Strong performance in Europe and Thailand drives revenue and profit growth beyond expectations
13 Nov 2024: Minor Hotels has continued its robust growth trajectory, with Q3 results revealing significant increases in core profit and revenue. The group, which owns and operates more than 560 hotels across eight brands globally, announced a core net profit of THB 3.1 billion for the first nine months of 2024, marking a 13% year-on-year increase.
Year-to-date core revenues reached THB 100.2 billion, 11% stronger than last year and exceeding budget projections. This impressive performance was mainly led by hotels in Europe and Thailand. Year-to-date core profit was up 13% on last year and 23% ahead of forecasts, despite the negative impact of an unrealised foreign exchange loss. The company's ability to outperform forecasts underscores its operational efficiency and market responsiveness.
The strong third-quarter growth was fuelled by robust demand in both business and leisure travel across Europe, with Minor's home base of Thailand also benefiting from a strong low season. Occupancy rates across the global portfolio reached 69% in Q3, up one percentage point from the previous year. Systemwide Revenue Per Available Room (RevPAR) grew 6% in Q3 compared to the same period last year and was up 12% year-to-date.
European portfolio drives growth
Minor Hotels Europe & Americas achieved a notable 9% year-on-year RevPAR increase and a 7% gain in ADR. The high season spurred gains in Spain, Central Europe, and the Benelux region, supported by rising visitor numbers from the US and UK. Capitalising on this positive backdrop, Minor Hotels successfully executed strategic pricing and marketing initiatives to maximise the strong travel trends.
For the first nine months of 2024, Minor Hotels Europe & Americas posted EUR 1,789 million in revenue, a 10.9% growth over the same period in 2023. This robust increase highlights the company's strategic emphasis on revenue optimisation and operational efficiencies.
A pivotal driver of growth, ADR rose 6.2% year-over-year to EUR 146, with Spain and Central Europe leading performance gains across the portfolio. RevPAR increased 8% to EUR 101, underscoring Minor's focused pricing strategy and enhanced demand in high-growth regions.
This performance translated into a significant 52% growth in recurring net profit, totaling EUR 141 million.
The third quarter continued this upward trend with revenues of EUR 644 million, a 10% increase over Q3 2023, driven by a 7.3% rise in ADR to EUR 152. This ADR uplift accounted for 83% of RevPAR growth, with Spain and Central Europe demonstrating particularly strong performance.
Thailand leads performance in Asia
Despite the seasonal rains during the traditional low season, RevPAR in Thailand grew by 12% in Q3, thanks to a steady influx of international tourists and thriving domestic travel. Occupancy increased two percentage points year-on-year to 66%. Minor's yield optimisation strategy drove a 9% ADR increase and a 2% occupancy increase, showcasing the company's ability to attract diverse and lucrative traveller segments year-round.
New launches in Asia for Q3 included an NH Resort and NH Collection hotel in Sri Lanka, an NH Hotel in Bangkok, and an NH Collection Resort in Koh Samui. Half of these new openings are under management contract, aligning with Minor's strategy to boost profitability while leveraging its management infrastructure to expand in key high-growth markets. These additions strengthen the company's market position and appeal to a broader range of travellers.
Group poised for continued growth
Dillip Rajakarier, CEO of Minor Hotels and Group CEO of Minor International, stated, "Our outstanding performance this quarter underscores the strength of our strategic focus on high-growth markets and our agility in adapting to evolving travel dynamics. The robust expansion in Europe, coupled with Thailand's continued recovery, showcases the success of our revenue optimization initiatives and our unwavering commitment to delivering exceptional guest experiences. As we approach the high season, we are well-positioned to capitalise on rising demand, driving sustained growth and delivering substantial value for our stakeholders"
With the high season ahead, Minor Hotels is well-positioned to capture strong demand across its key markets. Forward bookings in popular destinations like Thailand and Bali are on the rise, driven by exclusive holiday experiences targeted at high-end travellers. In Europe, corporate travel demand remains steady, and December holiday bookings are gaining momentum.