20 Jul 2015
Words Minor Hotel Group

MAJOR PLANS

IN THIS SERIES OF ARTICLES, WE PROFILE LEADING SHORT-TERM ACCOMMODATION OPERATORS – THEIR ORIGINS, GROWTH, MARKET POSITION, AND FUTURE PLANS.

As recently as five years ago, Minor Hotel Group wasn’t a name likely to come up in any discussion of Australia’s accommodation landscape.  Now, Minor is a significant player in the Australian market, and they have major plans to expand their profile and presence.

Minor Hotel Group (MHG) is the hotels arm of listed Thai company Minor International PCL (MINT), a global business focused on hospitality and lifestyle products and services.  MHG is an owner, operator and investor with a hotel and resort portfolio of over 130 properties comprising more than 17,000 keys in 22 countries across Asia Pacific, the Middle East, Europe, South America, Africa and the Indian Ocean.

What began in 1978 with one small beachfront resort in Pattaya, followed by a single pizza restaurant (1980), has mushroomed into one of Asia’s largest restaurant companies (1,700+ outlets under various brands), one of Thailand’s biggest distributors of lifestyle and fashion brands, and a hotel industry powerhouse.

Minor’s accommodation brands include its uber-luxurious Anantara and upscale AVANI brands, both Thai-born, Per AQUUM, Elewana, Tivoli and Oaks.  MHG also owns two Marriotts, three Four Seasons, a St. Regis and a Radisson Blu.  It was the Oaks acquisition that gave them their Australian launch pad.

While the company was already active here, having bought a 50% stake in our largest café group The Coffee Club in 2008, it wasn’t until 2011 that Minor entered the accommodation arena.  And it did so with a major play.

Minor bought the financially strapped Oaks Hotels and Resorts, then with 35 apartment properties across five states, paying a reported $160 million.  It was their first foray into the Pacific and, at the time, doubled Minor’s international hotel interests.

The company has since invested strongly in expanding Oaks as one of Australia’s largest self-contained accommodation providers, now with a portfolio of 51 properties across Queensland, New South Wales, Victoria, South Australia and Western Australia, as well as in New Zealand, Thailand and the United Arab Emirates.

Driving MHG’s rapid international expansion is CEO Dillip Rajakarier (also COO Minor International), who oversaw the acquisition of Oaks and is now tasked with growing the group’s global portfolio to 150 hotels by 2020.

That will involve significantly building Minor’s upmarket home grown brands, Anantara and AVANI, along with strategic acquisitions in a number of countries.  Australia is set to figure prominently in that development plan, and the wheels are already in motion.

In its biggest Australian move since buying Oaks, Minor recently won the rights to develop two sites in the $5 billion Perth City Link project.  Plans for a twin-tower development in the prime CBD regeneration project mark the debut in Australia of the AVANI Hotel and AVANI Residences brands with an investment worth more than $110 million.

Announcing the news, Minor said a 250-room four- to five-star hotel and 15-level serviced apartments building would “introduce the AVANI brand hallmarks of essential comforts such as design for life living spaces, good honest food and all the details that matter for a fuss-free seamless stay.”  Our first AVANI Hotel is due for completion by the end of 2017.

“We are very excited to announce this new hotel and residential development in the centre of Perth, which represents, in parallel, a significant investment for the group, the introduction of the AVANI brands to Australia, as well as a new destination for Minor Hotel Group with Australia,” Mr Rajakarier said on winning the competitive Perth bid.

“Minor Hotel Group is already well established in the country with the Oaks brand and we have been actively exploring opportunities to bring some of our other brands to the Australasia region.”

It was a move Mr Rajakarier had foreshadowed back in 2013 when he told The Australian newspaper that, despite a decline in commodity prices, Minor was eyeing expansion in mining centres, including in the resource-rich states of Queensland and Western Australia.

True to his word, MHG went on to open the 144-room, 4.5-star Oaks Grand Gladstone, a wholly-owned hotel, in February 2014.  Speaking to HM at the opening, Mr Rajakarier again flagged aggressive expansion in Australia.  Since then, four new Oaks properties have opened in Melbourne, Brisbane and two in Mackay.

MHG’s hotel business incorporates four operational models:  owned hotels, joint venture hotels, management hotels (all of which are managed under Minor’s own brands), and management of serviced suites (the Oaks management rights model).  MINT also operates more than 55 spas in leading hotels in 15 countries.

“We have an opportunistic acquisition strategy … unlike some other big players, we’ll consider anything that complements our existing portfolios,” Mr Rajakarier said.

Aside from the Perth announcement, major international growth steps made already this year include a strategic move into Europe and South America with the acquisition of a 1,600-key hotel portfolio in Brazil and Portugal and, through Elewana, taking a majority stake in four Kenyan properties.

The Perth development announcement in April has again raised awareness in tourism industry circles around Australia of Minor’s acquisitive intentions.  Mr Rajakarier confirmed Minor was actively bidding for several Australian sites.

“We are still looking for an Anantara to come to Australia … we are looking at Brisbane, Melbourne, the Gold Coast,” he said.

The most upmarket and experiential brand in the Minor stable, Anantara is a Sanskrit word meaning ‘without end’.  The ‘Anantara experience’ seeks to bring guests closer to the rich cultural traditions, historic heritage and natural beauty of each location.

The concept has been introduced at breathtaking destinations in Cambodia, China, Indonesia, Maldives, Mozambique, Qatar, Thailand, UAE, Vietnam and Zambia.  So, we will watch with interest to see which Australian location ultimately befits the Anantara experience of “laid-back luxury, intuitive service and a sense of discovery.”

In the meantime, parent company Minor International continues to expand its food group here.  Its growing portfolio of The Coffee Club and Ribs and Rumps restaurants, was augmented last year when it took a 70% stake in Melbourne’s VGC Food Group, which owns Veneziano Coffee Roasters, The Groove Train and Coffee Hit.