Antonio Horrach: “We will close the year with a decrease of more than 50% compared to 2019” :: KPMG

-Everybody. On July 1, our twenty hotels were open; the three from Mexico, the four from the Dominican Republic and the thirteen from Mallorca.

– July was a difficult month due to restrictions in countries like Germany or England, on which we depend. In the Netherlands, tourist trips were no longer considered essential, and the Dutch stopped coming from one day to the next. In July, with rates between 20% and 30% lower, we made a 60% occupancy in the comparison with 2019. August was a little better and we reached occupancies close to 75% compared to two years ago. I don’t compare with last year because most of the hotels were closed.

-We are missing a lot. This year we will have a decrease of more than 50% of the EBITDA, of the operating result, compared to 2019, which is a pre-COVID year. It is the projection we make taking into account how we are doing today and what we expect for the remainder of the year. But, after the tremendous bump that we got in 2020, I am very happy.

“It would be unfair not to value ERTEs, ICOs, mortgage deficiencies and that the aid is already in the accounts”

-Effectively. We are comparing with 2019, which was worse than the previous two years because we were hit squarely by the bankruptcy of Thomas Cook. It was more than two million euros that they stopped paying us. We provide a service that we never charge for.

-Yes. This year there are hotels with a positive operating result, but when we take away the rent, the management, the financial costs (which are strong because ICOs had to be pulled) and the amortizations, imagine. In our case we own almost all the hotels, but a rent is paid to our holding company. In spite of everything, is it a success? _Yes, and that we are not recovering or the investments we have made.

-It is true that it has not compensated because national tourism, in a normal year, was residual, but it has quadrupled. It has been four times what it was. And then there is French tourism, which has been a surprise in our case. In France they have been very restrictive and the French have said: “we want to go somewhere, close to here”, and the French has gone up a lot. In our company it is right now the fourth or fifth nationality.

–The pandemic has put us very to the test. When not even a euro comes in because you have everything closed and you have to keep the workforce – in our case, about 1,500 employees – it is difficult to manage and you have to build a lot of equipment. It is very hard that you have a central that has to work to present results, even if they are zero sales. And those who are in the hotels, in ERTE one hundred percent, except for some maintenance services.

“Maybe we can open our new hotel in Palma on Easter 2022”

“It tasted terrible to me.” They knew it wasn’t my fault, but neither did they! It has been very hard. It has worn me down a lot, personally. I went to sleep every day thinking about people. When I say that the company and the people of the company are like my second family, it is true. They have had a bad time, and I felt very bad about it. But I have found that, in a litmus test like this, people have responded and that has moved me.

-To me. It is not hitting rock bottom only economically, it is hitting rock bottom as a person. You relativize in life. You wonder: “Y_is this make up for you, Toni?” The same is that, when everything was going well, it was not about working all day. You can also work a little less and recover other aspects of your life that you have left a little bit: family, friends. This is new for me. I have learned, personally and as an entrepreneur, that not everything is working. I like being with my daughter and now I do things that I did not do before, things that my daily activity did not allow me to do.

–We are still very far from the precovid figures, but I value the change in trend very positively. I am quite optimistic about next year. There is a thermometer that entrepreneurs have to talk to people and, although it is a personal forecast, I believe that 2022 will already be better than 2019. I am convinced. There is a lot of desire to travel and I think we have done things very well. When the covid passes and the market recovers, good products – which we have made a significant investment effort – have an advantage.

–It would seem very unfair not to value four things that have been done very well. If we didn’t say it, we would be missing the truth. First, the ERTE. I cannot think of a better model to deal with the problem. It is a very necessary model, which helps us a lot, and which has lasted over time. Second, ICO loans, which have been fundamental. Third, the mortgage deficiencies, which have allowed us who have loans to only pay interest and extend the amortization of the debt on an annual basis. It has been very important. And fourth, and perhaps the most important point of all, that the central government’s aid for covid has passed to the autonomous communities, and from the autonomous communities to the companies, and they are already in the current account. We have asked for the aid, it has been granted and we have it in record time. I have not seen anything like it in my life, nor will we ever see it again. That must be said.

-No. It also seems very unfair to me that when a hotel is closed, it has to pay for consumption that it does not have. I have hotels that have not consumed a cubic meter of water per month, and have paid minimum fees of 10,000 and 15,000 euros. It seems incredible to me. It has also happened with the garbage. If I don’t generate garbage, why do I pay garbage? It is a fixed fee that has made us lose a lot of money in closed hotels. I do not understand.

