GOSTELOW REPORT—“In the past we were not seen as a global player. NH has changed that, and now we are in a very strong position,” says Dillip Rajakarier, CEO of Minor Hotel Group, based in Bangkok, Thailand.
On October 19, 2018, Minor, led by Rajakarier and his chairman, American-born William Heinecke, finalized its acquisition of 94.1% of NH Hotel Group SA, headquartered in Madrid, Spain.
At a cost of €2.3 billion (US$2.6 billion) Minor bought the 25.2% of NH previously held by China’s HNA group: The rest was acquired through an early 9.5% acquisition and a tender offer. NH Hotels’ 354 properties are being assimilated into the total 525-strong Minor portfolio, with a confirmed pipeline of approximately 80 hotels and resorts.
Minor now has a considerable range of hotels. Anantara is the top of the ladder, followed by the “upper-upscale” brands – Tivoli, NH Collection, Avani Plus, Nhow and Avani all catering to different audiences in the 4- to 5-star space. After them come NH Hotels, and the Australia-centric Oaks, which is evolving from serviced apartments to hotels.
Not included in the ladder are Africa’s Elewana safari lodges, Corbin&King restaurants in the U.K., and over 2,300 restaurant outlets throughout south-east Asia. (Coffee Club is part of Minor Food, not Minor Hotels.)
Minor continues in fast expansion mode, still miraculously following the Rajakarier maxim that clusters are best. He now has clusters in Madrid, for Europe; Dubai, for Middle East; Nairobi for East Africa and Johannesburg for Southern Africa; Bangkok, for global and Asia; and Sydney, for Australia. He also has a cluster for South America in São Paulo, where so far the main penetration is in Brazil, which will have five open properties by the end of 2019.
“Our purchase of NH Hotels will help substantially in the Spanish-speaking markets. We have been looking at the U.S. for some time but so far we cannot get anything that is just right. We need something that is good for our shareholders and our guests. NH in fact already has a hotel in New York which is currently being renovated, and Miami might be the next step,” he explained.
At present Minor does not franchise. It will invest, if necessary, apart from the Middle East and China. With open properties in 53 countries, the CEO’s biggest professional challenges are working through different cultures, and, as is ubiquitous in the industry, talent.
“A couple of years ago I went to Australia with the then-Prime Minister of Thailand and he asked me what was my challenge. I said training and education. He said he would make it happen. Now we have our education license. Starting August 2020, we will open two Les Roches campuses, within the commercial building at Avani Riverside Hotel, Bangkok, and also at Avani Pattaya, 90 minutes away – and we will start with about 60 students and ramp it up from there,” he said.
It would be obvious to conclude that another main challenge is time, but perhaps fortunately Rajakarier sleeps only four hours a night, a routine he has followed for years. This is certainly an advantage since he has many other responsibilities; he is also COO of Minor International, the owning company.
Rajakarier also sits on the board of Global Hotel Alliance (GHA), which means a number of meetings a year in one part of the world or another (Minor paid US$3.2 million for 10% of GHA, which is based in Dubai, UAE). He says GHA membership works really well and there is 15% redemption of such Discovery rewards as airport transfers, or camel rides, or other experiences offered through the GHA program as a member benefit. There is also sizeable new business coming, via www.globalhotelalliance.com, from some of the other 30-plus brands in the GHA network.