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Bangkok Post
Bangkok Post
Business

MINT hiking room rates to boost revenue

SET-listed Minor International (MINT) plans to continue hiking its room rates to ensure profitability and a minimum 20% revenue increase across three businesses, using an investment budget of 10-15 billion baht as part of a three-year plan.

"Our strategy this year will continue to ensure an increase of the average daily rate (ADR) to offset the headwinds we face," said Dillip Rajakarier, group chief executive of MINT and chief executive of Minor Hotels.

Mr Rajakarier said the key strategies included reducing the impact of high inflation, the cost of living, labour costs and energy costs, as well as driving growth from revenue optimisation and pursuing the right market segment.

By increasing ADR, hotels can also gain better revenue per available room (RevPar) and profit margin through upscale and luxury customers who can still afford the higher rates, he said.

Mr Rajakarier said the overall RevPar of hotels globally in 2022 was back to pre-pandemic levels.

Those rates saw an upgrade in Thailand, the Maldives, Australia and Europe by 15%, 40%, 35% and 20%, respectively, in 2022 compared with 2019.

The three-year plan, from 2023 to 2025, will see Minor add another 70 hotels to its portfolio.

The company aims to secure revenue growth of at least 12-15% per year, return on invested capital of at least 10%, and core profit growing at a double-digit pace.

As China has reopened, Mr Rajakarier expects to see a ramp-up from this market in the next 6-9 months, but not immediately as flights remain limited alongside long visa processes.

Mr Rajakarier said the company also sees an opportunity to expand its hotels in China, with 10-15 hotels in the pipeline from a joint venture with Funyard Hotels & Resorts.

He said a loyalty programme with 22 million members globally and the wellness retreat clinics in its properties would both help ensure growth in hotel operations this year.

MINT will sell perpetual bonds with a 6.1% coupon return rate and a BBB+ credit rating for public subscription between Feb 7-9.

After halting dividend payments for two years, Mr Rajakarier said the company planned to restart them in 2023.

MINT operates three businesses -- Minor Hotels, Minor Food and Minor Lifestyle -- in Thailand and overseas.

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