1Q11 Results

Profit & Loss Account

RevPAR 47.8 42.9 11.5%

EBITDAR MARGIN 23.7% 22.1% 158 bp

EBITDA MARGIN 17.8% 15.7% 211 bp

EBT MARGIN 2.0% 0.4% 161 bp

NET PROFIT MARGIN 1.6% 0.4% 119 bp

Interest Cover Ratios EBITDA / Net Interest Expense 3.5x 3.6x -2.0%

EBIT / Net Interest Expense 2.0x 1.5x 32.6%

Stock Performance

0

2

4

6

8

10

0

5.000.00010.000.000

15.000.000

20.000.000

25.000.00030.000.000

35.000.000

40.000.00045.000.000

50.000.000

SOL VOLUME SOL LAST IBEX LAST Average Daily Volume 2011 (€) 2.919.844

52- Week High, May 10 2011 € 9.245

52 - Week Low, June 8 2010 € 5.005

Market cap May 12th 11 ( € 8.915 ) 1,647.3Mn € / 2,339.0 Mn $

Bloomberg: SOL SM ; Reuters: SOL.MC

Highlights Revenues and Ebitda increase by 13.6% and 28.9%

Results are explained by double digit growth in RevPAR, primarily explained by LatAm – where US consumption is reinforcing both the Leisure and Business segments –, together with the Canary Islands and European cities. The Canary Islands (RevPAR: +24.7%) are benefiting from political and social unrest in the Middle East and North Africa, while the performance of European cities (+10.3%) is due to the properties in Germany, Paris and London. Performance in the Spanish cities, especially in Tryp by Wyndham hotels, was sluggish in January/February but recovering in March/April. Figures for Q1 are partially skewed by the timing of the Easter Holiday (2010 Q1; 2011 Q2). Revenues include €16.7 mn derived from the sale of one property in Q1.

In overall terms this evolution has led to an increase in total revenues of 13.6%, partially offset by the increase in total operating expenses mainly due to: 1) Higher rental expenses due to three sale & lease back operations; 2) Operational Expenses derived from the sale of the Tryp brand amounting to €1.4 mn; 3) a 2.7% increase in cost per stay partially due to the evolution of electricity, fuel and raw material prices.

The Financial Result has gone up due to a increase of spreads in the framework of the forward start facility signed last August, together with an increase in Exchange Rate Differences that represent €2.6 mn negative.

Better outlook in resorts. Robust summer bookings

During the Easter holidays, although many reservations were made at the last minute, the Company achieved improvements both in occupancy and price. This has led Sol Meliá to post a +10.4% RevPAR increase in Spain for April. Regarding the Spanish cities, although prudence is required in light of the situation with domestic consumption and the elections in May, the Company foresees positive evolution in RevPAR for Q2 and Q3.

Going into the summer season, the current booking position from European tour operators – mainly from the UK and Central Europe – and company-owned channels indicate a positive Q3 to date – around 40% of the annual Hotel Ebitda – in both occupancy and average price in Sol Meliá’s resorts. Since it is early days for other feeder markets - Spain, Russia and Italy – this trend is yet to be fully confirmed on the books. Taking into consideration that the Company has already sold more than 53% of what it sold in the whole of last year, the group is now able to work on improving yield management.

Development Pipeline represents 11% of current portfolio

Year to date, Sol Meliá has signed the addition of five hotels totalling 1,300 rooms, leading to a current pipeline of 30 new hotels with 8.465 rooms, of which 88% are in the Upscale/Premium category, 88% under low capital-intensive formulas and 91% outside Spain.

(million Euros) Mar 11 Mar 10 %

REVENUES 293.7 258.5 13.6%

EXPENSES ( ex - Operating leases) 224.2 201.4 11.3%

EBITDAR 69.5 57.1 21.7%

Rental expenses 17.2 16.5 4.1%

EBITDA 52.3 40.6 28.9%

Depreciation and amortisation 22.9 23.7 -3.5%

EBIT 29.5 16.9 74.4%

Total financial profit / (loss) (20.5) (15.2) -35.2%

Profit/(loss) from equity investments (3.1) (0.8) -306.6%

Continuing EBT 5.8 0.9 517.6%

Discontinuing Operations 0.0 0.0

Profit before taxes and minorities 5.8 0.9 517.6%

Net Profit 4.9 0.8 484%

Net Profit attributable 4.6 1.0 354%

Operational Ratios

2

Table of contents

1. Letter from the C.E.O. and Vice-Chairman ......................................................3

2. Information on Operations................................................................................6

2.1. Hotels......................................................................................................................6

