Minor International Plc, one of Asia’s largest hospitality groups, plans to halve its more than $7 billion in liabilities by floating a real-estate investment trust (REIT) next year, while betting on a strong recovery in tourism to drive double-digit growth in profit.
The Bangkok-based operator of more than 500 hotels worldwide, Minor plans to float “a very strong REIT” by re-deploying some of the properties in its portfolio to cut its liabilities, said chairman Bill Heinecke.
The move will further reduce leverage and have a “major impact” on the company, he said without identifying the hotels that would be brought under the planned REIT.
Minor’s total liabilities stood at 255 billion baht ($7.3 billion) at the end of September, and the company’s target was to bring it down to half, Mr Heinecke said.
With the peak holiday season ahead, Minor sees an “extremely strong” performance in the last quarter of this year which will sustain into the first quarter of 2025, he said.
Despite a slowdown in China, he foresees strong growth in the rest of the world, especially in the Middle East and Europe with not “much of a hiccup” expected over the next six months.
“We’re seeing the whole travel and tourism recovering quite quickly,” Mr Heinecke told Bloomberg Television on Tuesday. “Rates are much higher, whether airlines fares or hotel room rates, and we’re seeing occupancy slightly higher too.”
Shares of Minor rallied as much as 7.8% on Tuesday, the biggest intraday gain in more than two years, while the benchmark Stock Exchange of Thailand index advanced 1.3%.
Minor’s core profit growth remained strong despite net income being hit by the currency fluctuations in the third quarter, Mr Heinecke said. The company reported net income of 4.12 billion baht in the first nine months, down 7% from the same period a year ago due to volatilities in the baht against the US dollar.
Minor currently has 560 hotel properties in 57 countries, with most of its business in Europe through NH Hotel Group, which it acquired in 2018. The company also runs more than 2,600 restaurant outlets in 24 countries, with the majority located in Thailand.
The company is pushing ahead with its global expansion plans, especially where it has no presence currently, Mr Heinecke said. It may announce its foray into Japan early next year and is due to open a hotel in Singapore in 2026, he said.
White Lotus effect
The American-born founder of Minor was also upbeat about the outlook for tourism in Thailand. The third season of hit television series The White Lotus — set to air in early 2025 — will give Thai tourism a major boost and push foreign tourist arrivals beyond even the government target of 40 million, he said.
Five Minor-owned hotels were used as filming locations, including four in Samui and one in Phuket, he said.
“This promises to be a barn burner and probably one of the brightest spots in the Thai tourism market,” said Heinecke.
“We’re looking at 45 million foreign tourist arrivals next year. We think the numbers are going to be very strong for Thailand.”
The government said on Tuesday that 30.6 million foreign tourists had arrived for the year to Nov 17, with expenditure estimated at 1.43 trillion baht.
Authorities have forecast a full-year total of 36 million foreign visitors, up from 28 million in 2023.