Minor budgets Bt20 bn for hotels, restaurants

The investment funds will come from its cash flow and borrowing from financial institutions. The company also has a reserve fund of Bt10 billion to Bt10.2 billion. However, it has no plan to increase its capital.

More than half of MINT’s five-year expansion budget will go into hotels. It will look for business opportunities in overseas locations where it has a foothold, including Africa, the Middle East, Indochina and other parts of Asia, Australia, and New Zealand, as part of its plan to reduce risk in the domestic market, said Chaiyapat Paitoon, MINT’s vice president of strategic planning.

In 2011, its overseas sales made up 25 per cent of total revenue, up from 16 per cent in 2010. By 2016, it is expected to increase to 40 per cent.

Last year, the group’s total sales were Bt28 billion, with net profit of Bt2.88 billion.

Currently, its food and hotel businesses each contribute 45 per cent to the group’s total sales. This ratio will be maintained over the next five years.

During the period, net profit is expected to rise by 15-20 per cent annually. Earnings before interest, taxes, depreciation and amortisation are to rise every year. In 2011, EBITDA was Bt6 billion. At worst, growth this year will be flat, he said.

To reach its goal, one of the key strategies is a takeover plan. Last year, MINT bought the rights to manage the Oaks four-star hotel chain, which operates in Australia and New Zealand, for Bt2.5 billion. The company will also look for new properties to manage under its brand.

Overseas, MINT will expand its hotel portfolio through its own 5-star brand Anantara. Chaiyapat said opening hotels under its own brand would achieve a higher margin than managing other properties under contract.

"Opening only one hotel under our own brand will earn revenue equivalent to that of management contracts for eight to 10 properties combined,’’ he said. But he added that MINT would continue to expand through joint ventures and management contracts, especially in unfamiliar markets.

Beyond Anantara and Oaks, MINT has the Avani boutique hotel brand.

Currently, it has 15 hotels of |its own, 13 via joint ventures, |nine via management contracts, and 38 Oaks locations.

Chaiyapat said the company’s hotel business should remain good this year. Its occupancy rate is expected to be at least 70 per cent, up from 65 per cent in 2011. He believes that last weekend’s car bombings in Hat Yai will not have a negative impact on its hotel business.

In the food business, the firm also plans to expand, especially by opening new outlets for The Pizza Company, Swensen’s and Sizzler. Currently, it operates 1,257 restaurant outlets, and this number is expected to increase by 10 per cent in each of the next five years.

New brands will also be launched during the period, promoted both domestically and internationally at the same time.