2.2 Sol Meliá Vacation Club .......................................................................................10

2.3 Leisure Real Estate...............................................................................................10

3. Income Statement ............................................................................................11

3

1. Letter from the C.E.O. and Vice-Chairman

Dear friend,

Sol Meliá is releasing its first quarter 2011 results in an environment which has seen no major changes in

the GDP forecast made by the International Monetary Fund for the advanced economies. One of the few

exceptions is the upwards revision of Spanish GDP both for 2011 and 2012. On a global basis the IMF

points out that risks have increased, focusing on electricity, fuel and raw material prices or financial stress

on airlines due to fuel inflation, as well as other macroeconomic circumstances such as the financial

stress on the periphery of the Euro zone, most recently in Greece, high unemployment rates, and the

depreciation of the US dollar.

As far as Travel & Tourism is concerned, figures as of March showed an improvement across the board

in Europe, the Americas and Asia, with RevPAR increasing and double digit growth. Airlines have also

posted increases so far in both passenger numbers and airplane capacity. In Spain, Exceltur – a lobby

group of 25 of Spain's major travel groups and companies – has recently improved their estimate for

Spanish Tourism GDP, forecasting an increase of +2.2% versus last year (+1.2% above its previous

estimate made in January 2011). In Europe, the summer season demand from mainstream tour

operators remains positive. According to international lodging analysts, the historical hotel trend line in a

typical cycle points towards 16 to 26 quarters of rising RevPAR in Europe. This trend is likely to be

protected by a limited supply of new hotel rooms coming on stream.

As far as Sol Meliá is concerned, we have seen a progressive positive trend in RevPAR through the

quarter on the back of the LatAm hotels and resorts – primarily Mexico, Puerto Rico and the Dominican

Republic - , the Canary Islands, and European gateway cities, i.e. London, Paris, Frankfurt, Milan. The

performance of the Canary Islands – where RevPAR has gone up by +24.7% -has been influenced by the

social and political unrest in Northern Africa and the Middle East, and its perception as a safe haven,

leading occupancies in February and March to reach 82.9% ( +19 occupancy points). This effect should

be added to the previous increase of air capacity seen in the archipelago. All in all, RevPAR has

increased by +11.5% in Q1 also within a framework of high guest satisfaction levels, as the rating has

gone up to 80.3%.

With regard to our Sol Melia Vacation Club (SMVC), the increases in weeks sold, revenue and qualified

prospects were due principally to stronger results in our resorts in Cancun (Mexico), and to a somewhat

lesser extent in Punta Cana (Dominican Republic). Throughout the Caribbean in general, we saw

significant growth in upgrade activity from existing members and in the area of bi-annual sales, which

combined with improvements in our capture rates of potential customers and overall growth in the closing

efficiency of our sales operations, had a positive impact on results.

During the first quarter of 2011, we have undertaken a number of important steps to increase the growth

of our vacation club, not only in Spain, a destination which clearly benefits from the confidence and

credibility of our brands, but also with the initiation of pre-sales programs for our soon-to-open resort in

Playa del Carmen, Mexico. These initiatives, such as the launch of a new resort in the Spanish

peninsula (Marbella), are designed to minimize the adverse impacts of the economic crisis and

strengthen our base of operations to allow for increased future growth in the region. The operation of a

vacation club component at the Melia Marbella Banus is a direct response to our members who have

clearly indicated a preference for a vacation club alternative in the Spanish peninsula, not only in terms of

our domestic Spanish market but also in other markets which we believe have excellent potential such as

the British market. In terms of Playa Del Carmen, based on initial results we are seeing approximately

25% of the sales generated in the Cancun area being sales of this new product.

… no major changes in

macro forecasts, increased

risks, inflation of electricity,

fuel and raw materials… …

… positive industry KPI’s in Q1.

