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Newsletter July 2010

SUCCESS STORY

Sol Meliá Hotels and Resorts

Angel Luis Rodriguez, VP Development of the Spain’s Sol Meliá Hotels and Resorts, discusses the presence of Sol Melia in the Greek market.

Please provide us with a brief profile of Sol Meliá.

Sol Meliá is the largest resort hotel chain in the world, besides an absolute leader in Spain and Latin America-Caribbean. The company, founded in 1956 in Palma de Mallorca by Gabriel Escarrer, has currently more than 300 hotels in 26 countries on four continents, operating under seven brands (Gran Meliá, Meliá, Sol, Tryp, Paradisus, Me Innside by Meliá and Meliá by) and employs over 33,000 people worldwide.  In 2006, Sol Meliá hotel chain was chosen as the most reputable in the world by the Corporate Reputation Institute in New York. In addition, is the third company that generates more confidence in Spain, according to the latest barometer of business confidence, prepared in 2009. Our commitment to excellence has been strengthened with the new company's strategic approach, adopting in 2008 our Global Sustainability Policy, an important subject within the Master Plan for Sol Meliá. As a result of these efforts, Sol Meliá was certified in 2009 as the first "Hotel Company of the Biosphere" by the Institute of Responsible Tourism, supported by UNESCO. In addition, in 2009 Sol Meliá has obtained, for the second time, the Prince Felipe Award for Tourism Excellence, the most important award given to Spanish companies.

You now have a presence in Greece. How does Greece complement your portfolio and business plan?

Greece is one of the most important tourism destinations in the world, given its condition as the cradle of Western culture. Sol Meliá considers it a must to be present in such an important market.

In fact, Gran Meliá Crete is our third hotel on the Greek market, following the opening of Meliá Athens and Sol Kipriotis, in Kos island. Within the growth plans of our company, the Mediterranean area has a special interest because of the importance of tourism and the competitive advantages that Sol Meliá has already demonstrated with other resorts. Greece, and in particular all its islands, receives many tourists each year not only attracted by its cultural heritage, but for its wonderful beaches in the Aegean and the Mediterranean Sea. With the opening of Gran Meliá Crete, we are heading into a very discerning target, a profile that can be found in the tourist visiting this region of the country. This hotel perfectly complements our luxury resorts portfolio and our expectations for growth in a very exclusive segment of tourism that certainly reinforces our quality.

With what properties in Greece are you in partnership/ownership?

We have management and franchise agreements at the moment. Given the difficulties facing the industry at the moment, our priority is to maintain the necessary margins to operate in the market and become stronger. Therefore, the company has based its current growth model in formulas that do not engage in such investment, such as management, leasing or franchise. Within the next two years, the 83% of our new hotels will be incorporated to our portfolio under formulas of management contracts or franchise.

What do you believe are the greatest benefits/advantages of the Greek market for Sol Meliá?

As we said before, Greece is one of the most important tourism destinations, and still has a lot of potential. We think it is a perfect complement to strengthen our presence in the Mediterranean and reinforce our luxury brand, Gran Meliá. In Greece we have found an ideal place to implement our model of "sun and beach", based in quality and differentiation.

Despite the challenging environment globally, and in Greece today, are you confident that Greece is a wise investment decision for Sol Meliá?

Even if we have not invested in the Real Estate component and despite the global environment and the Greek situation specifically, we consider Greece a must. In fact, we are operating three hotels at the moment under three of our brands: Gran Meliá, Meliá and Sol. We firmly believe that there are opportunities to growth and establish our product in the Greek islands, such as Santorini or Mykonos, not to mention the urban market, by launching our urban brands Tryp and Innside in Athens, Thessaloniki . . .