It was during lunch with the press, as part of the commemorations of the 50th anniversary of Grupo Pestana, that Dionísio Pestana, president of the group, admitted that, if he had not accepted his father’s challenge, in 1976, “he would have been in banking in Africa southern. Luckily, that didn’t happen.”
It was on November 20, 1972 that the largest Portuguese hotel group was born, with the opening of what is now the Pestana Carlton Madeira. But the group’s history begins in 1966 and with a price of 18,000 contos (today, 90,000 euros) paid for a plot of land in Funchal where what is now the Pestana Carlton Madeira, inaugurated 50 years ago, would be built.
But it was after his father “considered the hotel business lost”, as Dionísio Pestana mentioned, that the trip from South Africa to Madeira takes place, where, initially, the will of the now president of the group was to be “a diplomat, already who loved to travel”.
“The revolution had completely destroyed the project and when I arrived I realized that this was not a problem, it was a big problem”, recognizes Dionísio Pestana to reveal that, “with time I started to believe that it was possible to fulfill my father’s dream and I was feeding also my own dream”.
Now that dream is today the largest hotel group, with 108 hotels spread across 16 countries, and an expected turnover of 500 million euros for 2022 – 80% in Portugal and 20% abroad – and whose main markets are the British, German and in the “pleasant surprise” that the American became. Moreover, Dionísio Pestana believes that the bet should be made in markets that are two to three hours away or in the United States, since it is a market that “pays more and has greater purchasing power”.
Going back in time, however, it is with “time-sharing” in the 1980s, that the “turning-point” of the Pestana group takes place. Imported from the USA, people had the possibility of buying a week’s vacation for 30 years – today it’s only for 10 years –, with the first sale being made to the British market. “Today we still have families who bought at that time and who stayed with us for 30 years and renewed for another ten and ten more”. And it was precisely this treasury that made it possible to carry out the financial part and build the group.
Finish what’s running and slow down on new projects
As for the future, Dionísio Pestana considers that “the biggest concerns are inflation and interest rates”. With regard to the first, “we’ve already been through this and the secret lies in increasing productivity, having imagination in the area of teams, maintaining revenue and defending margins”, said the president of Pestana.
As for interest rates, “we must always keep an eye on the treasury and on new projects that are frozen”, stressing Dionísio Pestana that, “what is in execution is to be finished, what is new, we will wait”. And what is being executed are two hotels in Lisbon – Alfama and Rua Augusta –, to be inaugurated during the 1st half of 2023, when the other project will start, in Paris, next to Gare d’Austerlitz, an investment of 60 million euros, in which the group stayed with the hotel part, with 210 rooms, in a project of 100,000 m2 of construction.
Outside is the possibility of selling any asset, a situation that happened with the Pestana Blue Alvor, acquired by Azora through the Azora European Hotel & Lodging fund.
“The funds came to revolutionize the hotel real estate business a lot, a business that used to belong to the banks”, considers Dionísio Pestana, also admitting that every month the group has approaches from funds for the purchase of Pestana assets. With José Theotónio at the chairman’s side, it was the CEO of the Pestana group who best characterized the sale of that asset: “it was a deal in which the termination clause was broken”, he said, with Dionísio Pestana stressing that “the business was running well”. However, the revelation remains that, “if it is not strategic”, the sale will be “always considered”.
With one of the problems residing in the increase in costs – +10%, in general, and 25% in energy – the chairman of the Pestana group revealed that staff costs had also increased. In this regard, and with other concerns – inflation and interest rates “resolved” – in the case of human capital, Dionísio Pestana points out that “the structure is professionalized and prepared for the future. We cannot be afraid, we have to be prepared and we have capable people to do it”.
However, he admits that “there is no manpower in Portugal and, therefore, we have to look elsewhere”, giving Switzerland as an example: “if we go to Switzerland, it is not the Swiss who work in the hotel industry”. And he gave an example of the flexibility and adaptability that one must have, without jeopardizing the business and the operation: “we have employees whose requirement is to come in at 3 pm. Because? Because they want to have the morning to go surfing. But then they don’t mind working the rest of the day and at the weekend”.
“What we can’t have are people who don’t want to work on weekends, since the hotel industry is a business that works 365 days a year, 24 hours a day. We will always have to have rotating shifts, always staff available, but of course we can always have some adaptability”, said Dionísio Pestana, not expanding much in comments about the proposal of four days of work, “an impossible reality to consider for the hotel industry”.
Recognizing that there is some difficulty in “importing” personnel, the solution indicated is in the Community of Portuguese Language Countries (CPLP), “countries that know our language”, warning, however, that “visas are needed” and that, in this speed is needed in this matter so as not to continue debating the lack of personnel.
What is certain is that for the next year, 2023, the Pestana group is already prepared to start the hiring and training process, all because “next summer will be good”, admitted Dionísio Pestana.
*Publituris/Publituris Hotelaria traveled to Funchal at the invitation of the Pestana group as part of the 50th anniversary celebrations.