RevPAR growth forecasted

going further into the cycle …

… Sol Meliá’s RevPAR

goes up by +11.5% in Q1…

…+3.4% in weeks sold and +5.5% qualified prospective

buyers at (SMVC)…

4

Continuing with the Hotel Business, in relation to the Easter holidays in April, the Company is happy to

verify a rewarding performance in the Spanish resort destinations, principally the Canary Islands and

Costa del Sol, even taking into consideration the bad weather conditions. Cancellations were very limited

in some destinations/hotels. RevPAR in cities like Madrid, Seville and Valencia, and also in the

Caribbean, has also been positive during the holiday period. RevPAR in April has gone up by +10.4% in

Spain, also explained by the effect of the Iceland volcano eruption in April last year, plus the timing of the

Easter Holiday which in 2010 fell in the first quarter, unlike this year.

Going further into the second quarter, the performance of the major European cities is continuing to post

a very positive performance, a trend that is forecasted to be maintained up until year end. In Spanish

cities, we maintain a more conservative outlook, especially in those destinations more affected by

Spanish consumer spending. This part of our business is where we have the lowest RevPAR evolution

expectations, broadly in the medium to high range up until year-end, affected by events such as the

municipal and autonomous community elections in May, and the events which occurred last year, i.e.

Spanish Presidency of the European Community and high occupancy in airport hotels due to air flight

disruptions.

Regarding the second half of the year, if we look at the summer season, current bookings from European

tour operators and, especially, our direct channels are pointing to a clear improvement versus 2010 in

both volume and prices. This enables us to carry out more efficient yield management in the hotels. The

Company points out that price strategy continues to be increasingly important .The evolution of feeder

markets, especially the UK, the impact of the unrest in Northern Africa, and the reduced number of

special offers made by Sol Meliá are behind the forecast so far. The trend remains to be confirmed in the

Italian, Russian and, more importantly, Spanish feeder markets.

In Latin America and the Caribbean, on a same exchange rate basis, the Company foresees a

continuation of the trend in our destinations on the back not only of leisure demand, but also the meetings

and incentives segment. Regarding the latter, we also see a positive trend in our Caribbean resorts in

2012. In relation to next year the negotiations with North American tour operators have resulted in

positive terms for the Company. This is also expected to be the case when it comes to the meetings,

incentives, congresses and events (MICE) whose bookings and requests for proposals (RFP) continue to

strengthen.

Within this context, we are happy to mention that later this year the Company will open two all-inclusive

resorts (one for families with 512 rooms and one for adults with 394 rooms) in Playa del Carmen

(Mexico), implying the reintroduction of the Paradisus brand in Mexico, currently one of the fastest

growing destinations. Although these hotels will not open their doors for a good few months, they are

already showing a healthy booking position, especially when it comes to the MICE segment.

In addition, the announcement of a new resort in Costa Rica in July 2013 – the Paradisus Papagayo Bay

(300) – will help solidify the Paradisus Resorts brand as a leader in the luxury all-inclusive market

segment.

All in all, current trading and outlook has somewhat improved as to the last quarterly report. On the cost

side, for the whole year we must take into consideration some effects that already had an effect in Q1, i.e.

the increase of operating expenses at the overheads level due to the Tryp by Wyndham franchise

agreement that represent an increase of 3 million Euros for the whole year, an increase in rental

expenses following the sale and lease back agreements for two hotels which when combined represent

an additional impact of 6.5 million Euros versus 2010. We should also take into consideration the

evolution of prices of electricity, fuel and raw materials in international markets and their potential impact

on Food and Beverage margins. Nevertheless in Q1, Food and Beverage margins have improved by 119

basis points

… perspectives:

comparatively better in

the worldwide resorts …

… more conservative in

the Spanish cities, but

solid in European Capitals

…

… positive booking position

in the Spanish resorts. Price

Strategy and Yield

Management continues to be

increasingly important …

… Caribbean contribution

to be increased with the

opening of two resorts in

Mexico …

… Sol Meliá offset

increases in Raw Materials

costs with improvements

F&B margins …

5

Following with the development Plan we refer to on the front page of this report, we are happy to highlight

the agreement to open a new hotel under a management contract in Indonesia in 2013, the five star Meliá

Surabaya, increasing our presence in the Asia-Pacific region, where the main priority remains China. The

expansion plans will continue to materialize mainly through local partners in order to develop further

hotels & resorts. In this regard, we are happy to remind that Sol Meliá recently signed an agreement with

Jin Jiang, the leading Chinese hotel chain and second largest travel agency group in China.

