Rocco Forte Hotels’ Russian outpost pays out bumper dividend
The ring-fenced Russian arm of Rocco Forte Hotels has paid its shareholders a dividend worth more than £3m, despite the luxury hospitality chain being accused of bankrolling Putin’s war machine in Ukraine by maintaining operations in Russia.
Astoria Hotel Joint Stock Company – the holding group for Rocco Forte Hotels’ Russian portfolio – distributed £3.2m to investors in the 12 months to May, an increase of more than 66 per cent on the previous year, according to fresh filings.
Post-tax profit at Astoria, which controls five-star hotels in St Petersburg, jumped more than 14 per cent to £7.9m even as economists warn that Russia’s economy is at breaking point under the weight of its costly offensive in Ukraine.
Rocco Forte Hotels put its St Petersburg properties – Astoria and the neighbouring Angleterre Hotel – into a shell company which it says is ring-fenced from other parts of the sprawling portfolio. The separation means that while the group still owns a majority stake in Astoria Hotel Joint Stock Company, it does not stand to benefit financially from its Russian operations for as long as the war and sanctions continue.
Sir Rocco Forte’s eponymous hotel group is one of the UK’s most successful high-end hospitality empires, boasting the likes of Edinburgh’s Balmoral and the oldest luxury hotel in London, Brown’s. But as well as locations in Milan, Brussels and Sicily, it has also maintained a footprint in Russia, setting it apart from the majority of western firms.
The overwhelming majority of British multinationals chose to sever ties with the pariah state after its 2022 invasion of Ukraine, fearful of a reputational backlash or being swept up in the influx of governments’ economic sanctions on Moscow. Others, including the likes of Astrazeneca, Pepsico and L’Oreal have kept roots in Russia, with the former arguing that millions of patients in the autocracy rely on its medicines.
Rocco Forte Hotels keeps Russian division at arms-length
“In response to the evolving political situation in Russia, the group has introduced additional policies and procedures to manage the associated risks and to ensure compliance with international sanctions,” the firm said in its report. “The directors continue to monitor the introduction of international sanctions and will respond accordingly.”
Elsewhere in the filings, the group’s directors identified falling foul of sanctions as one of three areas where the non-conformity would have a “material effect” on its financial statement – including through the imposition of heavy fines and litigation.
Forte offloaded 49 per cent of his hotel chain to Saudi Arabia’s sovereign wealth fund in 2023, in a transaction that valued his empire at roughly £1.4bn and allowed him to keep overall control of the empire. The group maintains it has never fallen foul of formal legissation to hamper Russia’s war effort, but its decision to maintain its Russian footprint has been criticised by pro-Ukraine campaigners.
B4Ukraine, an international coalition of over 100 civil society organisations and think tanks, has branded it a “shameful example of greed triumphing over morality”.
“By staying, Rocco Forte Hotels indirectly helps bankroll Putin’s slaughter, paying into the same treasury that funds the missiles and bombs that have razed Ukrainian cities and unleashed the biggest refugee crisis in Europe since WW2,” it said.
Rocco Forte Hotels only owns 60 per cent of the Astoria holding group, according to the report. It is not known which individuals or firms make up the remaining minority stake.