Minor Hotel Group (MHG) has had a presence in Africa since 2008, but the Bangkok-based company — whose portfolio currently includes 119 properties in 19 countries under brands such as Anantara, Avani and Per Aquum — recently has strengthened its commitment to growth on the continent. In August, MHG announced a partnership with Sun International to own and operate eight properties in five African countries, and last year MHG teamed with Rani Investment to form a joint venture for the ownership of a resort in Mozambique.
HOTELS spoke with MHG CEO Dillip Rajakarier about the company’s African commitment as well as its broader goals for growth.
HOTELS: Discuss the significance of your partnership with Sun International that was announced in August. How does it complement your partnership with Rani Investment?
Rajakarier: The two partnerships we’ve entered into with Rani Investment and most recently Sun International each focus on different parts of the continent and different types of properties. With our recent partnership with Sun International, we are bringing our expertise in hotel operations and broad marketing and distribution channels together with their expertise in on-property casinos, which should significantly benefit both parties.
Our African expansion allows us to create scale and synergies between our partnerships. Our partners are fully supportive and looking to further strengthen our position in the region.
HOTELS: Why is Africa such a strong focus for expansion for MHG? What are some unique challenges of operating there, and what are some ways you have found to overcome them?
Rajakarier: MHG has been present in Africa since 2008 when we bought a 50% stake in Elewana Collection — camps, lodges and beach resorts in Tanzania and Kenya. There is huge untapped potential across the continent of Africa, and we are keen to explore multiple opportunities. There are challenges with the infrastructure, sourcing talent and more recently terrorism and Ebola, but we face these challenges and threats in many of the markets we operate in, so Africa is not unique. We also believe in the growth potential of Africa, which has natural resources and the population size to drive future GDP growth. Many of the international companies are establishing their presence to leverage that growth.
HOTELS: What is the timeline for MHG’s growth goals, and what markets or areas of the world are your most important targets?
Dillip Rajakarier: MHG has a strong pipeline of more than 20 properties in Asia, the Indian Ocean and the Middle East, including properties across multiple brands from MHG’s portfolio. We are confident we will reach our target of 150 properties in operation and under development by the end of 2015. We are looking to continue our growth in the existing footprint — from Australia to Africa. The company is focused on long-term sustainable growth and is very opportunistic in terms of evaluating expansion landscape.
HOTELS: When it comes to expansion, is your focus primarily on owning and managing, strict management or a combination of both?
Rajakarier: MHG currently purely manages 25 properties, which includes all five of our brands. The other 94 are split across majority owned, JV and MLR.
MHG adopts what we call an “asset-right” strategy. In certain geographical locations we would go for an asset-light or management model and other locations will target asset-heavy or an equity-investment model.
HOTELS: What are your growth targets for your different brands, particularly Anantara and Avani?
Rajakarier: For Anantara, 2015 openings will include two resorts in Sri Lanka and two in Oman, plus one in China. All will be new-builds, and Oman will be a new country for MHG. Our development team are actively pursuing opportunities in the Middle East and Africa for continued expansion of the Anantara brand, plus in Asia too.
The first quarter of 2015 will be very busy for our upscale Avani brand with the opening of Avani Seychelles — a new country for us — and seven rebrands across five countries in Africa. These African rebrands are the properties we now own a stake in through our recent new partnership with Sun International. We are also very excited about the first new-build Avani, which will open in Bangkok in the fourth quarter next year.
We have development plans for all of our brands. However, the brand with the most growth potential is Avani. The brand has become more established, brand awareness is growing and there is now some momentum with the growth of the brand, hence we are in a stronger position to sign deals for both new Avanis and rebrands to Avani.