Minor Hotels hungry for more, please

NEW YORK CITY — In New York City recently for business and a conference, Minor Hotels CEO Dillip Rajakarier readily acknowledged it’s been an active year on many fronts, from adding a quartet of new brands and creating a guest-facing master-brand strategy to being opportunistic about expanding Minor’s distribution footprint globally. It’s a pace, he said, that finds him sleeping only four hours a night.

“Our focus is on growth and how we’re growing our brands in the different regions and in some of the new markets as well, where we have to compete with some of the larger brands. It’s not easy but I think we’ve done a pretty good job the past few years,” Rajakarier said. “The brand has really gained a lot of scale and we’ve also been able to rebrand from the other brands, which shows owners trust us and they are confident about that brand delivery and the performance, as well.”

With the launch this past summer of four new brands—The Wolseley Hotels and Minor Reserve Collection in the luxury tier, premium soft brand Colbert Collection and select-service iStay Hotels—Minor Hotels currently has a dozen brands for owners and developers to consider, which the CEO viewed as an advantage.

“The good thing is we only have 12 brands,” Rajakarier continued. “Each of the brands is in very specific market segments from ultra-luxury to luxury to upper-upscale to midscale to select. We do have some soft brands, as well, to cater to the demands of hotel owners who want to keep their own hotel brand but [want] to be part of a larger distribution platform.”

Minor Hotels is launching four new brands, from luxury to soft brands and select-service.

In addition to the recently launched brands, Minor’s brand portfolio includes luxury Anantara Hotels & Resorts, elewana Collection, Tivoli Hotels & Resorts; premium nH Collection Hotels & Resorts, nhow Hotels & Resorts, Avani Hotels & Resort; and select nH Hotels & Resorts and Oaks Hotels, Resorts & Suites.

With more than 560 hotels, resorts and branded residences, the company has a relatively near-term goal of adding some 300 properties by year-end 2027.

Within that timeframe, Rajakarier expects to see the debut of both its Anantara and Wolseley hotel brands in the United States, where currently it’s solely represented by the 288-room Hotel nH Collection New York Madison Ave.

“We should be able to get something in New York for Wolseley because the brand is so well accepted and so well-known by the American travelers into London (The Wolseley is a renowned café/restaurant in Mayfair on Piccadilly). Therefore, the brand will resonate really well with this market as a hotel brand also,” Rajakarier said.

With the wealth of architecture in Manhattan, the CEO was asked if Minor would look to do a conversion/ adaptive reuse of some iconic building.

“I think for the Wolseley, a conversion in an historic location or an historic building, yes, will fit with the Wolseley theme, as well,” he said.

And as might expected, a Wolseley Hotel will have a Wolseley restaurant as a premier draw.

Rajakarier noted London and the Middle East also are on the company’s radar to debut the brand.

Minor also is eager to bring the Anantara brand to the U.S. ”We’re quite strong [with the market]; 15% of our total revenues [for the brand] are generated by the U.S. Therefore, the U.S. segment is very important for us because they are seeking lifestyle, luxury and experiences, which will help us launch the Anantara brand successfully here,” he said.

“I’m fairly confident that both [U.S. brand introductions] will happen by next year,” he added.

Meeting challenges

Among the challenges in having its expansion plans gain traction, said Rajakarier, is to “ensure the brand consistency, the brand promise and the brand delivery is there. The good thing with us is we are segmented by regions. So, we have offices in the big hotel areas, for example, Australia, Africa, Europe, Asia and China. They carry out the delivery of the brand promise, including the guest experience and ensuring they deliver that consistent customer experience all the time.”

That dedicated approach also resonates with owners considering switching brands, he said.

Anantara Siam Bangkok is undergoing a$50 million renovation, including this Garden Terrace Villa.

“We have seen movement from the larger global brands to us, for sure. I think today owners want to ensure their asset is not just another brand. They want to make sure they are part of a brand where there’s performance, where there’s the owner relationship.

“There’s also the link between the owners and us. We are owners,” he continued. “Today, we own two-thirds of our portfolio. So, we understand the owner mindset, which is really important for us. We can relate to the challenges the owners have with some of the larger brands because we also own some of the larger brands as well… We own three Four Seasons, a St. Regis, a JW Marriott, and a Radisson in Africa.”

In Thailand, for example, these include the Four Seasons Resort Chiang Mai, Four Seasons Resort Koh Samui, Four Seasons Tented Camp Golden Triangle and the JW Marriott Phuket Resort & Spa.

“I think it helps a lot to have that owner mindset instead of just having a management company mindset [because] we can benchmark and see how they do versus how we do,” Rajakarier said.

So, how are the KPIs?

“From what we see in terms of expansion, scaling up we’re doing quite well,” Rajakarier said. “We’re getting a lot of owners who want that brand niche experience. They don’t want just another Marriott or IHG or something; they want something special. So, some of the owners, if they are willing to create that experience and that brand standard, we have a good fit.”

The executive suggested the pace of expansion is not likely to slow any time soon. If anything, he indicated that Minor was open to a variety of ways to continue whetting its appetite for growth.

“We’re always looking – either on an asset-by-asset basis or for portfolio deals which would fit any of our brands and [have us] expanding into new markets,” he said.

He added that Minor’s strategy is not about being asset light or asset heavy. “We call it being asset right. [That’s] to ensure some of the locations where we go, for example, a Tier One city, it fits the brand,” Rajakarier said. “We will look at investments as well. The pipeline we have today, the majority of the pipeline is… asset-light.”

We’re looking at restructuring our balance sheet from a financial perspective and trying to reduce debt, also releasing some capital for expansion in the future. The REIT fits in really well.

Dillip Rajakarier

Share this quote

Exploring a franchise model for its non-luxury brands also is a consideration, Rajakarier said, as well as continuing to form joint ventures, such as its parent company, Bangkok-based Minor International Public Co. Ltd.Ja’s deal with Japan’s Royal Holdings Co. to develop and operate some two dozen hotels over the next 10 years under Minor’s Anantara, Avani and Tivoli brands.

And as recently as last week, Minor Hotels inked an agreement with Egypt-based Sunrise Resorts and Cruises to—among other goals—open and manage 50 hotels in the country over the next 10 years via a JV entity.

“We’re looking at asset-light expansion or JVs in different ways—whether we take majority, whether we take minority [stakes]—or even working with some of the white label [operators] to expand our brands here in the U.S.,” Rajakarier said. “Then we have the Minor Reserve Collection, which is soft brands. We have quite a few of our owners who would like to keep the name of their hotel, but they want to be part of our brand. So, they can be part of the Minor Reserve Collection.”

REIT in view?

And while it was talked about last year, with the possibility of it happening this year, it’s next year that Minor now plans to launch a real estate investment trust, according to Rajakarier.

“We’re looking at restructuring our balance sheet from a financial perspective and trying to reduce debt, also releasing some capital for expansion in the future. The REIT fits in really well,” Rajakarier said. “The REIT we’re planning is going to be next year and we’re hoping to list [it] in Singapore, which has a fairly strong investor following for the REIT segment. Also, in the future, when we’re acquiring assets, we’ll be able to inject them quite successfully into the REIT as well, which will allow us to expand much faster.”