Minor International Plc (MINT) expects its latest hotel acquisitions in Brazil and Portugal will make its hotel business stronger and pave the way for its entry into the European and South American markets in the near future.
A panoramic view of Tivoli Marina Vilamoura in Portugal, one of Minor International's new acquisitions to improve its hotel business overseas.
Yesterday the leading Thai hospitality company announced the strategic acquisition with an investment of €168 million (6.21 billion baht) for six hotels with more than 1,600 rooms. Two hotels are in Brazil and four in Portugal, all under the Tivoli Hotels & Resorts brand.
The Brazil acquisitions are Tivoli Sao Paulo Mofarrej and Tivoli Ecoresort Praia do Forte Salvador. The four Portuguese properties are leased to a third-party lessee who owns the Tivoli Hotels & Resorts brand in Portugal. The properties are Tivoli Lisboa, Tivoli Marina Vilamoura, Tivoli Marina Portimao and Tivoli Carvoeiro.
The six hotels will continue to be operated under the Tivoli and Tivoli Collection, the two labels within Tivoli Hotels & Resorts, said William Heinecke, chairman and group chief executive of Minor.
Owners of Tivoli Hotels & Resorts brands in Brazil and Portugal have a co-marketing and distribution agreement that covers 14 hotels and over 2,900 rooms in the two countries.
The average room rate of some hotels under this deal is more than €200 per night.
"The Tivoli Brazil portfolio not only generates immediate revenue and earnings for Minor but also allows us to leverage on the existing Brazilian operating platform for potential expansion of Minor's other hotel brands and business into South America," said Mr Heinecke.
Chaiyapat Paitoon, vice-president for strategic planning of Minor, said the six hotels had been profitable. The company expects they will contribute around 5% of total hotel revenues this year.
Minor envisions huge tourism opportunities in both countries. Brazil has beautiful beaches, rainforests and interesting culture for travellers to explore. Portugal has many interesting tourism destinations and historical buildings.
During the first nine months of 2014, Minor reported its net profit rose by 9% to 2.7 billion baht with revenue of 29.17 billion baht, up 9%.
For all of 2014, it projects total revenue will reach 40 billion baht. The hotel business will contribute around 50% of total revenue, with 50% from food and lifestyle product distribution.
Minor's five-year strategic plan from 2015 to 2019 projects 20% profit growth per year. Acquisition of the six hotels is an important step to help it achieve that target.
Following the acquisition of Oaks Hotels and Resorts in Australia in 2011, Minor completed a series of hotel investments including a luxury brand in the Maldives and upscale properties in Vietnam and Cambodia.
Last year the company increased its presence in Africa through a joint venture to operate hotels and mixed-use projects in Mozambique, and a partnership with Sun International to run hotels in four more countries in the continent.
MINT shares closed yesterday on the Stock Exchange of Thailand at 35 baht, up 50 satang, in trade worth 324 million baht.