Minor Hotels unveils plans to expand amid tourism boom
Minor Hotels plans to grow its portfolio to 600 properties in 59 countries with more than 91,000 rooms this year, driven by an optimistic outlook for the global tourism industry after Covid-19 infections eased.
Dillip Rajakarier, group chief executive of Minor International Plc and chief executive of Minor Hotels, said that as pent-up demand should drive the industry for years, the company can expand via its “Asset Right” strategy that seeks to balance investments or leased projects and management contracts.
The company operates more than 530 hotels featuring 78,226 rooms in 56 countries under eight brands.
Out of 65 new hotels in the pipeline, 58 of them will be under management contract.
Mr Rajakarier said owned and leased hotels have contributed to the largest portion of earnings and profits compared to hotels under management contracts.
The new locations for Minor hotels comprise Egypt, Peru and Bahrain under management contracts.
Mr Rajakarier said that when entering a new market, it was more appropriate to start with a management contract before investment.
In Thailand, two hotels under management are the Anantara Koh Yao Yai and the NH Collection Chiang Mai Ping River.
A total of 30 new hotels will be seen in China through a joint venture investment with Funyard Hotels & Resorts, which will increase the overall number on the mainland to 38 by 2025, said Mr Rajakarier.
He said there was an opportunity to introduce a new brand such as NH Hotels to China. The ultimate goal for China is to have 100 hotels within the next five years.
Minor Hotels has also signed a memorandum of understanding with Saudi Arabia’s Tourism Development Fund as a key strategic partner to boost new investments, such as the Anantara Diriyah Gate hotel.
The company signed a joint venture with the Abu Dhabi Fund for Development for more than US$100 million last year, including NH Collections Maldives.
Another long-term growth strategy for Minor is to keep driving the average daily rate (ADR) and revenue per available room (RevPar), amid a stable occupancy rate.
For instance, the Anantara Convento di Amalfi Grand Hotel in Italy posted an almost triple-digit room rate growth in the high season after rebranding this year.
This strategy will also deal with higher costs stemming from inflation, costs of living and labour costs.
During the first quarter of this year, the ADR of Minor Hotels was 24% higher, with RevPar 12% higher than the 2019 level among its owned and leased properties.
In Thailand, ADR exceeded 2019 levels by 14% in the first quarter of this year, while RevPar was almost at the same level.
With markets like Saudi Arabia, India, Russia and China ramping up, RevPar is expected to beat the 2019 level soon.