Minor International Public Company Limited (MINT) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to our first quarter results. So today, I'll do the presentation for the food and the hotels. So moving on, the agenda today is to talk about our recent successes in terms of what we achieved for Q1, the numbers you have already seen and also talk about -- a little bit more about our strategic highlights, 2025, our key priorities for this year and also the Q1 2025 review as well. So in terms of what we have achieved today, the recent successes. Today, when you look at this slide, our transformation initiatives are showing very strong tangible benefits as you have -- with a strong increase in the bottom line compared to Q1 last year. And as you can see, like we delivered a 50 million core net profit in 2025, which was a significant turnaround from last year's loss, core loss, which we presented last year. So this makes a turning point today in our financial narrative. The strong demand was mainly uplifted with revenues and margins driving a profitable Q1. Even in Europe, which is the lower season, structurally improving the profile, also a milestone indicating the success for post-merger synergy realization. So when we acquired NH in 2018, we have been announcing a loss in Q1 every year and mainly driven by the low season seasonality in Europe. And because we are -- our assets -- in terms of our assets, we're so highly concentrated in Europe and the Americas, this also had an impact on Minor International, the results as well. But this year, for the first time, we have turned around and we have announced profit for Q1. Minor Hotels, Europe and Americas, the RevPAR in Q1 was up by 8% in spite of some of the headwinds we are seeing in Europe. And in Thailand, our RevPAR was up by 10% year-on-year, which again is quite strong, considering Q1 also being one of our high season months as well. Now turning to Minor Food. You saw from the video that our marketing initiatives have really helped us to achieve a strong momentum with a 22% year-on-year in both diner and digital sales. We -- Minor Food is now transforming more into the digital transformation, and therefore, we are seeing the results for Minor Food as well. So this will also help us to increase the repeated consumption and the frequency of sustainable sales growth for Minor Food. We've also registered the customers in our CRM, which is called customer relationship management in Minor Food as well, which has been quite strong for all our brands within Minor Food. So the Minor Food, our core net profit grew by 5% year-on-year with a margin expansion to 8%, which is about 30 basis points up on year-on-year last year. So Minor's core EBITDA margin was up as a result of both hotels and food to 22.8% which is a 60 basis points up year-on-year, reflecting the improvement in the operating leverage and also our cost efficiency, which we have achieved. So the next one -- the next slide is to talk about our strategic partnership, which is helping us to accelerate our growth and global reach of the company. So these are some of the partnership agreements which we signed in Q1. So we continue to get the momentum and highlighting strong market confidence in our brands, both internationally and locally here in Thailand. These partnerships allow us to accelerate our footprint expansion with a minimum capital cost as we are derisking our expansion by leveraging partners and local expertise in terms of capital and also achieving a higher ROIC. For example, the joint venture with Royal Holdings to open 21 properties by 2035 under Anantara, AVANI and Tivoli brands in Japan was also signed in the first quarter. The AVANI Sunray, AVANI plus Sunray Beach resorts in India was also signed in the first quarter because, again, India, we're seeing it as a strong gateway market for us. And we have -- we opened one Anantara last year, and that's gaining some strong momentum and traction in terms of signing more hotels for us in India. Middle East, of course, continues to grow, as we said, AVANI Plus in Fujairah and the NH Collection in the UAE, which is called the Almajan Island in the UAE was also signed again. Now these are all asset-light, what we call management contracts. The Anantara Resorts, the brand in Soma Bay in Egypt also was signed for management contract as well, the first entry for us into Egypt. And then we also continue to expand our portfolio in China. So the Anantara Thousand Island Lakes and in the Clearwater of Sanya Resorts in Qingdao was also signed in Q1. And the latest one, which was signed about a week ago was the rebranding of the Dukes Hotel in Dubai to be a Tivoli Hotel was signed as well. So in Dubai, we are now becoming one of the largest operators in Dubai as well. So this strategic partnership has really helped us to spearhead our growth momentum, which we have always said we -- our target is to get to about 850-plus hotels by 2027. We have a very strong pipeline, which we will elaborate a little bit later. Our fifth franchise property in Australia