Facing challenges with confidence and determination. Simon Naudi 

 

Recently, International Hotel Investments p.l.c. (IHI), announced two key appointments with the promotion of Simon Naudi to Group CEO and Managing Director and Simon P. Casson succeeding him as CEO of the Group’s operating arm, Corinthia Hotels Ltd (CHL). 

Simon Naudi

Insider Plus met Simon Naudi, who answered our questions in his typically clear, incisive, and analytical manner. We asked him to share some details, aims and purposes of these appointments.

These appointments send a positive message and reflect an evolution of the company. We are growing on many levels: geographically, financially, and in human resources. We have reached a stage where certain top-level tasks need better tuning. To date, I have concentrated on operations, development and corporate aspects. As of now, we have an excellent new Corinthian, Simon Casson, who is taking on the role of CEO of Corinthia Hotels Limited (CHL), the operating arm of the Group and therefore responsible for all our hotels, growing and developing the brand, and running the hotels that we own or operate on behalf of third parties. Simon Casson, who has a distinguished career, will significantly assist us in a delicate and meaningful phase of Corinthias development. 

From my end, besides overseeing all Corinthias companies, ensuring Simon has all the right resources and providing the right direction in this regard, my job now will be related more to the corporate needs of the Group, fund raising, capital raising, strategic direction of the Group, growth, and all matters that come with the responsibility of owning properties and companies and the fact that we are a public company and hence subject to particular regulations.

We referred Simon Naudi to a statement he had made in 2022 that Corinthia’s portfolio vision to build Corinthia worldwide was not a mere wish but an embedded business plan. Was this plan still ongoing? Good management leads to growth, but at the same time, growth presents a challenge to good management. Will Corinthia experience this? 

The determination to grow is still there, even more vibrant. We aim to develop and grow from all angles. We want CHL to grow more as an operator, QP to engage in more projects, internationally, and CDI to expand further globally as a developer of properties. We also aim at our own growth as IHI, both collectively through the said three companies and in our own right as an investor and owners of hotels and properties.

The challenge now is to ensure concurrent development also as a team. Our immediate task is to ensure we are all synchronized on the same script and playing the same score. For this purpose, we will be formulating a Development Board where everyone is kept well informed of the goings-on in a timely manner. Everyone would be expected to be aware of their responsibilities and duties and to focus on their part of the joint equation.  

This drive should also enjoy robust connectivity where each entity would see how to attract, introduce and onboard other sister entities in new projects—a sort of cross-fertilisation rather than independence or competition. So, yes, the growth ambition is very much alive and kicking. As a result of growth, what is needed now is a better organizational structure on how to deliver this.”

Will growth come through ploughing new capital by existing shareholders, introducing new partners, or hotel management and development? Or a mixture of all? How would the phantom of an increase in costs, inherent in growth, be curtailed?

We are speaking to investors and partners to come and join us in individual projects or even in the main company as partners.

The invitation has two embedded attractions:

First, the invitation is to join a company with solid values, sound credibility, and an untainted track record of 60 years of business where it has never taken advantage of any partner. These are crucial considerations for potential investors to keep in mind.

Secondly, there is a timing value. One would be joining at a time when the company is about to catapult onto another platform. By the end of 2025, our Group will be a very different group. The Corinthia brand will be more and more focused on the luxury sector. We have other hotels which would attract different solutions to be in place by then. So, anybody joining our Group now would be joining at a significant and strategic time. One may call it a pre-birth of another phase of the Group. This would affect valuation positively. If you invest in something at its start, you can expect an increase in value as its growth materializes. We also have a responsibility to our existing shareholders, who have been in the company for some 60 years, to respect our legacy, stay true to our values and deliver returns.

Growth also has its particular challenges of personnel costs. We need to be slimmer in our operations and do not need to add huge Head Office costs as we add more hotels to our portfolio. The same team can manage more hotels.

Is Corinthia suffering from Long COVID? Medically, Long COVID is a wide range of new, returning, or ongoing health problems that people experience after being infected with the virus that causes COVID-19. What probable management medication would the ‘new team’ – collectively or severally – prescribe?

Though the tough times of absence of human contact and closure of premises far and wide have ended, the financial consequences of those COVID years are still knocking on our doors and hurting our purses. The year 2023 has carried, and to a degree 2024 still carries, consequences of Covid. Additionally, ongoing regional conflicts have given rise to certain serious problems. Energy costs have remained very high in many jurisdictions. Interest costs have stayed on the high end of the spectrum. Whilst there is no pandemic as before, the consequences of these two factors are very real and dramatic. And Corinthia, like all the rest, is not immune. 

In our case, it is compounded by the fact that in 2024, we are investing several millions of euros in opening hotels, such as Brussels and Rome. Also, CHL has increased its payroll for new and exceptional talent, which will eventually prove very beneficial. So, I would say 2024 is a challenging year, with high operating and investment costs. The benefit of these investments will not result immediately but will start leaving their mark sooner than we think.

We are at the tough end at this stage. However, the journey is clear. The forecasts we have today are very encouraging for the years following 2025.

Additionally, you must keep in mind that when we open in high-visibility cities, such as Rome, New York, or Brussels, the likelihood is that more deals will come our way because we will be operating successfully in more visible locations.

These are the challenges we must surmount. We face them with great confidence and determination.