Corinthia to target 4-star space under new brand to be launched by 2023

International Hotel Investments Group, which includes the Corinthia Hotels, is setting up a separate brand to operate in the 4-star tourism space.

In its annual report and financial reports for 2021, published on Wednesday, Group CEO Simon Naudi noted that the company directly owns or manages for others, several hotels, not branded as five-star luxury Corinthia, for which it now wants to secure a long-term in-house marketing and branding strategy.

“Currently, we operate these hotels under their own independent name or under franchise from other brands such as Radisson and Ramada Plaza,” he says in his report. “Work has started to identify a team and international advisory agencies to select a name and draw up property and operating standards, a marketing set-up and a distribution network.”

The Group’s aim is to launch this brand by 2023.

It is also in discussions with partners, and has an agreement in place with one of its shareholders LAFICO, to operate any hotels they may own worldwide which require services under this new brand.

“For sure, the four-star sector is a larger, albeit more competitive market worldwide than the luxury hotel space occupied by the Corinthia brand, and we look forward to reporting growth on this front in the months and years ahead,” Naudi said.

Revenues

The Group recorded €129.3 million in revenues for 2021, just under half of the revenue in 2019.

Operating results before depreciation and fair value position reached €26.5 million in 2021, versus operating results before depreciation and fair value loss of just under €4 million in 2020, a €30 million turnaround.

Operations

Hotel operations in Malta and London fared among the best in terms of speed to recovery within IHI.

The Corinthia in London ended the year with a gross operating profit of €18.5 million, a remarkable turnaround reflecting the earlier easing of restrictions in the United Kingdom and the reputation enjoyed by the brand with the local British market, the largest source of business for the hotel.

In London, during 2021, the company also closed on the sale of the Penthouse at the Corinthia Residences, a stand-alone building adjoining the hotel, for a figure in excess of £30 million. As with the rest of the residences sold in years prior, we remain the freeholders and provide concierge, security and other services to their occupants.

In Malta, the three IHI hotels in the St George’s Peninsula delivered a collective GOP of just under €8 million. The other two hotels on the island, the Radisson Golden Sands and the Corinthia Palace delivered a further €3 million in aggregate gross operating profit.

The rest of the IHI portfolio in Prague, St. Petersburg, Budapest, Tripoli and Lisbon made up the remaining contribution to the total GOP registered in all of the Group’s hotels of €45 million, augmented by further income of €10 million from rents of shops and offices in commercial centres in Tripoli and St Petersburg.

Most of these latter hotels operated solely on the basis of their local markets, given international travel restrictions. This was especially the case in St Petersburg where all customers in 2021 were almost exclusively from inside the Russian Federation, a situation that is expected to continue well into 2022 given severely curtailed flight schedules and international sanctions on Russia.

Funding

On the funding front, the Group successfully launched a 10-year €80 million Bond on the Malta Stock Exchange carrying a coupon of 3.65% p.a., which was fully subscribed.

Part of the Bond has gone to fully repay a maturing Bond of €20 million, the rest will be deployed on development projects in various countries.