was also signed in Q1. And here, in the Kingdom of Thailand, we signed the NH Bangkok in Asoke, which again was signed as a management contract also in Q1 as well. Most of the partnerships, as I said, were on the asset-light strategy, which also builds us a solid foundation in terms of our growth pipeline for the next 3 to 5 years. Moving to the next one in terms of some of the strategic highlights. So here, we talk about diversification of our portfolio with resilience to scale. Today, our brands have really gained strong equity momentum in terms of people wanting our brands, not just in Thailand, but also globally. And the brands are growing quite strongly globally as well. The diversification is not just a geographic, but it's a vertical and a business model-based. The model is architected with the understanding of macro volatility, whilst we capture the recovery in leisure and travel industry, including dining for our food group as well. With this momentum, we are certain that we will have a leading business portfolio and the resilience in the marketplace as well, a broader hospitality portfolio covering short and long stay, luxury, upper upscale, upper mid-scale, mid-scale, service suites, residential and vacation clubs. So we cater for all the different segments in the hospitality sector. We are also -- our geographic footprint is also based on stable with minimum exposure in the U.S. today, limited to just one hotel we have in New York, in the New York City. A full spectrum of restaurant offering for every occasion, whether it's hot food, which is our pizzas, our burgers and the Japanese and the Thai food cuisine or our cold chain, which is our desserts, ice cream and bakery and coffee and bubble tea in Thailand and also outside Thailand as well. Our multiple business models are asset-light, asset-heavy and joint ventures. Our strategy has always been what we call asset right, which is a combination of asset-light, asset-heavy and JV. Leading scales in key markets with operational efficiency, agility and certainty to weather all storms we are facing today. The next one is to look at where we call our balanced revenue and business across all the segments of the geography. As you can see, our geographical spread provides a natural hedge against what we call localized downturns as we have seen in our results today. The hotel feeder markets span across all geographies. So Anantara hotels, excluding Europe, Americas, Australia, New Zealand is led by like Europe achieving about 34% of our portfolio. Asia is 22% and with growing contributions coming from the Middle East as well. Minor Hotels, Europe and the Americas have gained a strong momentum from intra-European travelers, which is about 70% of our travel within Minor Hotels, Europe and Americas come within the region, whilst Oaks is driven by domestic demand, both in Australia and New Zealand, which is about 88% is mainly domestic. The segment mix also provides a balance. Hotels in Asia and the Middle East are heavily leisure led due to their resort locations. So we have close to about 90% in resorts. But the hotels in Europe and the Americas offer an equal leisure and business exposure, which is about 51% is business -- sorry, and 51% is leisure and 49% is business. Oaks combines leisure, which is about 70% and business is about 30%, benefiting from the growing need of travelers to blend work and vacation. Minor Food, our food brands benefit from strong local presence and digital monetization. Thailand remains the anchor market at 49%, followed by Singapore and Australia. Our geographic segment diversity helps to mitigate volatility and ensures a consistent demand. So product-wise, our hot food such as pizza, burgers and Thai food accounts for about 42% and our hot chain TPC or Pizza Company, Burger King and Bonchon, Sanook Kitchen and Riverside, for example. In terms of cold food, we have the ice cream, the bakery and the beverage as well as the hot and cold combos, which represent about 50%. Manufacturing also contributes about 8%, which has helped to improve the margin as it's to ensure the increase in sales, both externally and internally as well. The next one is to talk about our confidence in our 3- to 5-year growth outlook. So here, our growth targets are underpinned by a visible pipeline, strong business model and partner-driven expansion. 