The alliance with Jin Jiang lays the foundation for a long term partnership encompassing hotel development, marketing and sales, reservations systems and loyalty programmes. The partnership will focus in a first stage on 6 hotels managed by Jin Jiang in major Chinese cities and 6 hotels managed by Sol Meliá in major European capitals. The 12 hotels will be incorporated in both Companies respective owned distribution channels.

This strategic agreement will allow both chains to grow in the market in which the other enjoys competitive advantages through a joint growth strategy in China and Europe. Sol Meliá is already working on the incorporation of new hotels in cities and resorts in the country. It is important to point out that the adaptation of hotel services to the needs of Chinese and European guests is one of the major challenges for both companies.

As far as development is concerned, Sol Meliá as a leading resort Company worldwide has recently

widened its geographical reach in key resort destinations thanks to the signature of new management

contracts in the Upscale/Premium segment in Cape Verde, Zanzibar (Tanzania) and Dubai. These

establishments are currently open or will be throughout the year, adding to the leisure diversification

strategy of the Company and increase in the ties with partners while reaffirming customer loyalty.

In terms of liquidity, the Company has increased the amount of credit facilities that expired throughout the

year. As occurred last year, exploiting the current market situation in which interest rates are particularly

low, Sol Meliá works to maintain the weight of the fixed rate debt at approximately 70%. The interest rate

swaps signed in an environment of low interest rates are now paying off with the recent rise of Euribor

and the forecasts on its evolution therefore protecting the interest cost for the current year. Cash interest

expense is forecasted to be around 4.5% in 2011.

Financially speaking, considering current liquidity level up to March 2011, stands at close to 341.1 million

Euros, therefore guaranteeing short and medium-term debt repayments that represent 320.1 million

Euros for the remaining of the year and 2012 ( 87.1 million plus 233.9 million).

Strategically speaking, as previously discussed, the Company’s senior management team is creating the

basis for the 2012–2014 Strategic Plan where the reinforcement of our role as a strong and reliable

management company will be one of the priorities. Guest experience and the consolidation of brand

equity will be a must in this regard, in addition to an appropriate approach to our people talent strategy. It

is our commitment to strengthen our real estate management by revising the minimum required return on

capital employed in Company owned hotels, therefore assuring a more efficient asset rotation model. In

terms of expansion, the Company will continue to reinforce the markets mentioned before, i.e. China,

Latin America, the Arab Gulf States, certain gateway cities in the US and European cities primarily via low

capital intensive formulas and, when capital is required, primarily via joint ventures.

Gabriel Escarrer

Vice Chairman and CEO

… Development Plan with

emphasis in China …

… alliance with Jin Jiang

in China …

… Liquidity guarantees short

and mid term maturities. IRS

signed in 2009 and 2010,

protects Company interests

cost …

… more efficient asset

rotation going into the

future …

6

2. Information on Operations

2.1. Hotels

RevPAR for owned and leased hotels has increased by 11.5% during the first quarter of the year, mainly

explained by the 7.1% increase in occupancy, while ARR also increased by +4.1%. Positive RevPAR

evolution during the quarter is explained by the favourable evolution of occupancy rates (Jan: +5.1%,

Feb: +7.2%, Mar: +8.5%).

In terms of prices, the Company has improved its ARR by 4.1% in overall terms, achieving increases in all

brands and in 58% of the hotels. Food & Beverage revenues have increased by 9.0% while F&B margin

has increased by 119 bps up to 37.6%. Room revenues increased by 9.8% while room margin increased

by 23 bps up to 66.7%.

The overall effect is positive in light of GOP margins and the Ebitda margin, with increases of 108 and 52

bps respectively.

RevPAR for the Sol brand (100% resort, 100% Spain) has presented the best performance compared

with the whole portfolio of brands, increasing RevPAR by +23.7% mainly due to Occupancy (+18.7).

The positive performance of the brand may be explained by the positive development of the Canary

Islands (RevPAR +20.9%) due in part to the political unrest in Northern Africa impacting positively in

February and especially in March, together with an increase in the number of flights arriving to the

islands.

