• Sol backs off from Occidental – for now

Sol Melia has dropped out of talks to buy Occidental Hoteles but remains keen on consolidating the industry.

It also wants to increase the free float of its shares, currently two-thirds held by the founding Escarrer family, and an acquisition and rights issue is a likely route to achieve this.

The world’s largest resort operator is currently enjoying a strong trading performance. It reported third quarter results last week that showed sales up 10.1% to Eu964.7m with EBITDA up 13.0% to Eu265.3m. Net profit was up 44% to Eu122.2m.

The European resort division increased its revpar by 7.2% thanks to the best performance in Spain for five years. For the first nine months, the increase was 5.0%.

But the European city division remains the star performer with a 10.4% increase in revpar. The absorption of oversupply in key Spanish cities meant that revpar in Spanish cities was up 13.3% for the third quarter.

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