‘2022 saw a significant, speedy recovery’ – IHI Executive Chairman Alfred Pisani

International Hotel Investments plc Executive Chairman Alfred Pisani has highlighted the “speedy recovery” that the group enjoyed in terms of its performance during 2022, despite significant macroeconomic challenges.

He was speaking after the group on Tuesday published its financial results for 2022, a year during which IHI was still experiencing the effects of the COVID-19 pandemic. However, the group posted a pre-tax loss of €1.1 million, a sharp improvement in performance when compared to 2021’s €39.6 million. This was mainly a result of a surge in demand, which prompted revenues to soar to €238.2 million in 2022, an increase of 84.3 per cent from 2021’s €129.3 million. This was coupled by a rise in the costs of providing services, with these rising by 91.4 per cent to €125.6 million in 2022.

Costs were on the rise as a whole during 2022, as IHI recorded €7.6 million in marketing costs (2021: €4.5 million), €36.9 million in administrative expenses (2021: €27.6 million), and €16.4 million in other operating expenses (2021: €5 million).

IHI’s total assets remained relatively stable at €1.7 billion during 2022. The Board of Directors refrained from declaring any dividends for both 2022 and 2021.

Mr Pisani remarked that the pandemic continued to pose “severe challenges” to the group, particularly during the first quarter of 2022. “However, the various vaccination programmes in the different countries within which we operate, coupled with the lifting of travel restrictions, propelled a quick recovery in the second half of 2022, which saw a significant, speedy recovery and an increasing demand for our hotels,” he explained.

Despite this, he also noted that the pandemic was followed by rising inflation, particularly in terms of increases in costs of wages, fuel, and different goods, before adding that energy costs rose by 93.5 per cent year on year.

Additionally, Mr Pisani stated that the war in Ukraine has also had a negative impact on the group’s hotel and commercial centre in St Petersburg, Russia, while its project in Moscow, in which IHI has a 10 per cent shareholding, “has been put on hold”.

“Despite these challenges, which we have persistently countered to the best of our ability, Corinthia has sustained a healthy recovery,” he explained.

“We have reacted quickly to these developments and issued clear instructions to our management to curtail costs efficiently and recover our losses suffered during the pandemic, and no doubt full recovery will require some time,” he added. Mr Pisani also pointed out that clear instructions were given by the Board to management to “keep constant watch” on manning levels so that personnel levels are reduced by “at least 15 per cent less than in 2019”.

He explained that IHI plans to be operating seven new properties in the next 12 to 18 months, thus “further consolidating the strength and image” of the brand.

He also confirmed that the group’s Corinthia Hotel in Prague, Czech Republic, has been put on the market again, after a sale had to be halted due to the pandemic. “We trust that we can be successful this time round, though I hasten to add that we will obviously only sell this hotel if and when the right offer comes along,” Mr Pisani said.

“In view of our upcoming openings, in the next 12 to 18 months, our company will propel itself to new heights. In the pipeline, we have a number of projects in key locations in Brussels (Belgium), Rome (Italy), New York (United States), Doha (Qatar), and Bucharest (Romania),” he remarked. The group also recently signed a management agreement for a hotel in Riyad, Saudi Arabia. Mr Pisani affirmed that these openings will have a “substantial” impact on the Corinthia brand and will also allow for IHI to have “new opportunities”.

“The many challenges and opportunities ahead are most exciting and will intensify our determination to move forward. We have never considered challenges as hurdles but view them as opportunities. By playing our cards correctly, we will indeed become a global leader in our industry,” he added.

Looking ahead, he said that the group is progressing with “determination and passion”, and while there are a number of “great challenges”, they are equalled by “great opportunities to develop further”.

“The excitement of the future fuels us with the energy and belief that Corinthia’s flag will continue to fly with pride and appreciation in more countries to make our name truly global,” Mr Pisani noted.

“We are aware of potential international political and economic turmoil but, as true and valid captains, we shall firmly manage the rudder of our Corinthia ship to overcome the menacing waves,” he concluded.

Also giving his views on the past year, IHI CEO Simon Naudi said: “Whilst reviewing the year from today’s relatively comforting vantage point is an opportune moment for introspection on the recent years’ calamitous events impacting the hospitality industry, it is equally an opportunity to cast our confident eyes on the period ahead which we anticipate being characterised by progressive recovery and rapid growth.”

Touching on the rise in costs, particularly those related to wages, Mr Naudi said that payroll was impacted negatively by the “elimination of pandemic-era subsidies and a gradual rebuilding” of IHI’s manning levels to cater for the increase in demand. This was done while the Board of Directors had directed a policy to retain as many of its workforce “as possible” throughout the pandemic and thereafter.

Turning to IHI’s properties in Russia, Mr Naudi ensured that the group’s hotel and commercial centre in St Petersburg have continued to operate with demand primarily driven from within Russia itself, while also adhering to EU rules and regulations, as well as Russian legislation.

He also reaffirmed that a number of other international properties are in the “advanced stages of construction and refurbishment”, with the hotels in Rome, Brussels, New York and Bucharest all set to open their doors at some point in the first half of 2024.

Concluding, Mr Naudi thanked the shareholders and the Board of Directors for their “continued support and confidence”, as well as Mr Pisani for his “steadfast and inspiring leadership”. He also proceeded to pay tribute to late Director Joseph Fenech, who passed away last August, having provided “decades of services” to IHI.

IHI owns and manages a number of hotels in four different continents, while it has also delved into residential and commercial real estate markets through a range of investments in subsidiary and associate companies. In Malta, it owns the iconic Corinthia Palace Hotel & Spa, as well as Corinthia Oasis, Corinthia St George’s Bay, Radisson Blu Resort & Spa, Radisson Blu Resort, and Marina Hotel Corinthia Beach Resort.