In terms of segmentation, tour operator business, the most important segment for the brand, recovered to

generate the performance in occupancy. Regarding nationalities, the Company highlights the increase in

the number of Scandinavian guests, given that tour operators from these feeder markets changed their

schedules quicker and more extensively after the protests in northern Africa. The increase in the number

of tourists from Germany, Netherlands and Italy also contributed positively.

Operating Expenses (excluding rental expenses) for the Sol Brand increased by 4.7%. while total cost

per Stay decreased by -2.6% on the back of the decrease in personnel costs per stay thanks to the

rationalization of personnel management according to opening periods.

In terms of Available Rooms, the decrease (-11.5%) is partially (about 27%) related to the late opening

of Sol Magalluf in the Balearic Islands.

Me Madrid

7

The Tryp by Wyndham brand (100% City; 75% Spain) has seen a RevPAR decrease of -0.1% mainly

explained by a decrease in Occupancy of -3.2%, partially offset by increases in ARR of +3.2%.

The performance of the hotels in Italy, and to a lesser extent in France and Germany, did not compensate

the evolution of the hotels in Spain, especially in Madrid, affected by lower demand in Business Segment

(mainly Corporate and Transient Business guests), still affected by corporate travel savings policies. In

the case of Madrid it is fair to comment that the brand has had difficult comparables due to the fact that

during the first quarter last year there were some one-off events such as the air traffic controllers' strikes

in Spain and France and the problems caused by snow in Madrid in January 2010, both benefiting

airports hotels. On the other hand we should take into consideration the fact that last year Spain held the

Presidency of the European Union, which allowed increases in occupancy in the main capital cities.

Despite the decrease in RevPAR in overall terms, the evolution of RevPAR in March grew by 6.0% for the

brand on the back of: 1) a better yield management strategy 2) a recovery in the leisure segment at the

weekends which also allowed the Company to increase prices; 3) the increase in occupancy between

Tuesday and Thursday thanks to negotiations with Key Accounts, and; 4) the positive impact of the

launch of some sales programmes focused on transient guests.

Operating expenses (excluding rental expenses) increased by +4.4% in the first quarter of 2011, while

total cost per stay has increased by +8.0%. The decrease in total stays generates part of the increase in

Personnel Costs per Stay, given that hotels must retain a certain component of permanent staff.

The increase in Available Rooms (+0.9%) item is explained by the opening of Tryp by Wyndham

Condalmar (Barcelona, Spain) and Tryp by Wyndham Berlin Mitte (Berlin, Germany), compensated by

the disaffiliation of Tryp by Wyndham Almussafes (Valencia, Spain) and Tryp by Wyndham San Lázaro

(Santiago, Spain).

In Q1, the Meliá brand (49% Spain, 20% LatAm, 31% EMEA) has seen RevPAR increase by +9.7%, on

the back of both increases in Occupancy (+6.0%) and ARR (+3.5%).

Regarding the Resorts, during the first quarter RevPAR increased by +9.3%, on the back of the

performance of the Spanish Resorts (RevPAR +16.3%), especially those located in the Canary Islands

given the increase in Occupancy of +35.5%, leading to a +30.2% RevPAR increase. Regarding LatAm

(RevPAR +2.0%), the best performance was registered in our resort in Cozumel (RevPAR by +14.7%),

benefiting from the increase in the number of flights arriving from Canada.

In Cities, the positive evolution is due the performance of our hotels in the main core markets: Germany

(RevPAR: +16.0%), France (RevPAR: +13.0%), United Kingdom (RevPAR + 10.9%) and Italy (RevPAR

+10.8%) with an important recovery in ARR. The strong performance of the cities mentioned before,

compensated the slower performance of the Spanish Cities, where RevPAR increased by 2.7% mainly

due to the recovery in Business Groups, especially those related to Meetings and Conventions.

During first quarter of 2011, Operational Expenses (excluding rental expenses) increased by +6.5%

while total cost per stay increased by 2.0%, +1.8% when excluding the changes in the perimeter.

In terms of Available Rooms, the increase (+1.4%) is explained by the incorporation of the Meliá

Valencia Palacio de Congresos (Valencia, Spain) in February 2011.

