“It’s hard to think that war favors us” – Observer

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For the first time in two years, “there is good news to share”. The observation is from José Theotónio, CEO of the Pestana group, who after presenting last year the worst results in the 50 years of the group’s history – losses of 32 million euros – revealed this Wednesday a return to profits of the 2021 financial year. It was 23 million euros. “It’s not a very positive result for those with investments over a billion euros, but it’s positive under the circumstances.”

Circumstances dictated that in 2020 and 2021 the group would be forced to close nearly all hotels due to the pandemic. “Each year seemed like a century”, illustrates Theotónio. Even so, 2021 has already brought some recovery from the previous year. EBITDA almost tripled, to 96.2 million euros, even though it represented 60% of the 2019 figure. Revenues increased by 62% to 295 million euros, also still far from the 418 million of the last year pre-pandemic, the best ever for the group. Revenues from the hotel business doubled to 139 million euros, and regained the weight they had lost the previous year in favor of real estate, which in 2020 was the group’s “lifeline”, acknowledged the CEO. Achieving positive EBITDA in the hospitality industry was the goal for the year, and it was achieved.

“2021 started at the end of May. In June we had a boom in English bookings’, as Portugal was briefly on the UK’s ‘green list’ which did not require quarantine on the way home, but the situation is improving. is quickly reversed. Despite everything, between July and October, the group found “a little breath”, which would be lost again in November, with the new wave of cases.

Despite the difficulties, the group maintained last year the construction of the nine hotels it had started in 2020. It even opened the hundredth hotel of the Pestana brand in February 2020, to keep it open for 39 days. “We were in no rush to open because there was no market. But we haven’t given up on any of them.” Today, they are all open, after an investment of 124 million euros. Lisbon won one and Porto two. He also opened the Vila Real de Santo António hostel and the fisherman, in Madeira. Outside, a unit was opened in Tangier, Morocco, and the Pestana CR7 in Madrid, New York and Marrakech, the “most competitive city in Africa” ​​in the hotel industry, for José Theotónio. “Our big challenge in 2022 will be to put these hotels on the map,” he said. “Because everyone here knows the CR7 brand”, and abroad it’s not quite that.


The next pipeline projects to be added to the list are in Lisbon, Rua Augusta and Alfama, but are not expected to open until 2023. There are still two projects pending approval, in Madeira and Porto Santo. Abroad, the group also plans to open a hotel in Newark, USA, but the investment in this unit will come from the Seabra family, owners of the Seabra group, which operates in the food and drinks. There is still a CR7 in Paris in the pipeline, “but it will take time”.

But the “good news” of which the CEO of Pestana speaks came more strongly in 2022. In April, the group managed to exceed the revenues obtained in the same month of 2019. What has also just happened, recalls Theotónio, because now there are more hotels. Still, expectations are high for the year whose high season is about to begin. The objective is to reach the end of 2022 with the same income as in 2019, that is to say the best year ever. “We cannot forget that there is a war in Europe and a Covid which was killed by this war but which is still there. There are still clouds, but our expectations, based on the reserves we have, are positive,” he reveals. “For the past two years, we have been doing a PhD in uncertainty management.”

Asked about the greatest uncertainty of the moment, the impact of the war on the functioning of the group, namely the fact that Portugal is a “net beneficiary” of the conflict, as affirmed by the President of the Republic, José Theotónio, is not so outspoken. “It is difficult for us to think that the war favors us or that it will be a factor of growth. It can benefit us in the short term, but if there is a loss of confidence in consumption, confidence is shaken, ”he summarizes. In addition, there is the impact on rising costs. Pestana expects a ‘substantial’ increase in energy costs from June of around 70% as it will have to renegotiate the three-year contract it had so far, with a price fixed.

There are also difficulties in eating and drinking. The group suffered from supply shortages in products like vegetable oil, one of the hardest hit by the invasion of Ukraine. “Vendors don’t want to guarantee fixed-term prices,” he points out.

Concerning the prices themselves, José Theotónio affirms that the difference lies in the reservations made “at the last minute”, for which “it is possible to adjust the price according to the demand, and when the demand is strong, the price may increase”, he says, without giving average values.

Another difficulty lies in hiring the workforce. The group even closed the hostel in Estremoz, in the Alentejo, until the beginning of this year “because we couldn’t find people to work”, explains the manager. “There is a risk of having hotels closed for lack of manpower,” he reveals. For this summer, the group estimates that it needs around a thousand people, of whom 480 are hired, “practically all Portuguese”, he says, “because what was said, that there would be a facilitation at the Hiring in countries like PALOP, has not arrived on the ground”, he criticizes. The group currently has four thousand people, 90% of them in Portugal.

Workers needed. Restaurants and hotels are no different, young people are no longer the same

Off the plans is the sale of more assets in the portfolio. It was after this week that the sale of the Pestana Blue Alvor to the Spanish Azora was announced, for a value that is not yet known, but which, according to José Theotónio, was high. “Someone showed up who paid the release clause. It was a higher value than we expected, that’s why it was sold.” But it was a one-time deal, he assures. Until November, the unit will be managed by Pestana. After that, you’ll see. “They’re looking for a partner. Let’s see if they can find someone better than us.

In the real estate segment, which saved the group’s accounts last year, the objective is “not to regress”. Last year, the sale of real estate represented around 40% of the group’s results, but in a year 2022 which should return to normal, it should be around 20% to 30%. After the “success” of Tróia, the group has under construction the Comporta and Brejos de Azeitão projects, which are already “completely sold”. For sale is a project in Porto Covo, two in Madeira and two in the Algarve.

José Theotónio also revealed that the group has applied for the mobilizing agendas of the Recovery and Resilience Plan (PRR) with four projects, worth 24 million euros. Two are in the context of digital transformation and network improvement. Wireless of the group, valued at four million euros. The most important, which total 20 million, relate to the installation of electric chargers and the switchover of the group’s energy sources to cleaner sources, such as solar panels.

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