Minor Hotels, a leading global hospitality company with over 550 properties across 56 countries, has defied seasonal trends and delivered a robust first quarter of 2024. Their impressive performance, exceeding both revenue and profit expectations, highlights the resilience of the travel industry and Minor Hotels’ strategic approach to portfolio management.
Surpassing Expectations: A Financially Strong Start to 2024
Minor Hotels reported a net profit of THB 530 million for Q1 2024, a significant accomplishment considering the historically slower first quarter for European hospitality. This achievement can be attributed to several factors:
- Sustained Travel Activity: The continued rise in global travel demand played a crucial role in Minor Hotels’ success. Despite challenges like seasonality, strong demand helped offset historical patterns and fueled positive revenue generation.
- Revenue Growth Across the Board: Core revenue for Q1 reached THB 29.6 billion, reflecting a substantial 17% year-over-year increase. This growth reflects healthy rate increases across the group’s portfolio, particularly in key regions like Europe and Thailand.
- Strong Performance from Owned and Leased Properties: Minor Hotels’ owned and leased properties emerged as a significant contributor to the company’s financial strength. These properties accounted for 80% of core hotel and mixed-use revenues, showcasing a 21% year-on-year increase. This growth underscores the effectiveness of Minor Hotels’ ownership and management strategies.
- Management Income Surge: Management income also saw a significant leap, rising 26% year-on-year. This growth is likely due to a combination of RevPAR increases across managed hotels and the addition of new management contracts throughout the year.
Defying Seasonality: Europe Shows Positive Signs
The European hospitality sector typically experiences a slow start to the year. However, Minor Hotels, with a vast portfolio of nearly 300 properties in Europe, managed to defy this trend. Here’s what contributed to their success:
- Continued Global Demand: As mentioned earlier, sustained global travel demand transcended regional seasonality. This robust demand helped generate strong revenue and narrow Minor Hotels’ quarterly core net loss to THB 968 million, a significant improvement compared to Q1 2023.
Regional Strength: Thailand and Middle East & Africa Thrive
Beyond Europe, Minor Hotels reported positive growth across other key regions:
- Thailand: Occupancy rates in Thailand demonstrated a remarkable improvement, with an overall increase of 10 percentage points compared to Q1 2023. This surge resulted in an impressive average occupancy rate of 80%, exceeding expectations.
- Middle East & Africa (MEA): Hotels in the MEA region also enjoyed strong growth, with occupancy rates rising by 11 percentage points to 65%. This positive trend was driven by popular brands like Anantara, Tivoli, and NH Collection.
Rising Rates and RevPAR Fuel Profitability
Another key contributor to Minor Hotels’ success was the positive growth in Average Daily Rate (ADR). Here’s a breakdown of this growth across different regions:
- Global Rate Growth: System-wide ADR figures for Q1 saw a positive increase of 11% year-on-year. Owned properties played a leading role in this growth, with a 14% year-on-year increase in ADR.
- Thailand’s Strong Performance: In line with its remarkable occupancy figures, Thailand again emerged as a top performer, demonstrating a 12% increase in ADR across its properties.
- Europe and the Americas: While not experiencing the same magnitude of growth as Thailand, Europe and the Americas still displayed a positive trajectory. Rates in these regions saw an average increase of 13% when calculated in THB terms. This translated to a significant 18% growth in RevPAR (Revenue Per Available Room).
Overall, system-wide RevPAR saw a 19% year-on-year increase. Notably, owned and leased properties significantly outperformed expectations. These properties experienced RevPAR growth of 21% compared to the prior year and a staggering 35% increase compared to pre-pandemic levels (2019).
A Bright Future: Continued Expansion and Growth
Dillip Rajakarier, CEO of Minor Hotels and Group CEO of Minor International, expressed optimism for the future based on these exceptional Q1 results. He highlighted the “agility and dynamic nature” of the company’s global portfolio as key factors behind its success. Additionally, strong forward bookings suggest continued momentum and an exceptional year ahead.
