For Alfred Pisani, the indefatigable chairman of the Corinthia Group, all roads lead to London, Paris, Rome and beyond, as far afield as New York, possibly even further. He speaks about his plans to The Times Business.
The hotel the group has just opened in London is described by Mr Pisani as the gem in the Corinthia collection. He considers it more than just another luxury hotel; it is a trophy hotel.
“It has a tremendous location. We have the largest bedrooms in the five-star category in London, it will possibly have the largest suites the world over and the spa will be unique,” he proudly proclaims. “It’s a trophy hotel located in a trophy capital… Here we have something beautiful and in a world capital. This will give us exposure among the high-end client, be it corporate, leisure or whatever. This will have a spin-off effect on all our other Corinthia hotels.”
It is, of course, an upmarket hotel. The marketing campaign includes adverts in top quality magazines and via personal contacts in Moscow, the Gulf states, India, South America and through “the right connections”.
Corinthia is aiming high in London. The service on offer proves it, as does the price structure. The Corinthia London is being sold at a level Mr Pisani insists will be different to the normal five-star hotels. “We consider ourselves to be a six star property.”
The property does not come cheap. Corinthia bought the freehold of two sites, 10 and 11 Whitehall Place, for £135 million, including a four per cent property tax. Just under 300 keys were developed although the hotel will have more than 300 bedrooms because of the 38 suites within the hotel and the adjacent 12 apartments. The total cost to complete the 42,000 square metres of luxury living amounted to a further £170 million, for a total of about £300 million.
The main contractor moved on site on April 15, 2009 and pencilled in October 10, 2010 – 10-10-10 – as the opening date. It was more of a gimmick on his part, Mr Pisani is quick to note, adding he personally was sure that would never happen because this was a huge development that required a lot of work. “There was no way, by any stretch of the imagination, that date could be met because there was a physical limitation as to how many people can be working on site simultaneously. At times, we had 1,300 to 1,500 people working there. Yet, it was good to have a date and when we were six months away from October 2010 we said: Let’s be a bit more realistic. When will the contractor be able to complete the work? And we then went for April 2011… exactly two years since the beginning of the works, which is terrific speed.”
There was indeed a lot of work to be done. Apart from the 300 rooms, there are the 38 suites of between 80 and 120 square metres. On the seventh floor are seven duplexes of 380 to 450 square metres each, with their own lifts.
The hotel has a fish speciality restaurant called Massimo’s, the décor of which was done by David Collins, the Northall restaurant and the Destination bar, to mention just three of the many amenities.
“But the jewel in the crown will, in my opinion, be the spa,” Mr Pisani notes. Operated by Espa, it covers an area of 3,500 square metres, with 17 treatment rooms. “Espa are looking at this operation as their premier spa among their 155 worldwide.”
Lady patrons wanting to do their hair will find Daniel Galvin at their service, a top hairdresser in London.
A top hotel will, of course, settle for no less than a top shopping experience and the Corinthia went for the very top in London: Harrods. A Harrods shop will be supported by a concierge service, meaning that any guest wanting to buy from Harrods will be accompanied by a hotel employee who will take him/her to the right spot at Harrods depending on their particular requirements.
“It is all part and parcel of the very exclusive attention we will be giving our guests,” Mr Pisani says, adding Corinthia also intends to have a butler assigned to the large suites, staying with the guests throughout the whole duration of the stay.
He notes: “I would like to think that in a very, very short time, we being who we are, as a property will lead the London market at that six-star level... One can only really appreciate what the property is all about once people get to know about us either through our marketing campaign or because they happen to be in London and they go our way and discover us.”
The 12 apartments that form part of the hotel area evidently play a leading role in the group’s plans beyond the British capital. Mr Pisani explains why he considers these to have “tremendous value”.
“When you take the value of the apartments and the value of the hotel and bear in mind that no hotel in London or Paris sells for less than £2 million a key, you will realise the total value of this development is more than twice what it cost us to buy and develop the property.”
He weighs the revenue Corinthia could get if it rents the apartments against the benefit of selling them and concludes that, in the circumstances, a sale would be a better proposition.
Mr Pisani thinks aloud: “If I had to make a choice and say: Look, there is a property going in Paris and we need to support our cash flow, I think from the Corinthia point of view and the exposure of the brand I would rather have my flag flying in Paris and lose the apartments because each time we fly the flag in a town like London, Paris, or New York the brand is really strengthened and then all your properties get a boost as a result of such exposure.”
He expounds: “We have for a long time been looking simultaneously at these other top capitals: New York, Paris, Rome etc. We would like our flag to be flying in such capitals but you are not likely to find at this stage of our growth some large investor with a big property who would come to the Corinthia and say: Operate it for me. And, then, I cannot fly our flag on a four star property because that does not fit. So we would have to build that hotel ourselves. We, as a public company IHI, have to buy the property and then pass the management on to Corinthia. “Each development costs you a minimum of £300 million. So we need to increase our capital. We have been planning to do this since three years ago. Unfortunately, when we were just about to launch our IPO, or second listing in London, in July-August 2008, the world economy slammed and we had to hold back. Now that it is picking up, our brokers, our bankers are telling us: Wait for the end of this year by which time you would have established the operation of your London hotel and this will give you added value when you come to launch the IPO.”
Mr Pisani would only go as far as saying that the group has been looking “at two or three properties in Paris” and that it has also been eyeing Rome. “We are having negotiations. Of course, all this is very much tied up with the IPO.”
He acknowledges that things have been tough since July-August 2008, when the economic crisis hit and business “was really difficult”.
He singled out the performance of Bab Africa Hotel, the luxury property Corinthia owns in Tripoli. A dispute between Libya and Shengen countries about visas badly affected the hotel for about three months last year. “Unfortunately, we are now faced with the sad happenings in Libya, meaning that our hotel in Tripoli, which was our top earner, is at the moment just ticking over. This obviously affects the operation.
“Because we are also real estate owners of our properties, I’d like to believe that this impasse would be shorter rather than longer but we cannot make miracles. This is a reality and the prevailing situation must therefore take its time before things get back to normal.
“The situation in Libya, of course, means our property in Tripoli is not having an easy time. It is still open and hosting journalists and even clients from Africa. But occupancy is only between 20-27 per cent,” Mr Pisani reports.
But not all is that bad. In fact, Mr Pisani says all the group’s other properties are showing improved performance. “Business has started to recoup. We were hoping this would be a special year after two difficult years but this (Libya crisis) had to happen. I’d like to believe that when it’s over, Libya will see a turnaround, which would be primarily for the benefit of the people and the country will keep going forward.”
Mr Pisani is evidently determined to keep the Corinthia flag flying.