International Hotels Investments (IHI), the holding company containing the Corinthia brand of hotels, has recorded a net loss after tax of €27.495 million in 2021.

The year was dominated by the COVID pandemic, but the group reports that its hotel operations in Malta and London fared among the best in its portfolio in terms of speed to recovery.

In Malta, its three owned hotels in the St George’s Peninsula, delivered a collective gross operating profit of just under €8 million, a significant proportion of the €45 million overall operating results recorded across the group.

The group’s 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 company’s London hotel ended the year with an impressive gross operating profit of €18.5 million, representing a “remarkable turnaround” reflecting the earlier easing of restrictions in the UK and the reputation enjoyed by Corinthia in the local British market, which is the largest source of business for the hotel.

The rest of IHI’s owned portfolio in Prague, St. Petersburg, Budapest, Tripoli and Lisbon made up the remaining contribution to the total gross operating profits registered in its hotels of €45 million.

Regarding its hotel in St Petersburg, the hotel is “following closely” the events in Russia, referring to the country’s invasion of its neighbour Ukraine and the subsequent sanctions launched against it, and states both the hotel and the Commercial Centre in St Petersburg are presently fully operational.

IHI’s interest in St Petersburg represents approximately eight per cent of the group’s total revenue and assets and it, therefore, does not expect these events to have an overall material impact on its performance.

In terms of overall financial results, IHI recorded revenue in 2021 of €129.3 million, which was just under half its revenue in 2019, itself a record year. This was largely in line with the group’s predictions it made at the start of the year.

At the time, it set itself a target of achieving group operating results before depreciation and fair value higher than its overall interest costs. It achieved this, by retaining strong disciplines and cuts on all its costs, including payroll, which was by far its largest single operating cost.

Far-reaching cuts were made in 2020 and continued into 2021, with “much sacrifice” and support from its employees, for which it thanked them in the report.

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

Adjusted operating results were €22.657 million, while net loss before tax was €36.751 million and net profit after tax was €27.495 million.

In its annual report, IHI shone its spotlight on 2021, focussing its efforts in the latter part of the year to rebuild its operations as travel restrictions eased across the world.

Overall employee levels across the group, including both owned and managed businesses, plummeted from a high of 4,642 in February 2020 to a low of 2,367 midway in 2021 as a consequence of deep cuts, redundancies and voluntary relocations back to home countries of many of its expatriate workers.

IHI is now back up to almost 3,000 workers, which its CEO Simon Naudi describes as a “sure sign of a gradual recovery in our hotel operations across several countries.”

Development

IHI is involved in six hotel projects, either as an investor or through the Corinthia Hotels Group and other subsidiaries, as an operator or development manager.

Amongst them, in Rome, Corinthia Developments International Limited (CDI) had earlier entered into an agreement with the Reuben Brothers of the UK, who acquired the former Bank of Italy HQ and are now working with IHI to convert this property into a 60-key luxury hotel.

The main contractor has been engaged and work has started to redevelop, and in some areas rebuild, all internal areas. IHI is currently recruiting the team that will take over the management of the hotel once it launches next year.

In New York, CHL has entered into another agreement with the Reuben Brothers, owners of a hotel formerly trading as The Surrey on the prestigious Upper East Side. The property is undergoing a total renovation to be relaunched as a luxury hotel.

Corinthia is providing technical services during the design and development phase and will eventually manage the property as a member of the Corinthia portfolio. Strip out works have been ongoing and design development is nearing completion.

In Brussels, IHI led the acquisition of the former Grand Hotel Astoria via our company NLI Holdings, which also owns the Corinthia Hotel & Residences in London. The main contractor is on-site and the entire superstructure will be up by the end of 2022.

In Malta, IHI owns the 85,000m² land plot formerly housing the Ħal Ferħ Holiday Village, long since derelict and privatised. IHI’s plans here have been publicly launched in 2021, featuring a 162-room luxury Corinthia resort and 25 residential villas to be serviced by the hotel.

A full planning application has been submitted which indicates the standard to which IHI intends to develop this property, not rising more than two floors in parts, and occupying solely 16 per cent of the actual land, the rest being used for landscaping and outdoor activities.

A UK-based designer, Goddard Littlefair, has been engaged, as well as WATG from the UK too, to handle all landscaping design. Works will commence immediately once permits are in hand expected for later in 2022.