80% to 90% of our upcoming hotels are secured under asset-light management contracts. So today, in Q1, we are about 562 hotels. Our target is to -- in -- by 2027 is to get to 850 hotels, mostly 80% to 90% coming from asset-light. And then by 2029, to get to about 1,000 hotels, again, mainly driven by asset-light management contracts and franchising as well. We have also moved into franchising as well. which has opened up a new revenue stream for Minor Hotels. In terms of the restaurants, we are at 2,700 restaurants. Our target is to get to about 4,000, again, through asset-light combination. And by 2029, to get to about 4,500 or about 5,000 restaurants by 2029. The significant portion of the restaurant pipeline, again, here is driven by franchising. Development momentum seems -- for us remains very strong. And there's been no signs of slowdown in terms of partners being interested in partnering with Minor. Our scalable model and trusted brands continue to attract new opportunities across key markets, especially with the opportunities we see today. The next slide is to talk about the disciplined growth and our financial targets, the focus. So this pretty much gives you a flavor of some of the bullet points we have. So our financial targets reflect a balance of ambition and prudence. Key focus is to drive profitability growth, which is sustainable and with the most amount of capital efficiency as well. Our 3-year road map remains unchanged. As you can see, high single-digit revenue growth, 15% to 20% CAGR growth on profit, core profit mainly driven by operations efficiency, margins improvement, scalable benefits, including the asset-light business model we have today. We remain focused on delivering an ROIC above 12%, which means a more disciplined capital allocation and asset-light growth strategy. And our net -- our net debt to equity and the net debt-to-EBITDA ratios will remain where we will meet the targets by year-end. And the ratios in Q1 were slightly increased mainly because of the ForEx translation impact we saw. We are confident in maintaining a very healthy capital structure along expansion momentum, which will be mainly driven through asset-light model as well. The next slide is to look at expanding our hotel portfolio with strategic geographic rebalance. So here, targeting more balanced geographic footprint with new openings across high-growth markets, which are mainly Asia, Middle East and Africa and expanding our pipeline aligned with high-growth travel corridors as well, which are underserved in terms of the luxury and the lifestyle segments for Anantara in key global gateway markets and for NH and NH Collection at resort destinations as well. A positive shift in business mix, proportion of the management letting agreements is set to also grow from 34% to 51%. So the management lettings model predominantly works in Australia because it's called MLR. And it's a very strong model where it's predominantly driven by asset-light model as well. The increase in contribution from asset-light contracts will also help to enhance the margins and also our returns as well. The next slide is to focus on our targeted food expansion with the asset-light growth. Our strategic focus on scalable growth through franchising and franchising mix to exceed at least 50% in the coming years, replicating hotel strategy with increased asset-light contribution for higher margin and scalability. Thailand will -- the contribution will come down with increased proportion of other emerging markets such as Indonesia, India, Japan, which would be grouped under others in the chart. A strong brand portfolio and proven operator model will continue to attract our quality franchising partners. The next slide is to talk a little bit more about the strong momentum across the markets, which underpins our confidence in 2025, our hotel targets today. So on the books today, if you look at Minor Hotels, Europe and Americas, the contribution almost is 56% on the books. Thailand, 13%; Maldives, 6%; Middle East and Africa, 15%; and Australasia is 7%. This is the contribution which comes towards our total system sales, which is about THB 40 million (sic) [ THB 40 billion ] . And you see that Europe, selective repositioning initiatives driving ADR uplift, a solid corporate demand, especially in Rome, Vienna and Frankfurt and also the leisure markets in Germany, Madrid and Barcelona will contribute towards the strong momentum we have today. Thailand, our new brand introductions to attract new customer segments, driven by what I call experiential offering like tented camps, which we do today, tree top dining at the Anantara Golden Triangle, which will also help to enhance the guest engagement and the brand appeal as well. Maldives, the expanded rooms and the villa categories tailored to diverse feeder markets such as Middle East and new activities introduced to grow the total spend per guest by families as well. Minor Hotels, Europe and the Americas, we have a strong -- we have strong on the books volume driven by interregional travel, long haul as well as countries from U.K., Germany, Russia improving with the improvement of AR connectivity with further boost in visibility as well. Australia continues to grow. So the brand refresh, we've done a new brand refresh for Australia under Oaks, which will help us to push the corporate events and also the holiday segments to strengthen our base demand. The next slide is to talk about the global master brand, the distribution and loyalty and the discovery, which we did. So Minor's integrated master brand booking platform will enhance the visibility and accessibility across our hotel portfolio. So in the old days, just to recap, we had our hotel brands by brand. So if you want to book Anantara, you