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Insight Comment |
Dillip Rajakarier, CEO of Minor Hotels says the travel industry will return to pre-pandemic levels of activity by the fourth quarter of 2022.
Rajakarier, who also heads up parent company Minor International, qualified his prediction with reference to the uncertainties that remain around global health and restrictions. He quickly added, however, that the industry needs to do more than make up lost ground.
He said that widespread inflationary pressures meant that revenues would have to be 15-20 percent ahead in nominal terms at the end of 2022 to be at similar levels as 2019 in real terms. He singled out labour costs and energy as being particularly prone to inflation.
Recovery is happening, though, according to Rajakarier. There is also brisk M&A (mergers and acquisitions) activity. He said investors were flush with cash and eager to get the money earning more than the near-zero rates available on deposit.
Yet while there are plenty of opportunities, he cautioned against moving too far too fast. “Deals are like buses,” he said. “There is always another one coming down the road.”
He added: “Sometimes the best deal you do is the one you don’t do.”
Minor has remained active in terms of investment and development during the pandemic. It has made a notable push into the “wellness” segment, Mr Rajakarier said.
He added that hotel management companies may have to work harder, post-pandemic, at keeping owners satisfied. Rather than taking a fee and being left to manage, he said, they may be expected to have more “skin in the game”.
His comments came on the first full day of the Resort & Residential Hospitality Forum 2021, hosted at the Tivoli Marina Vilamoura Algarve Resort in Portugal.
Minor International (MINT) is one of the largest hospitality, restaurant and lifestyle companies in the Asia Pacific region. It is well known in Europe for its 94.1% shareholding in NH Hotels, the Spanish operator, which was bought for €2.3 billion in 2018.
Rajakarier said there were encouraging green shoots in the European operations. The company usually took around €4-5 million of business per day before the crisis and was now seeing reservations at the lower end of that range. “We’re now catching up to about four,” he said. “Every month our bookings are improving.”
Minor’s overall portfolio numbers 536 hotels and resorts in 56 countries across the Middle East, Asia Pacific, Europe, South America, Africa and the Indian Ocean. Anantara and Tivoli are among the company’s brands.
Rajakarier’s comments chime with those made elsewhere in recent weeks. On 21 September this year, for example, McKinsey & Company, the consultancy, published a report entitled: ‘Rebooting customer experience to bring back the magic of travel’. The authors, Vik Krishnan, Kevin Neher, Maurice Obeid, Ellen Scully, and Jules Seeley wrote: “The COVID-19 pandemic upended life as we know it, and devastated the travel industry globally. Now, the authors contend, “we find that the travel sector is bouncing back—yet recovery still has a long way to go.”
Rajakarier shared views on the transformation of the resort and residential market following the pandemic, changing travel markets and evolving consumer demand.
He joined Minor Hotels in 2007 as chief finance and investment officer. He was promoted to chief operating officer in 2008. He was promoted to CEO in 2011 and in January last year was appointed group CEO of the parent group, Minor International, alongside his leadership role as CEO of Minor Hotels.
During his time with the company, Rajakarier has seen the group’s core Anantara brand grow from just a handful of properties to become a leading operator and developer, currently with 43 luxury properties.
Rajakarier previously worked at Orient-Express Hotels, Trains and Cruises. He is responsible for Minor’s overall strategy, including the corporate shared services of legal, information technology and finance, as well as talent development and business culture. His ambition is to expand Minor’s hospitality, restaurants and lifestyle businesses into globally recognised leaders.
Rajakarier was interviewed by Edgar Ollé, who recently joined Christie & Co as managing director of Spain and Portugal.