Hotel-Food / Minor International

Editorial staff

Minor International Plc (MINT), plans to allocate 30 billion baht to expand hotel and food business over the next three years.

Dillip Rajakarier, MINT's group chief executive office, said that the company will invest 30 billion to expand its hotel and food businesses both domestically and internationally within the next three years. Of the total, 70% of the investment budget will go to hotel and the remaining 30% ​​ will be reserved for food expansion.

Dillip Rajakarier

For the investment of hotel business, 90% will focus in overseas and the remaining 10% will be in Thailand. While food business, its investment of about 60% will be spent in domestic market and 40% in overseas.

“I am not worried about the economic or tourism situation, inflation, high interest rate or higher cost of goods sold. People are our concern because many people left the market due to the Covid-19. We need people to come back and give them to get experience with quality service,” Mr Dillip said.

He adds that Minor's expansion plans within the next 3 years, will be made under 3 main strategies.

The first strategy is to continue expanding approximately 200 - 500 new hotels and opening other 1,000 branches of restaurants both domestically and abroad. The total number of hotels and restaurants under Minor group will reach 780 and 3,700 respectively within 2026.

The second is to focus on reducing debt burden, aimed at reducing its net interest-bearing debt to equity ratio from 1.0x at the end of 2023 to 0.8x by the end of 2024. Doing so during high interest environment will serve to further enhance earnings growth power. Also, the company's debt is expected to drop to 90 billion baht this year from 100 billion baht last year.

The last is the company will expand its business by more focusing on "asset-light model", expanding via hotel management contracts and food franchising, to drive sustainable growth while minimizing capital expenditure. The proportion of management contract business will increase to 40% in the next three years from the current proportion of 18%. In addition, the company will also expand its restaurants through franchising.

Anantara Grand Hotel Convento di Amalfi - Exterior

Mr. Dillip adds that the company will strengthen its food presence in Asean by opening restaurants via franchisee in India this year under the brands such as Dairy Queen, The Pizza Company and The Coffee Club.

It will expand Sizzler, The Coffee Club and The Pizza Company brands in Vietnam and Singapore. In addition, Minor Foods is also preparing to expand market size of its Dairy Queen ice cream business in Indonesia by 10 times over the next 2-3 years from at present 19 branches.

“We are also preparing to expand Minor food businesses in the countries, where we have already expanded its business into. The Philippines, the Middle East, Australia, China are also in our business pipeline,” Mr Dillip said.

For the hotel business , the investment budget will be used to renovate, rebrand and upgrade its hotel to more premium brands, aiming at increasing its room rates price. The number of premium hotels is expected to rise to 50 in the next 2 years, up from approximately 20-30 hotels at present.

MINT posted a threefold increase in core net profit of 7.13 billion baht, setting a new bar for the highest annual profit in the history of the company. A global leader in the hospitality and tourism industry with a presence across 63 countries, MINT benefited from the robust performance of its European operations while also recording a resurgence in demand for travel in Thailand.

For 4Q23, MINT closed the year on a high note with core net profit of 2.51 billion, an impressive 77% year-on-year increase on a like-for-like comparison. Growth in profitability was attributable to all of MINT’s core business units.

For Minor Hotels, 4Q23 RevPar of Thailand and European & LATAM hotels experienced 15% year-on-year growth, and achieved 23% and 27% increases, respectively, compared to the same period in 2019. Throughout 2023, Minor Hotels achieved an overall RevPar that exceeded 2022 and 2019 figures by 30% and 31%, respectively.

Minor Food also recorded 11% year-on-year growth in its 2023 total system sales, driven by a resurgence in dine-in activities as well as innovative product and marketing strategies across all hubs. This growth in both top and bottom line reaffirms the strength of MINT's diversified business model and its ability to leverage positive momentum in the global tourism and restaurant industries, as well as disciplined cost management, enhanced productivity, and stronger profit flow-through.

MINT is off the block with a strong start in 2024 with room revenues in January and on-the-book value in February and March surpassing the levels recorded in 2023 by 39% for Thailand and 20% for Europe.