go into Anantara. If you want to book NH, you go into NH. If you want to book AVANI, you go into AVANI. But today, what we have done is we have brought all our brands together under the master brand, which is called Minor Hotels. And when you go into the new booking app, which has been launched quite successfully, you will see all our brands listed by country. So as soon as you choose a country, it will list all the brands under that country, which will give the guests a choice and also a diversity as well in terms of brands to book their holiday or their corporate stays with us. So the website has become much more simpler, offering much more choice and also bringing all our brands together as well. So here, you see that the other thing is the loyalty program. So again, the loyalty program has come under one platform. It is called Minor Discovery. So you earn dollars when you stay with us, not points which are complicated like some of the other brands. So we only do -- we earn dollars. And the dollars, you can spend the dollars in hotels, in food and beverage, in spa or any other outlets as well. So the Discovery under Minor Discovery today under Global Hotel Alliance, we have more than 45 brands under the alliance with about over 850 hotels in over 100 countries, which actually gives our guests a choice in terms of booking their holidays or booking their corporate stays with us. The GHA hotels reached an all-time high revenue for us of about $2.7 billion up. The repeated stay revenues totaled about $1.6 billion of that for the alliance. And the cross-brand stay revenue was about USD 370 million, which was a 28% increase from the program before. The GHA also leads the industry with about 214 members per room. So we are one of the highest in terms of the number of members per room compared to the larger brands. So the larger brands has -- let's say, if you take some of the larger brands, they have 8,000 hotels. There are so many million rooms, but then the loyalty members per room is actually lower than us. The Booking.com -- or sorry, the brand.com has increased by almost 200 basis points since we launched Minor master brand as a main brand because now people can see, under one website, all our hotels, all our brands and it's easy to book as well. The next one, we talk about food -- Minor Food portfolio. So here, we have a very diverse portfolio, as you can see, to service every segment, every meal and every budget the customer has. The Pizza Company and the Bonchon introduced what we call solo menus, tailoring for single diners and convenience food focus for customers as well. Both these brands successfully grew their dockets. Bonchon grew by 14%, the docket size, and the Pizza Company grew by 10% in 2025 Q1. Dairy Queen continues to launch premium menus, have broadened their appeal to elevate their brand perception as well, which has been successful over the past 5 years. The average spend is about THB 65.4, THB 65, and today was up by 23% to an average spend to the -- from the average spend of 2020. Burger King expanded the local branded breakfast menu to capture what we call early day traffic and increase the visits and the frequency, resulting in mid-teen growth of 13% in comparable dockets. Our constant launch of new innovations will ensure the relevance across markets, the demographics and the dining occasions as well. Moving on to the next slide, which is to talk a little bit more about cost advantage through scale and optimization. So the cost increase consistently is 50% lower than the market inflation, thanks to the scale and the wide network of suppliers and the proactive sourcing we have been doing. So in spite of some of the cost escalations, we have had a much lower impact on that. The minimal supply chain disruption, even during natural disasters due to our diversified suppliers and our local logistic capabilities, we were able to overcome them as well. Labor cost growth remains below our RevPAR growth. So yes, the labor cost has been growing in most geographies, but we've been -- the growth has been lower compared to how we have been growing our RevPAR, mainly through ADR or average daily room increase or room rate increase as well. We've also finished -- we also continue our back-of-house consolidation and shared services as well for both the hotels and the food, including our head office as well, which again will see some synergies and also cost efficiencies also. We've managed to structure our leases mainly in Europe. As you know, like most of our hotels are under leases. And with approximately now over 70% of our hotels in Europe are based on a variable lease component rather than a fixed lease component. So this has really helped us to actually reduce the exposure in terms of some of our lease -- fixed lease costs as well. The next one is to -- a little bit to talk about the -- our discipline in terms of CapEx and how we plan to strengthen the balance sheet to drive what we call quality growth. So we have reviewed again our CapEx models for the next 3 years, and we've reduced the