– It is true that it started late, but I do not know to what extent it is the responsibility of the Government because they came from Europe. I know that there have been conflicts and compensation with the vaccine companies, with brutal fines. We have hotels in different countries. In the Dominican Republic, for example, one of the first things they did was vaccinate our staff. They considered tourism workers as essential, and I think that it would have been good to prioritize it also in Spain considering hotel staff as essential. It was said that in summer 70% of the population would have been vaccinated and, although it seemed little to me because the tourist season was lost, the truth is that it has been fulfilled.

-Yes. I believe that the communities have accompanied. In the Balearic Islands, efforts have been requested and timely decisions have been made. Here it was considered that we live from tourism and that we depend a lot on the vacation months, and it was prioritized to be very restrictive until the summer season. And I think, frankly, they did very well. The Government of the islands asked for an effort, especially from the world of restaurants and hotels, and it was right. And in politics, making decisions like this has value because you put yourself in front of a lot of people. It was a tough but brave decision, and for me it was the best.

“The pandemic has taught me that not everything in life is work”

-Yes. A new hotel that still has no name and is still being built on Ramón y Cajal street. I think that at Easter next year we will be able to inaugurate it. It is licensed for 176 rooms and will eventually have 118. We have decided to make only one room out of every two rooms on many floors. This is unusual. It is a 4 star superior. The qualities are 5 stars, but we did not want to go to five for a commercial issue. There are companies that, by internal order, do not let their executives go to 5-star hotels, and that would leave us out.

–And this hotel is a sample of where we are going. In their rooms, for example, when the client leaves, they will be able to see on their bill the energy savings that their stay has meant with all the sustainability measures that we have put in place to reduce CO2, water consumption, consumption of energy, etc. On the roof we will install solar panels for self-consumption.

–With the pandemic, even the banks have told us: “Toni, this is not the time, is it?” But I think so. If the idea is that it is done by the time this is over, we have to do it now. Now there are a lot of difficulties in accessing financing from the tourism sector because we are, together with restaurants and nightlife, those who have suffered the most in a pandemic.

– I am aware of the terrible situation that we have gone through, but I also believe that now market opportunities will appear. And_we’re looking at things. I am very confident in the future. In fact, we’ve recently been looking at two hotels in Budapest where I see an opportunity. I do not know if in the end we will do it, but I would like to place a flag in Budapest, in Europe now.

–Our expansion involves continuing to grow where we are and where we feel comfortable, as in the Caribbean, in Mexico especially. But we are also looking at other things. In addition to Budapest, we are going to see things in Prague, in Central Europe, and also in the Red Sea, in Hurghada and Sharm el Sheik. We believe that opportunities must now appear. A sales manager of ours is now going to see a hotel in Mexico that I think may be interesting.

– Almost everything we own, but now, due to the circumstances, they should be projects more directed towards management and not so much ownership. We want to grow in hotel management carrying our brand, which has been consolidated. Today, two-thirds of the business is direct online sales. It was already a trend, but the covid has accelerated it.

In figures:

• 20 YEARS OF HISTORY
• 20 HOTELS
• 3.486 BEDROOMS
• 8.077 PLAZAS
• 100% SPANISH CAPITAL
• +1.500 EMPLOYEES

IN PERSONAL PASSWORD

No tie and no whatsapp

He inherited from his father the passion for being a soccer goalkeeper and, being very young, Antonio Horrach came to defend, under sticks, the colors of Mallorca, Baleares and Sóller. In the three teams he was the goalkeeper with the least thrashed in the third division. He is convinced that the experience of sacrificing himself, working as a team and training every day that football has given him has helped him “a lot” in his business life.

Despite the enormous difficulty experienced by the company in the pandemic, it is transparent in the conversation and reveals its most human side. Although it was not his fault, the damage that his workers suffered when closing the hotels caused him immense pain and made him rethink many things in life.

He is a self-made man, simple, talkative, personable and with empathy. He learned from his father values ​​such as humility and daily perseverance at work. He has ties at home, but he does not wear them, he does not like them, he does not feel good about them.

She enjoys her daughter whenever she can and believes that this crisis has taught her that not everything in life is work. When he’s out of the office, he prefers to disconnect. He does not have his work email on his mobile and he does not use WhatsApp.

He feels very comfortable in Mallorca and on weekends he loves to spend hours in the Bosch bar in Palma reading the printed press of all ideologies.

He likes football, but he is not from any team; in politics, something similar happens to him.