Minor International Forecasts Record 4Q Profit as Tourism Grows
Minor International, which just completed the purchase of a Portuguese hotel chain, expects a record first-quarter profit, bolstered by a strong flow of visitors to countries where it has a presence, Chief Operating Officer Dillip Rajakarier said.
The Bangkok-based company plans to add new hotels to its existing 145 properties spread across 22 countries through organic growth and acquisitions, according to Rajakarier, who is also chief executive officer of the Minor Hotel Group Co. unit. On Tuesday, it finalised the acquisition of Tivoli Hotels & Resorts’ 14 hotels in Portugal and Brazil for €294 million. The properties used to be controlled by Portugal’s Espirito Santo family.
"We’re releasing our fourth-quarter numbers in February and it will be a good year," Rajakarier said in an interview in Lisbon on Tuesday. Asked if he expected to post a record profit in the fourth quarter, Rajakarier replied: "Yes."
Minor International has invested more than $550 million over the past two years in acquisitions and hotel projects in Africa, Asia, Australia, South America and Europe, said Rajakarier.
The company plans to continue to invest at the same rate or "maybe more" than it did over the past two years to expand its business or purchase hotels in Africa, the Middle East and Europe, said Rajakarier, who worked as deputy chief financial officer for Orient-Express Hotels before joining the Minor Hotel Group in 2007.
Europe is especially attractive "because the euro is weaker and we think you can still do some good deals and create value," he said. "These are the places that are quite attractive from an acquisition perspective."
While the tourism sector still faces challenges in terms of natural disasters and security issues, the prospects for the industry remain positive, Rajakarier said. A record 1.2 billion tourists traveled abroad in 2015, 50 million more than in the previous year, according to the United Nations World TourismOrganization.
"Overall the mass population still travels," Rajakarier said. "And you know we haven’t still seen the impact of China and India. Because when you look at China, it’s 1.3 billion people and only about 7 percent or 10 percent of the people are traveling today. Can you imagine if that starts to grow?"
News by Bloomberg, edited by Hospitality Ireland