Minor earmarks Bt3.4 bn to bulk up group’s hotel portfolio
MINOR HOTEL GROUP CO LTD, a hospitality arm of Minor International Plc, has set aside an investment budget of US$100 million (Bt3.4 billion ) to develop six new hotels in Thailand and overseas by 2020. This would boost the group’s total revenue by up to 20 per cent a year, chief executive officer Dillip Rajakarier said at group interview yesterday.
The hotels will be the Avani Khao Lak in Thailand, Oaks Bodhgaya in India, Anantara Quy Nhon in Vietnam, Anantara Desaru in Malaysia, Anantara Ubud in Bali, Indonesia, and Elewana Warangi in Tanzania. They will combine 625 rooms. The group will also sign contracts to manage 25 hotels that comprise 5,964 rooms.
The company will spend Bt9 billion to develop two luxury residential projects, Avadina Hills by Anantara in Phuket (Bt6bn) and Anantara Vacation Club Mai Khao Phase III (Bt3bn). Both projects are expected to open next year, with construction now underway.
Rajakarier said the company also planned to launch residential projects in Bangkok, Phuket and Chiang Mai between 2018 and 2020, but he could not announce the investment budget because of an ongoing study.
He added that the investment budget would come from company cash holdings and borrowings from commercial banks.
“When our investment is completed in 2020, our portfolio will increase from 154 hotels and resorts in 24 countries in the first quarter of this year to 250 hotels and resorts in 32 countries in the year 2021. Our total revenue from the hotel business will grow 100 per cent in 2021 from this year,” he said.
Up to 68 per cent of total revenue in 2021 would come from overseas, with the remaining 32 per cent from Thailand. This is a change from 54 per cent from international and 46 per cent from Thailand this year, Rajakarier added.
Up to 45 per cent of total revenue in 2021 would come from its own hotels, with 20 per cent from the Oaks serviced apartment and hotel business, 15 per cent from management contracts, and 20 per cent from residential projects. Currently, 49 per cent of its total revenue comes from its hotels, 19 per cent from Oaks, 4 per cent from management contracts, and 25 per cent from residential.
Rajakarier added that because Thailand was a hub in the Asean region, the company was also studying opportunities to expand its investment in Myanmar and Laos.
“For Myanmar, we are waiting for land prices to stabilise,” he said. “Land prices in Myanmar, especially in Yangon, are still high, so we have to wait and see.”
He said the company was considering all potential business opportunities, including joint ventures and management agreements.
The company is also studying the Laos market. If investments are made in these countries, they will be in addition to the US$100m of its five-year plan, he said.
Currently, the company has invested in and manages hotels in Asean countries including Vietnam, Malaysia, Indonesia, Thailand and Cambodia. In the Middle East, it has investments in the UAE, Oman, Qatar and Saudi Arabia. It also has investments in Tanzania, Africa as well as China, South Korea, Australia, New Zealand and Europe.
Rajakarier added that by expanding its investment both in Thailand and overseas, the company would be able to manage its business risks and balance its portfolio when the tourism business slowed down in some countries.
However, he said Thailand was its business base and the company continued to have confidence in Thailand and to expand its investment here.
He said the company’s hospitality business in Thailand grew 22 per cent in the first quarter of this year compared to last year, and he was confident that the double-digit growth would continue for the whole year, thanks to the high number of tourists visiting the country.