Me Barcelona

8

During the first quarter of 2011, Premium brands (77% of the portfolio in the Americas) increased their

RevPAR by 15.8%, mainly due to increases in Occupancy of +12.8%.

In LatAm, RevPAR increased by 17.6% (+19.4% in US dollars) on the back of the evolution of our resorts

in Mexico and the Dominican Republic, where occupancy grew by 14.3% as consequence of 1) a

recovery in the business group segment as well as Tour Operator activity, and 2) more favourable

comparables in the Dominican Republic given the earthquake in Haiti in January 2010. Furthermore, it is

important to mention the evolution of our resort in Puerto Rico, where the hotel has recovered the

business group base, leading to an increase in occupancy of +20%.

In Europe, RevPAR grew by 10.1% thanks to the increase in occupancy in the hotel Gran Meliá Salinas

(Canary Island) and the Gran Meliá Fénix in Madrid. Regarding the Operational expenses, they increased

by 14.1% while cost per stay decreased by -0.5%.

Table 1: Hotel statistics Owned and Leased hotels 11 / 10 (RevPAR & A.R.R. in Euros)

%

Occupancy RevPAR A.R.R. Available rooms

(‘000 units)

SOL 2.011 59.3% 23.0 38.9 445.4

% o/ 2010 18.7% 23.7% 4.2% -11.5%

2.010 49.9% 18.6 37.3 503.3

TRYP BY WYNDHAM 2.011 52.7% 35.0 66.4 705.3

% o/ 2010 -3.2% -0.1% 3.2% 0.9%

2.010 54.5% 35.1 64.4 699.3

MELIÁ 2.011 65.7% 58.1 88.5 986.3

% o/ 2010 6.0% 9.7% 3.5% 1.4%

2.010 62.0% 53.0 85.5 972.6

PREMIUM 2.011 73.0% 71.4 97.7 418.8

% o/ 2010 12.8% 15.8% 2.6% -0.2%

2.010 64.7% 61.6 95.2 419.6

TOTAL 2.011 62.2% 47.8 76.9 2,555.8

% o/ 2010 7.1% 11.5% 4.1% -1.5%

2.010 58.1% 42.9 73.9 2,594.8

Paradisus Palma Real

9

Table 2: Hotel revenues split 11 / 10 for owned/leased hotels

Room Revenues F&B and Other Total Revenues

SOL 2.011 10.3 6.8 17.0

% o/ 2010 9.5% 6.4% 8.2%

2.010 9.4 6.4 15.7

TRYP 2.011 24.7 9.1 33.8

% o/ 2010 0.7% -6.7% -1.4%

2.010 24.5 9.8 34.3

MELIÁ 2.011 57.3 39.7 97.1

% o/ 2010 11.3% 4.5% 8.4%

2.010 51.5 38.0 89.5

PREMIUM 2.011 29.9 38.8 68.7

% o/ 2010 15.6% 12.5% 13.8%

2.010 25.9 34.5 60.4

TOTAL 2.011 122.2 94.5 216.7

% o/ 2010 9.8% 6.5% 8.3%

2.010 111.3 88.7 200.0

9 Gran Meliá Palacio de Isora

10

2.2 Sol Meliá Vacation Club

Total number of weeks sold represented a 3.4% increase versus 1Q 10. The increase in the number of

unit sales is mainly explained by the performance of our resorts in Mexico and, to a lesser extent, in the

Dominican Republic, which have increased occupancy rates together with the implementation of

alternative prospecting methods such as the launch of in-house marketing programmes to increase the

rate of closing efficiency.

2.3 Leisure Real Estate

In the first quarter, 16.7 million Euros of capital gains were generated from the sale of the hotel Meliá

Lebreros (Seville – Spain) for 49.3 million Euros, compared to 5.5 million Euros in capital gains generated

in Q1 2010 from the sale of Tryp by Wyndham Los Gallos (Córdoba – Spain).

Regarding the other real estate businesses, by country:

– In the Dominican Republic, revenues increased by 15.8% (an additional 0.4 million Euros)

mainly derived from the increase in the stock of land for re-sale once the Company recovered

some plots of lands owned by delinquent clients.

– In Venezuela, rentals of shopping premises in the basement of the hotel Gran Meliá Caracas

remained flat versus the same period in 2010.

