Press Room

Madrid, May 13, 2009

NH HOTELES ANNOUNCES A CAPITAL INCREASE TO STRENGTHEN ITS BALANCE SHEET

• The capital increase will involve issuing two new shares for every three old ones

• All the shareholders represented on the Board of Directors have stated their intention to subscribe to the capital increase and even, in some cases, to step up their holding

• The global slowdown in the hotel industry at the end of 2008 has continued in the first quarter of 2009 and sales reached €276M

• The measures set in motion by NH Hoteles to minimise the impact of the global economic slowdown have led to a €28.3M drop in operating expenses in three months

• Revenues from the real estate activity grew by 49% to €6.2M, as homes and premises in a development in Sotogrande were delivered to buyers

• NH Hoteles' commitment to continuous sustainability means that there has been a further major reduction in energy and water consumption, CO2 emissions and waste production in the Group

Yesterday the Board of Directors of NH Hoteles approved the proposal to be put to the coming Annual General Meeting (16 June 2009) for a capital increase consisting of an issue of 98,646,972 new shares. The aim of NH Hoteles in this operation is to strengthen its Balance Sheet to adapt to the current adverse situation.

Yesterday all the shareholders represented on the Board of Directors said that they are going to take part in the capital increase and some of them even stated that they intend to increase their holdings if possible. The capital increase will mean that the Group will gain in financial flexibility and NH Hoteles will be stronger when the economy starts to turn around. If it is approved by the Annual General Meeting, the capital increase will be made with a right of first refusal and will involve issuing 2 new shares for every 3 old ones.

The global economic uncertainty which is behind the situation which affected the hotel industry in the fourth quarter of 2008, has continued during the first three months of 2009. NH Hoteles has, in recent months, embarked upon a number of initiatives aimed at adjusting its costs, with a view to alleviating the effects of the slowdown in sales. These measures are part of a global rationalization plan that has achieved a reduction of €28.3M in expenses in the first quarter of 2009.

Furthermore, the action being taken by the Group to restructure and adapt to the current situation in all its main areas of action and development includes cancel operations that would require investment commitments, renegotiating its leases, looking into possible asset turnover operations and looking very carefully at future openings and additions. Moreover, in line with the Group's asset rationalization policy, 2 low-return contracts have been cancelled in Italy and a planned contract in South Africa has been cancelled. These measures, combined with the planned capital increase, mean that NH Hotels will be in a more flexible financial position and will strengthen its Balance Sheet, which will allow it to meet its financial commitments during the current adverse economic situation.

First quarter 2009

NH Hoteles invoiced €276M in the first quarter of this year, 14.9% less than last year; EBITDA was negative, €-5.4M, and the Company recorded net losses of €-39.2M. This period, which is traditionally the season with the lowest earnings for the business, combined with the current slowdown in the global economy, which is adversely affecting RevPAR (Revenue per available room), is the reason for the poor performance in the first quarter.

Hotel Activity

The Business Units in Germany, Central and Eastern Europe were the markets that performed the best in 2009. Sales in comparable hotels have, however, fallen back very significantly in Spain, Italy and the Netherlands.

Real Estate activity

The real estate activity of NH Hoteles Group registered sales of €6.2M, compared to €4.1M in the same period of the previous year.

The increase in sales of apartments is due to completion of construction work and delivery of the homes and premises in the Ribera del Marlin development. From the beginning of January up to 31 March deeds have been executed for homes totalling €4.6M have been, a clear sign that the property development is doing well.

As at 31 March 2009, Sotogrande had sales commitments yet to be recorded in its accounts totalling €36.3M. These relate essentially to the Ribera del Marlin development (€31M yet to be executed by buyers in deeds and €5.3M for the moorings in the Marina).

The following table shows the main figures of the NH Hoteles Group on 31st March 2009 and those of 2008:

Additions to the portfolio and signings of hotels in 2009

Since the beginning of this year, NH Hoteles has added 1,027 rooms to its portfolio, which represent 5 new hotels in the Group, 3 extensions to operating hotels and a business training centre. The new openings are located in the main countries where the Company has a major presence.

515 rooms are for the opening of four hotels in Spain (Barcelona, Gijón, Madrid and Vizcaya). Worthy of mention among these is the addition of the management of the restaurant, catering and residential services of Telefónica's Corporate University in Barcelona.

Two new hotels have been opened, one in Milan (Italy) with 398 rooms and the other in Amersfoort (Netherlands) with 114 rooms. Finally, extensions have been added to two hotels in the Mexican Caribbean (304 rooms) and a 23-room extension has been made in Groningen (Netherlands).

In the first quarter of 2009, NH Hoteles has signed for a 65-room project in Frankfurt (Germany) and for another project in Amersfoort (Netherlands), which has already started operating.

The Environment - Consumption and emissions  

NH Hoteles sees the Environment as a strategic interest group. The Company focuses on taking an ecological, sustainable approach throughout its business cycle, from the work of planning, designing and building the hotels up to its everyday operations and the service it provides its customers.

In 2008 the Strategic Plan for Sustainability and Energy Efficiency 2008-2012 was launched. This plan aims to find out what impact the chain has on the environment and to set targets for bringing down energy and water consumption, CO2 emissions and waste generation. This Plan means that the hotel chain will be four years ahead of the target of the European Union's 20-20-20 Plan.

Figures for the first quarter of 2009 show that consumption in all of the areas of interest of the Group has come down considerably. The tables below show the total savings made by the Company in its urban hotels managed under ownership or lease agreement during the first quarter of 2009, compared to 2007:

* Los ahorros totales en la medición de la producción de residuos se publicarán con carácter anual.

ABOUT NH HOTELES

  NH Hoteles (www.nh-hotels.com) ranks third among European business hotels. NH Hoteles currently has 349 hotels with 52,793 rooms in 22 countries in Europe, America and Africa. NH Hoteles has at present 55 new projects for hotels under construction, which will provide more than 8,000 new rooms.

NH Hoteles stands out in quality both as regards services and facilities, with very carefully thought out decoration, intended to please all tastes and making the guest feel comfortable. NH Hoteles’ establishments offer the most advanced technologies designed to facilitate the guest’s communication as well as his work and leisure.

The restaurants are another priority for hotels in the Chain, offering guest first-rate cuisine. Furthermore, the prestigious restaurateur Ferran Adrià, creator of El Bulli restaurant, has entered into an association with NH Hoteles, launching new concepts such as "nhube" and "Fast Good", pioneering spaces in the hotel sector,.

NH Hoteles is a responsible company in the Tourism industry. The Chain offer hotel services which anticipate present and future needs of both our internal and external stakeholders (Employees, Clients, Shareholders, Suppliers, Environment, etc.), the communities where we operate and future generations with maximum attention to detail and efficient and sustainable solutions.

NH Hoteles is listed on the Stock Exchange of Madrid.  

FOR MORE INFORMATION:

NH Hoteles Communication Department
Tel: + 34 91 451 97 62
+ 34 91 451 97 18 (switchboard)
E-Mail: comunicacion@nh-hotels.com

RESERVATIONS

Tel: 902 115 116 (From Spain)
Tel: +800 0115 0116 (Only from A, B, F, G, IRL, NL, I, PT, CH, UK)
Tel: +34 91 398 44 00 (From other countries)
Website: http://www.nh-hotels.com