Malta-based Corinthia Hotels is known for luxury hotelkeeping around the world, but one thing it has not done is found a presence in the United States like many of its global luxury competitors – until now, that is. In perhaps one of its biggest deal announcements to date in May, Corinthia said it will open its first North American property, taking over management of New York City’s Surrey hotel, which was purchased by London’s Reuben Brothers last year.
This big splash of a deal marks Corinthia’s second deal with the Reuben Brothers, the global private investment firm founded by David and Simon Reuben. The pair is also working on a hotel Rome project.
Corinthia Hotels CEO Simon Naudi told HOTELS when the deal was completed, “We have global ambitions and the USA means so much to us in this regard. So many of our guests in Europe come from America, which means we’re so proud to have this opportunity to bring our family-inspired style of operations into New York.”
The Surrey, a Corinthia Hotel, will undergo an extensive transformation and is slated to reopen in early 2023. Martin Brudnizki will oversee the design of the 97 guest rooms – including 33 suites and five signature suites – and 12 luxury residences. Casa Tua, known for its restaurant, hotel and private club on Miami Beach, will handle the hotel’s food and beverage offering.
Corinthia, which both owns and operates, was founded in 1962 by the Pisani family, with Alfred Pisani serving as chairman. Its portfolio includes hotels in cities such as London, Budapest, Lisbon and St. Petersburg. Current developments underway in various stages of design and construction include trophy hotels in Rome, Brussels, Bucharest, Moscow, Dubai and Doha.
In wake of this news, HOTELS recently spoke to Naudi, CEO of International Hotels Investments, the owner, developer and operator of Corinthia Hotels and other real estate globally, to learn more about Corinthia’s big moment and plans moving forward, as well as ongoing performance as the industry tries to put the pandemic in its rearview mirror.
The acquisition, development and launch of the Corinthia Hotel & Residences in London counts among his more notable achievements. In recent years, he has expanded the company’s footprint into other major European capitals, as well as the Middle East and now the United States.
“Already, we are now evaluating several options across the country, including in cities such as Miami, Chicago and San Francisco. We are, in fact, establishing our own development team in New York specifically to target new opportunities across the USA.” – Simon Naudi
HOTELS: Talk about the Surrey deal. How did the deal come together and what got it across the finish line? Is Corinthia investing or is it strict management?
Simon Naudi: We have been working with the Reuben Brothers for a couple of years now. We first joined forces in Rome, where we are acting as development managers and, eventually, lessees of the Corinthia Hotel under development on the site of the old Bank of Italy headquarters, which they acquired.
Given the great relationship that has evolved on the Rome project at all levels, it was much appreciated when they called us up to discuss the Surrey Hotel as soon as they acquired the property in Manhattan. Here, we are committing funds in support of our role as operators. From our end, not only are we consolidating an excellent relationship with the Reuben Brothers, but we are also stepping into a global gateway city with a great hotel, from where we plan to grow across the United States.
H: What is the importance of getting into New York City and how soon before you announce more deals in the United States?
SN: Getting into all major markets across the globe has been a lifelong focus for our company’s founder Alfred Pisani, who built the company from very humble origins in the ‘60s on the island of Malta. We are thus so proud to have stepped into the U.S. Already, we are now evaluating several options across the country, including in cities such as Miami, Chicago and San Francisco. We are, in fact, establishing our own development team in New York specifically to target new opportunities across the USA.
H: Where else are you looking to grow right now and, again, strictly via management or will you also acquire outright?
SN: We seek opportunities globally, not only as operators, but equally as developers and investors in hotels and real estate. Given our versatile and entrepreneurial approach, we can discuss any form of involvement on whichever project, provided only that the project includes a hotel that can carry our name and must therefore be pitched in a great location and built to our luxury standards. Once that is ascertained, we then explore how best to get involved, either as operators or developers, or even as investors, whether with partners or 100% on our own steam. This approach means we can broaden our scope and energies.
H: With all the capital chasing limited deals, are you finding it particularly difficult or even surprisingly challenging to source deals? Does that make management the way forward?
SN: Quite the contrary, but then again, this is more so because Corinthia’s profile is fast growing. More and more opportunities are coming our way, from as far afield as Australia and China, all the way to Africa and some of the more exciting destinations globally.
Suite at the Corinthia in Moscow
H: Where would you like to grow, and why?
SN: Simply put: everywhere where a luxury hotel can operate successfully, not only financially, but equally from the point of view of having or potentially having a strong demand from discerning customers.
H: Will all deals be for luxury Corinthia, or might you create something more accessible – even another brand?
SN: Our focus as a brand is clearly Corinthia, and its positioning at the top end of the market. We do, however, own some mid-market upscale hotels which we operate using third-party brand franchises. At some point, we may consider launching our own brand, positioned lower than Corinthia, although that may be a few years down the road.
H: It has been a tough 18 months for performance. How is the company holding up financially? Are any properties in danger of foreclosing? Have you been able to successfully refinance debt?
SN: We were fortunate to enter the pandemic with a strong balance sheet, healthy cash reserves and above all, an abundance of goodwill built over many, many years with our own colleagues, banks and shareholders. Everyone chipped in. Our staff agreed to salary deferrals; the more senior, the higher the deferral. Our banks have supported us on payment deferrals. Governments have stepped in with subsidies on salaries and other rates, as well as subsidized bridge loans where necessary. As a result, we remain in a healthy position, with relatively the same level of conservative debt as we had pre-pandemic, and none of our hotels are in any immediate danger in the sense you asked.
H: Talk about the portfolio performance and how it is trending at the moment. What are your expectations looking forward? What are you forecasting for the rest of 2021 and into 2022? Are you determined to hold rate versus driving occupancy?
SN: We had all hoped for an earlier recovery, but we do see light at the end of the tunnel. Wherever restrictions are relaxed, we see demand rushing in. Our hotels in large, domestic markets, such as London and St Petersburg, are in fact trading at very healthy numbers considering where we were just a few months ago. Our larger hotels in Lisbon, Budapest and Prague will have to wait longer, especially in the MICE segment. But we’re pinning all our hopes on a 2022 comeback and a return to healthy numbers by 2023.
H: How are you specifically going to market differently to drive business again? Special promotions, new product offerings (family suites, work from hotel deals, outdoor activities, etc.)?
SN: I very much suspect much of the immediate focus on issues such as “work from home” will gradually recede into the background, and normality in the sense of how we knew this will return. There will, of course, be more online meetings, more flexible working hours and the like, but these trends were already ongoing, simply accelerated by the pandemic. On the other hand, demand for hotel accommodation, whether on vacation or business or other, will grow and grow and grow. The one thing the pandemic has shown us for sure is that humans crave contact and interaction. This is good for our industry.