Meliá Barcelona

11

3. Income Statement

� Revenues

Total revenues grew by +13.6% (additional 35.2 million Euros). Revenues from the Hotel Division

increased by 8.3% while Leisure Real Estate generated +16.5 millon Euros (5.5 million in 2010) on the

back of the capital gains generated through the sale of the hotel Meliá Lebreros. Regarding Sol Meliá

Vacation Club, revenues increased by +10.2% (additional 2.0 million Euros) while Other Revenues

remained flat (-0.1million Euros).

� Operating Expenses

Total Operating expenses have increased by 11.3% (22.8 million Euros). Raw Materials increased by

10% (additional 3.5 million Euros) mainly explained by Sol Caribe Tours (Tour Operator in Cuba) derived

from the increase in its activity. Excluding that effect, raw materials would have increased by 3.0%.

Total Personnel Expenses increased by 7.7% (6.8 million Euros) while at the hotel level increased by

5.8% (3.9 million Euros). Regarding hotel division, excluding changes in the perimeter Personnel

expenses would have increased by 4.8% while per stay increases by 1.1%.

Other Operating Expenses at the Hotel Level increased by 9.0% (+4.9 million Euros). When excluding

perimeter and exchange rate differences, other operating expenses would have increased by 7.8%. At

the Consolidated Level, this item increased by 16.1% (12.4 million Euros).When excluding perimeter,

forex and extraordinary, this item would have increased by 12.8%.This increase could be explained by

the fees paid to Wyndham Hotel Group after the sale of the Tryp Brand and the new franchise

agreement, together with higher advertising expenses mainly in the Americas to complement the efforts

made by the sales force to increase the activity in our hotels and resorts as well as the expenses linked to

our loyalty programme due higher activity.

Regarding rentals, it increased by 4.1% (0.7 million Euros) mainly due to three operations of sale & lease

back (Tryp by Wyndham Gallos, Sol Pelicanos-Ocas, Meliá Lebreros) as well as the incorporation of four

hotels (Innside Dresden, Tryp Condal Mar, Tryp Berlin Mitte and Meliá Valencia Palacio de Congresos)

compensated by the disaffiliation of two rental contracts in Spain. Excluding the changes in the perimeter,

rentals would have increased by 1.7% (0.3 million Euros).

� Ordinary Profit / Net Profit

Total financial loss increased by 35.2% mainly due to the increase in the Net Interest Expense by 3.5 million Euros on the back of: 1) the impact of the 3 Month Euribor pick-up by 44 pbs, 2) Increment of spreads within the framework of Forward Start Facility signed in August 2010 and 3) decrease in 1 mn in Financial Income partially explained by financial capital gain generated last year. Additionally, Total Financial loss also has been affected by the Exchange Rate Differences, which decreased by 1.7 million Euros, due to the depreciation of the US dollar.

ME Vienna

12

Table 3: Sol Meliá Consolidated Income Statement

Million Euros Mar 11 Mar 10 %

Hotels 216.7 200.0

Leisure Real Estate 25.0 8.5

Vacation Club 22.2 20.2

Other Revenues 29.8 29.9

Total revenues 293.7 258.5 13.6%

Raw Materials (38.9) (35.4)

Personnel expenses (95.7) (88.8)

Other operating expenses (89.6) (77.2)

Total operating expenses (224.2) (201.4) 11.3%

EBITDAR 69.5 57.1 21.7%

Rental expenses (17.2) (16.5)

EBITDA 52.3 40.6 28.9%

Depreciation and amortisation (22.9) (23.7)

EBIT 29.5 16.9 74.4%

Net Interest Expense (14.8) (11.3) 31.5%

Exchange Rate Differences (2.6) (0.9)

Other Interest Expense (3.1) (3.0)

Total financial profit/(loss) (20.5) (15.2) 35.2%

Profit/(loss) from equity investments (3.1) (0.8)

Continuing Earnings Before Taxes 5.8 0.9 517.6%

Discontinuing Operations 0.0 0.0

Profit before taxes and minorities 5.8 0.9 517.6%

Taxes (0.9) (0.1)

Group net profit/(loss) 4.9 0.8 483.7%

Minorities (P)/L (0.3) 0.2

Profit/(loss) of the parent company 4.6 1.0 353.9%

Meliá Istrian - Croatia