Beating bureaucracy in business
Debono of the Seabank Group, and Tony Zahra of Alpine Holdings,
have developed and opened the Grand Hotel Mercure Coralia San Antonio
in St Pauls Bay, which is under a 10-year management contract
to Accor, the worlds second largest hospitality and leisure operator.
Here, Mr Debono speaks to MIRIAM DUNN about the challenges that such
a major project bring.
How did the Grand Hotel Mercure Coralia San Antonio concept come
The idea first came to me a few years ago, when I was on holiday in
Tenerife. I stayed at a hotel which gave me everything I could possibly
want from my ideal holiday. I felt completely relaxed. Everything was
welcoming and soothing from the décor to the landscaping.
When I returned to Malta, my mind worked on the question of what made
that particular hotel so good. How could I possibly reproduce the effect
back home? I decided that when the right opportunity came along, I would
go for it. Then the Hotel Hyperion was put on the market. After talking
things through with Tony Zahra, we decided to go ahead and buy it. The
rebuilding project was certainly not plain sailing all the way
for example, it took us longer to get our permits than to carry out
the actual construction work. It was one year before we got the green
light, but then we took the whole project from start to finish in just
nine months. The San Antonio has actually been hosting guests for a
few months already now, though the formal inauguration by the prime
minister took place just a few weeks ago.
How should these problems be solved for others who want to take
on major projects such as this?
Time is money, and with all projects, from the smallest shop to the
biggest hotel, there has to be a timeframe in which to get things moving.
We fully understand that the Planning Authority has its duties and obligations,
but there has to be a certain degree of understanding and cooperation.
The Planning Authority and business people should be thinking in terms
of partnership with each other, rather than opposition to each other.
We have a common goal, after all: that of getting Malta ahead. Im
happy to say that I have seen a marked improvement over time, but not
everybody understands the exigencies of business. Delays in government
departments or authorities may mean little or nothing, but in business
they are significant. Interest has to be paid on bank loans. People
have to be paid. Contractors have to be engaged. Future business has
to be hauled in, and commitments met on time.
Are you concerned that the events of 11 September will have a negative
impact on the Grand Hotel Mercure Coralia San Antonios performance?
No. Life goes on and, as the hotels manager has already said,
the wheel has begun to turn in our favour. Under Accors management,
the San Antonio is performing beyond our expectations. There have been
times over the last few weeks when not a single room was available.
We have had inspection visits from foreign tour operators who have expressed
their satisfaction. You should remember that Accor has a powerful, worldwide
sales and marketing network, and that its branding plays a crucial part
in the hotels success. People the world over know and trust the
Accor name. Also, this hotel is a first for Malta: a four star plus,
which is somewhere between a four star and a five star, with full conference
facilities and resort amenities. It has certainly filled a gap in Maltas
Would you like to see more support from the government to help improve
Maltas tourism product?
Most definitely. The government could certainly do more in terms of
upgrading the infrastructure and public areas, to bring these on a par
with countries that are competing with us. Developers are investing
in hotels, but the facilities outside them leave much to be desired.
I am all for encouraging cultural tourism, but other markets cannot
be tapped because we do not have the facilities. If we need better beaches
and more golf courses, then lets go for them. The government must
get moving in this respect the work should be done before the
product is marketed, rather than vice versa. We know that competition
is tough, and we need all the support we can get to help beat it.
The hotels holding company, San Antonio plc issuing bonds
shortly. Can you tell us more about this decision?
Not before we have the green light from the Malta Stock Echange, since
it would be against the rules. But I can say that we are doing this
to assist in the financing of the project. It is a little bit antiquated
to think in terms of the banks as being the only option for project
finance. There are other means, and corporate bonds are on the up and
up elsewhere in Europe. Also, people like bonds. They offer a better
rate of interest than bank deposits do, particularly now that bank interest
rates are being cut. It gives some satisfaction to investors, too, to
see the fruits of their investment as projects grow and perform. It
is a way of doing business that inspires confidence and creates a sense
Do you think that entrepreneurs in Malta are adapting to changing
It is important to change with the times, and to keep ahead of the trends
rather than trailing behind them. The way we have dilly-dallied over
providing Malta with a golf course of international standards is a case
in point. Unfortunately, some people are stuck in the old style of doing
business and seem completely unaware that they cannot continue in that
fashion without destroying their chances of survival. You even come
across business people who think in terms of the cash that comes in
as being all profit theirs to do with as they please. This may
seem incredible, but it happens.
Do you think Malta shows signs of being in recession?
No. It appears that people are observing problems outside Malta and
then adopting a cautious approach in reaction to them, just in case.
Or they may have had shares which were adversely affected in the on-going
bear markets. But theres money around. Its just that people
arent spending that much of it; theyre putting it away.
There are many millions deposited with our banks. The government has
come up with a way of repatriating some of these funds through its special
exemption scheme, which is valid only for this year.
How did you get started in business?
I was born and bred in Mellieha, and started work at the Arches restaurant
20 years ago. I then took over a small bar, which I converted to a restaurant.
Then I acquired the Seabank Hotel, which was then a guesthouse with
just nine rooms. It has since become a hotel with a disco, pizzeria,
and restaurant. Now we also operate the Hard Rock Café (Malta),
the Tunny Complex and have a 33.3% stake in the Porto Azzurro Complex
and of course, own with Alpine Holdings the San Antonio.
What do you see as the key ingredients of a successful business
A clear vision, keeping your objectives firmly within view, careful
cost control, and flexibility from all those involved, including employees.
If you want to make it worth, then you have to do whatever it takes.
I have great faith in Maltese people our human resources are
excellent. We learn quickly, and we are industrious and hard-working.
But I think that the unions do need to be more flexible in their approach,
and always bear in mind that businesses must make a profit, as otherwise
jobs are on the line. There is no place for unrealistic demands.