SET-listed Minor International Plc (MINT) has set its sights on becoming the most profitable hospitality company globally after securing its biggest deal -- full acquisition of Tivoli Hotels & Resorts.
The company said its hotel portfolio was smaller than that of big international hotel groups, but its enterprise value divided by earnings before interest, taxes, depreciation and amortisation (ebitda) stood at 17, higher than the average of 10-12 for Marriott Hotels & Resorts, Starwood Hotels and Resorts Worldwide and InterContinental Hotels Group.
The full takeover of Tivoli, which owns 14 hotels in Portugal and Brazil, paves the way for Minor to enter Europe and South America.
The company will expand business over there right away after the transaction and management system are settled.
Minor now has a presence in Africa, Asia, Australia, Europe and South America and is looking at opportunities in North America.
"We set our benchmark to compare with global hotel companies, not local operators," said Dillip Rajakarier, chief executive of subsidiary Minor Hotel Group.
"We want to be the most profitable hotel company, not the biggest player."
He said to sustain growth, the company cultivates long-term relationships with hotel owners, shareholders and clients alike.
Many hotel owners have shifted to using Minor's six hotel brands, Mr Rajakarier said.
Minor expects its hotel portfolio will grow by more than 50% by 2020 on the back of global tourism trends and the company's strategic diversification.
Minor expects to have 210 hotels in its portfolio five years from now, up from 135 as of last October.
The company generally expects annual hotel revenue growth of 15-20%, in line with its expansion.
However, Mr Rajakarier said 2017 revenue should see a significant jump thanks to the contribution from Tivoli hotels, plus many existing hotels will be fully operational after refurbishment is completed this year.
Last year, Tivoli generated revenue of €121 million (4.81 billion baht) with an ebitda of €31 million.
Mr Rajakarier said his company planned to refurbish Tivoli hotels under this year.
Revenue and ebitda from Tivoli will grow by only 4-5% this year but should double next year.
Therefore, the revenue contribution from Tivoli will account for 10% of its hotel revenue next year, double the proportion in 2014.
MINT shares closed yesterday on the SET at 34.75 baht, up 1.50 baht, in trade worth 463 million baht.