Mr Simon Naudi CEO sits with us and shares the secrets of a brand that has grown and grown. The sky is the limit for Corinthia but it is certainly not the result of the manna that fell from heaven. His is a very sincere take on how the company took off many years ago and continues to fly higher.
So what makes this brand so successful?
Over the years and thanks to the hard work of many, many people, thousands of people, and the leadership that has been shown throughout, by the Chairman and the board, we have come to a stage that the company is at the threshold of global expansion.
Corinthia is one of Malta’s foremost companies building on a success story that has endured since the opening of a restaurant in Malta in 1962, following through, with the opening of a hotel in Malta initially and then eventually in several other countries.
We are already a global player, in that today our company IHI plc has active investments and operations in multiple countries in Europe, in Africa and in the Middle East and we have costumers originating from all over the world. So as a business you can say that we are a global player.
Does this mean that Corinthia has reached its objectives?
Not at all! This is perhaps only the beginning of becoming an even larger company, a more profitable company for the benefit of our shareholders and bondholders and it is the policy of the company, of the board which us, as executives, are here to implement, to ensure that the company establishes a footprint in more and more cities and resorts around the world.
But how does this translate into benefits for the shareholders and bondholders exactly?
Each and every investment in and of itself generates a return and secondly, as and when we expand the business through the brand ‘Corinthia’, in operations, in key markets around the world, that presence in-itself is accretive to the rest of the Group.
So by way of an example, when we opened the hotel in London not only did the London investment generate a return on the investment we made in London, and continues to generate a return, but the presence of the brand in London has opened up doors for us in many other places.
And this no doubt will be the case when we open our next round of hotels in key cities such as Dubai where we have a hotel under construction and in Brussels where we equally we have a luxury hotel under construction.
So how do you pursue growth?
One way is that our company acts as an investor. So we have funds that the company generates or that the company is able to borrow and we use these funds after satisfying the needs of the company, including interests on any bonds and loans that we may have and also including dividends to the shareholders. Any surplus funds can be used for acquisitions as indeed we did recently in Brussels where we acquired a property off our own balance sheet.
A second way of growth is to act as a developer where we identify opportunities, create opportunities, and then go and seek investments from third parties to acquire the properties we would have organised for acquisition and development.
We are doing this on multiple fronts right now, including for example in Moscow where we have identified an opportunity. We negotiated the purchase of a building and then invited an investor to take part as the majority shareholder, the majority investor in this project.
The third way of growth is operating hotels for third parties and this is less capital intensive. It focuses entirely on our capability to operate and market hotels at the luxury level globally. This is the case for example in Bucharest where we are providing pre-opening and technical services to the developers of a landmark hotel there, to be followed by Corinthia management and branding of the hotel once works are completed.
So owners of hotels that are being developed in the luxury space, such as the one in Bucharest, and similarly in Dubai, where we are also acting as the operator, have appointed Corinthia to run their hotels. They had also initially appointed Corinthia to support in the design development, by giving the brief, advising the designers on what to design and to what extent to design. After that, Corinthia then stepped in as the operator.
We define luxury from the point of the view of the customer. Therefore to develop and operate hotels for which customers are willing to pay top prices but expect a top product and a top service. This does not mean that the product and the service have to be so expensive and as a result it renders this business unprofitable. On the contrary!
We should see this from the point of view of the customer, as I said, who is willing to pay the maximum prices as the market permits in whatever destination.
The essence of operating in the luxury segment is that one has to be truthful and sincere in the product that one is delivering without cutting corners by being clever in the design and in the development of the product. More importantly one has to be honest and genuine in the service and this would show through our people.
Services are ultimately given by our colleagues and we do have an entire human resources strategy revolving around this that rallies and motivates our colleagues from top to bottom from east to west around a unifying cause of the Corinthia sprit.
We have been doing a lot of work with specialist agencies and in-house colleagues to create an HR strategy that ultimately is all about uplifting the lives of people around us; both employees and customers. We are keen on making our employees around the globe feel that working in an environment created by Corinthia creates a better life for themselves and that will then rub off into the service we give to our customers. We want our costumers to feel that staying in our hotels is part of a process of enjoying the luxuries of life, for which they would be willing to pay.
So operating in the luxury market does create tremendous financial opportunities but comes with tremendous HR and development responsibilities. We are determined on getting things right, upfront, so that at the end we reap the rewards for the benefit of our own colleagues (employees) and our own shareholders.