Hospitality giant Minor International (SET: MINT) boasted robust 2023 performance and forecast a rosy outlook for this year, thanks in part to the Srettha Thavisin administration’s tourism stimulus measures, particularly the permanent extension of visa exemption for Chinese travelers to Thailand.
MINT’s hotel business in Thailand reported 75% occupancy and a year-on-year Average Daily Rate (ADR) increase of 10% in December 2023, a considerable increase upon 2022 and pre-COVID 2019.
As for 2024, this year is off to a promising start with room bookings for hotels in Thailand in January-February already soaring by 20%-30% year-on-year. When considering bookings from Chinese guests alone, the figure nearly doubled that of 2023. This reflects the government’s report that Chinese tourists topped the list of international visitors in the first week of the month.
“We are seeing Chinese tourists coming back strong, despite their economic challenges,” said Mr. William Heinecke, MINT’s Chairman.
With presence in close to 60 countries across the globe, Minor Hotels are reaping benefits of a robust rebound in leisure and business travel, enabled by expanding flight capacity. Strong financial performance and cash flow have allowed MINT to accelerate its debt repayments and bring its net debt to equity ratio to a low level of 1x, with the firm’s commitment to further reduce the ratio amidst high interest rate environment, thus enhancing earnings power. Moreover, in MINT’s three-year forecast, this uptrend is expected to continue, with revenues and profit in all regions set to rise each year.
“We embrace the positive outlook and are in full support of the government’s policies. But more can always be done,” said Mr. Heinecke.
While applauding the Thai government’s efforts in stimulating the tourism sector, including the visa exemption scheme, extending entertainment venue operating hours, tax cuts on alcoholic beverages, and the prime minister’s ambassadorship to attract foreign direct investments (FDI), the hospitality magnate also urges the government to continue to promote Thailand’s soft power, particularly through film, food, holistic wellness, sports, and music. Doing so will further boost Thailand’s global allure, thus lifting tourism. The government can offer further incentives to facilitate international concerts in Thailand, much like the country does for the film and movie industry.
‘We envision the fusion of ancient wellness traditions, world-class medical facilities, picturesque landscapes, and Thai hospitality to draw travelers from around the world,’ said Mr. Heinecke.
In addition to these cultural and promotional efforts, Mr. Heinecke emphasized the need for more government support in various key areas. Specifically, he called for support and incentives to airline operators to increase flight capacity and air connectivity, as well as to lower airfares and make travel more affordable for tourists. He also suggested the government continue to target wider feeder tourist markets to Thailand, reaching beyond the conventional ones.
Furthermore, Mr. Heinecke proposed the promotion of Thailand’s retirement visa, which would not only attract retirees but also benefit other parts of the economy such as wellness, medical and real estate sectors through a knock-on effect. He recommended tax incentives, including tax-deductible expenses for domestic tourism during the low seasons in the second and third quarters, to stimulate tourism year-round.
Mr. Heinecke emphasized the importance of strengthened diplomatic and socio-economic ties with China to help the country maintain its position as one of Thailand’s largest partners. He also urged the administration to promote greater intraregional tourism within ASEAN and longer visa-free initiatives.
“Tourism is a key driver of the Thai economy, and with the right initiatives, I’m confident we will see vigorous growth this year,” the businessman added.
