International Hotel Investments (IHI) has continued to reduce its income dependence on any specific subsidiary business in any country where it owns hotel and property assets.
In an business and strategic update on the Malta Stock Exchange, IHI said that while, in 2009, 66 per cent of the contribution to profit was generated just by the Corinthia Hotel Tripoli and its adjoining commercial centre, by 2014 IHI had migrated to a model where not one of its businesses contributed more than 17 per cent of its EBITDA.
The company’s 50 per cent share in the Corinthia Hotel London registered the largest contribution to profits, underlining the company’s resolve to balance its income streams by adding stable investment jurisdictions to its portfolio.
IHI chairman Mr Alfred Pisani said that IHI’s geographic diversity of its income and future expectations were not casual.
“They are the consequence of a deliberate spread of our capital between stable and emerging economies, and more so, the result of investment and effort in our hotel operating capabilities in CHI Ltd, our 100 per cent owned hotel management subsidiary.”
The company also registered an improvement in its consolidated forecast EBITDA for 2014 when compared to 2009 - €33.8m in 2014 versus €33.3m in 2009 – and this notwithstanding the revenue slide registered in the Tripoli Hotel and the further negative impact of the devaluation of the ruble on the company’s euro results in St Petersburg.
Challenges faced throughout 2014 in specific jurisdictions, notably Libya and Russia, were mitigated by record results in other Corinthia hotels in Malta, Budapest, Lisbon and London and markedly improving profits in the Prague hotel.
IHI is expecting its hotels in Malta, London, Lisbon, Prague and Budapest to register further improvements in 2015.
In Libya, the company will continue to be vigilant on its business in Tripoli with the aim of breaking even in the hotel operation and to maintain the steady flow of annual income from renting its adjoining commercial centre to oil and gas blue chip tenants.
In St Petersburg, IHI has put a new management team in place to execute a strategic refocus of its business. The company aims to generate as much business as possible from within Russia itself and to operate the hotel with a wide range of room rates targeting upscale corporate to luxury travellers.
A level of success in this strategic refocus has already been registered this year, with 35 per cent of the St Petersburg Hotel revenue generated from within Russia as compared to 25 per cent in 2013.