

Sol Meliá obtained consolidated net profits of US$ 51.57 million in the first half of the year, representing an increase of 74% over the same period in the previous year. Revenues grew by 26% to US$ 332.86 million. Operating profits before interest, amortisation and taxes reached US$ 101million, an increase of 41% over 1999.



Notes

* Sol Meliá will further strengthen its clear leadership in the city hotel market in Spain with 97 hotels and 15,000 rooms, including the TRYP hotels, which will now be incorporated in major cities, 20 of them in Madrid. Amongst others, the hotels that will join the company are such significant properties as the Fénix in Madrid, the María Pita in A Coruña and the Colón in Seville.

* Other prestigious Spanish hotels to be added to the portfolio include: the Rex, Capitol, Gran Vía, Reina Victoria, Monte Real, Ambassador and Centro Norte in Madrid, the Presidente in Barcelona, the Sofía Parquesol in Valladolid, the TRYP Valencia, the Rey Pelayo in Gijón and the Orly in San Sebastián.

* In the Spanish resort hotel market, Sol Meliá will add 16 TRYP hotels, including properties such as the Mondariz in Pontevedra and the TRYP Tanau in the Valle de Arán, thus also strengthening its leadership position in this key market.

* As far as international resort hotels are concerned, eight hotels in Tunisia will be added along with one in Andorra, one in Portugal and three in Cuba. In Tunisia and Cuba the company will thus further extend its existing leadership position in two important tourism destinations.

* TRYP has invested over US$ 17.27 million over the past two years in the modernisation of its hotels and, following signature of the agreement, has promised an additional US$ 10.47 million investment. Sol Meliá, for its part, has invested over US$ 130.89 million in the past three years in the total renovation of its hotel portfolio.