FLORIANA, Malta—Luxury hotel operator Corinthia Hotels is ready to branch out of its traditional European and North African bases, while also remaining in the management game of independent and non-Corinthia-flagged hotels.
Corinthia Hotels has nine properties, two of which are in its home country of Malta. The others are in St. Petersburg, Russia; Lisbon, Portugal; London; Prague; and Budapest, Hungary, but also in less-crowded global-flagged destinations such as Khartoum, Sudan, and Tripoli, Libya.
Parent company Corinthia Hotels International Limited is the operating arm of International Hotel Investments, which also manages the Ramada Plaza Tunis, Tunisia and three independent hotels in Malta, Prague and Budapest. The overall company owns and manages eight properties, with 2,902 keys, and manages a further 1,441 keys.
The company has a parallel business model of increasing non-core management opportunities and operating its own flag in cooperation with partners with which it has enjoyed long-standing relationships. Corinthia often invests its own equity.
The principal entity among these partners is a sovereign wealth fund, the Libyan Arab Foreign Investment Company, which was established in 2006 and for half a decade until Libya’s reintroduction into the international arena by the United Nations, Corinthia was subject to sanctions from countries such as the United States.
Busy money
Corinthia’s rationalized portfolio, which has resulted in disposals, has resulted in the company keeping a firm grip on its own keys and being able to buy, renovate and formulate its own distribution system.
“Controlling our own rooms yield the best rates via refreshed booking engines, promotions that point to our website and empowered GMs who are now far more accountable than they ever have been,” said Paul Pisani, Corinthia Hotels’ senior VP, hotel development, and a member of the family that established Corinthia in 1962.
Speaking to Hotel News Now at the International Hotel Investment Forum held this month in Berlin, Pisani said the company’s London property, opened in 2011, has been successful in generating direct bookings. He said Corinthia hotels hold their own in terms of occupancy within their competitive sets and are robust and immune as possible to the downside of financial cycles.
What formerly was missing, according to Pisani, was a support structure that could keep up with Corinthia’s competitors.
“We now have a Ferrari engine in a BMW car, which has helped us bridge ADR gaps in such destinations as London. After that, Corinthia’s strategy was never about having x number of hotels in y number of years but rather putting into place a careful and well-studied approach,” Pisani added.
London and beyond
Today, with obstacles behind it, Corinthia is ready to spread its wings, but it will do so in a controlled manner.
Pisani added that while but most energy is going into the Corinthia Hotels brand that does not mean there will not be a second stand-alone flag at some point.
“Opening our London property in 2011 significantly raised our profile, but it will be the next one that defines us,” Pisani said.
“As the new kid in (London), we had ground to catch up and we had to be different, to provide something fresh yet still authentic for the 21st century. How could we think like The Dorchester did 100 years ago but be both grand and modern,” Pisani said.
Elsewhere, Pisani is looking at primary gateway cities such as Paris, Rome and New York, but two openings in its pipeline veer from that path. Opening at the end of 2014 is the Corinthia Golf & Spa Resort Taormina, Sicily, which will have 130 keys and 158 residences, while opening in 2017 will be a property in the Nigerian capital Abuja, also a management contract with a local partner.
“This will be a 6-star property in what is still virgin territory for international flags. There is high demand there for luxury product, and average daily rates are very good,” Pisani said.