Meliá's 11.7% RevPAR Rise Was Swamped by a €79.4M Cuba Write-Off

The Cuba exit masked a still-functioning core business

Meliá's first-half results look weak at first glance, but the key distinction is simple: the core hotel group remained operationally healthy, while the Cuba unwind hit the accounts all at once. That makes the report more interesting than bearish.

Separate the reported loss from operating performance

Before the Cuba charge, Meliá posted €83.5 million of profit from continuing operations. It then booked a €79.4 million provision tied to the Cuban unwind. That explains why reported profit suddenly looked poor, but it does not by itself mean the operating engine broke.

What changed in Cuba

The break came quickly. Meliá said it would end all management and commercialisation services in Cuba, effective from 24 July 2026. All five CEIBA hotels had been branded as Melia, so the company's brand presence there is now gone. Management also said it had decided in late May to pull out of part of its Cuban footprint because of operational, legal, and financial pressure.

What investors should watch next

The debate is straightforward. Bulls can argue the bad news was contained and front-loaded. Bears can argue that walking away from Cuba is a reminder of how quickly politically or regulatorily sensitive markets can turn. Either way, the next read on the business is summer demand. Meliá ceased operations of its 34 hotels in Cuba between June and July, and management is looking to another strong summer season for the next sign of whether the rest of the portfolio can carry the story.

Demand and pricing still look healthy outside Cuba

The real question is whether the rest of the chain still has enough traffic, pricing power, and balance-sheet cushioning to absorb the Cuba exit. On the operating data available so far, the answer leans yes.

The 2025 full-year backdrop

Meliá reported RevPAR growth of +6.6% in constant currency, while revenue excluding capital gains rose 3.2%. That is not an explosive print, but it does suggest the core business was still moving in the right direction.

The first-half picture is stronger than the headline

For the first half, Meliá said RevPAR increased by 11.7%, revenues excluding capital gains rose 7.1%, and EBITDA excluding capital gains increased 2.5% to €244.7 million. Taken together, that points to a business that was still growing and holding margins better than the headline loss suggests.

Cuba timing limits how much the exit already shows up in results

There is an important timing caveat. Meliá had already decided in late May to pull out of 15 of its 34 hotels in Cuba, and the broader halt in Cuban operations happened between June and July. So the first-half operating figures do not yet fully reflect the post-exit portfolio, even if they were not completely contaminated by it either.

Leverage and direct bookings matter if summer disappoints

The balance sheet is not under immediate stress, but it is not completely relaxed either. At the end of Q1, net debt increased by €27.6M to €2,228.5M, mainly because of seasonality and investment activity. For a group of this size, that looks manageable rather than alarming, but it does make cash generation more important if summer demand softens.

One encouraging detail from the first half is that Direct Customer sales rose 12%, a sign that booking mix and pricing discipline are still working in the company's favor.

The near-term scoreboard

The core portfolio outside Cuba still looks operationally sound. The next few weeks should clarify whether that durability is durable enough to offset a one-off write-off, or whether the Cuba exit is a sign of wider strain.