Despite experiencing a drop in turnover of €24.64 million in 2009, International Hotel Investments plc (IHI) has managed to withstand the recessionary effects of the economic downturn, according to IHI managing director Joseph Fenech.
IHI chairman and chief executive officer Alfred Pisani addressed shareholders at the group’s annual general meeting at the Corinthia Hotel in St George’s Bay on Friday.
He said IHI acted in a cautious and focused manner throughout 2009, which was a difficult year for most sectors as a result of the global financial and economic crisis.
“I believe that despite the various odds we encountered last year, IHI succeeded in weathering the storm and came out possibly stronger,” Mr Pisani wrote in the IHI annual report, adding that while refraining from being overly optimistic, this year is showing preliminary signs of recovery, as well as positive and encouraging developments in world tourism.
In 2009, total revenues generated by IHI’s hotels and real estate business decreased by 19.3 per cent as a result of lower demand in the cities where the group operates.
Notwithstanding the drop in turnover of €24.64 million (from €127.96 million in 2008 to €103.32 million last year), the reported figures show that there was a corresponding saving in operational costs of €12.91 million.
IHI had two main projects in 2009. In March the group was awarded a turnkey contract for the development of the Corinthia Hotel and Residences in London, a €300 million investment of significant importance to the long-term future of the company.
The project features the redevelopment and reconstruction of a landmark 19th century property, the former Metropole Building, and the adjoining 10 Whitehall Place.
The project is among the largest ongoing real estate developments in London’s city centre. It features a 300-bedroom luxury Corinthia Hotel comprising the largest bedrooms and suites in its category in London.
In May last year, IHI completed the redevelopment of the Corinthia Hotel and Commercial Centre in St Petersburg.
The development is spread over three adjoining buildings stretching over a 100-metre frontage on the main boulevard of the city. The project involved the refurbishment of the existing hotel and the demolition and reconstruction of the two adjoining properties.
Mr Fenech said the group’s 19.3 per cent decrease in revenue was mainly due to lower occupancies and lower average room rates achieved in the group’s hotel properties located in central Europe.
He pointed out that three of IHI’s six hotel properties are located in central Europe and said IHI’s overall reduction of 19.3 per cent in revenue against the 35.4 per cent average drop in central Europe shows that the group’s geographical spread of hotels, particularly its operation in north Africa, has helped it minimise the impact of the recession and economic downturn in Europe, which is the main source of the group’s feeder markets.