CapEx spend to THB 7 billion to prioritize early debt repayment and cash flow preservation as well. So I think going forward, our target is to reduce -- our target is to pay down debt close to about THB 8 billion to THB 10 billion a year. The remaining committed CapEx will focus on high return and driving top line. So CapEx will be more focused on giving us a better ROIC and a better return to continue for us to invest in capital expenditure as well. So some of the capital expenditure where we will focus is mainly on hotel renovations and the upgrades to lift our ADR. So one of the -- some of the big CapEx contributions or projects we have, for example, is going to be -- one is going to be this hotel here, which is one of the most iconic hotels in Bangkok. We will start to renovate this hotel in June this year, but we will not close, but we will do half the hotel, but really uplift the hotel, the rooms, the facilities, the conference centers and everything. And then next year, we will complete the other half, which will really help us to position Anantara Siam as one of our flagship hotels in Thailand as well. In addition to that, we also have CapEx in some of our other hotels like Riverside, Anantara Riverside, we're planning to upgrade as well. Anantara Mai Khao in Phuket, which has been very strong post -- we have seen the rates increasing by 20% to 30% there because of the White Lotus impact. Again, there, we will invest some CapEx to uplift the product, which will give us a much higher ADR and command a leading position in the market as well. So -- and on some of the other projects, we will start to rationalize CapEx to make sure that we are focusing more on preserving capital and also repaying debt in the coming years. The next slide is to, again, to elaborate a little bit more about our healthy capital restructure and also our funding and the income streams as well. The interest expenses has declined by 16% year-on-year in quarter 1 2025, reflecting the lower outstanding debt and better fundraising costs and terms. Our debt profile is diverse and it's actively managed and it's positioned more towards favorable cost structures. Further debt reduction is planned in quarter 2 of this year, which will further strengthen our balance sheet and reduce our financial risk as well. So as we go along this year, so last year, we did some debt reductions, this year, we're doing. And Q2, again, the biggest debt reduction we will do is in Europe, and we will reduce the debt by about EUR 200 million there. Then we look at a fixed rate of debt proportion to -- which will also set to decline, which will align with our falling interest rates, so which again will better -- give us a better net profit as well as the interest cost starts to come down due to the debt reduction program we have in place. The leverage will improve. So our net interest-bearing debt to equity is tracking towards 0.75. Our target is to bring it below 0.7. Our net debt-to-EBITDA is expected to decline to 4 by end of this year. Again, our target is to bring it to just under 3 or just around 3 in the coming years as well. So -- and the next one we look at is cash flow. So strong operating cash flow is enough today based on our debt reduction, based on our CapEx restructure, based on our earnings to meet all our financial commitments, including debt repayment, interest and lease obligations as well as paying dividends to our shareholders as well. The CapEx has been trimmed to preserve cash and to enhance flexibility. And we will prioritize use of cash directed towards more into accelerating our debt repayment as well. The next one is we talk about the improving credit ratings, which has led to a lower cost of capital. So in spite of all the turbulence we see today in the marketplace or geographically or globally today, we have here in Thailand, for Minor International, we've managed to upgrade our TRIS rating from A to A+. In Minor Hotels Europe and Americas, we managed to get the company rating and the outlook from stable to positive, which has actually resulted in us securing debt at a much lower rate. Again, we will talk a little bit more about the bonds, which we issued recently as well. So these upgrades has reinforced investor confidence and support also lower cost of capital funding going forward for us. The Minor Hotels Europe and Americas Fitch rating upgraded its stand-alone rating profile to BB and revised the outlook to positive, which is citing a continued recovery in operations and improved financial discipline for us in Europe as well. So these ratings have enhanced accessibility for sources of new funds and also helped us in -- especially in what we call the volatile market today with the interest rates moving upwards. The next one is about the balance growth with meaningful progress in sustainability journey. So here, ESG leadership is a competitive differentiator for Minor and the capital markets, it's imperative as well for us to ensure that we are leading on ESG. So at Minor, sustainability is integrated into our DNA and our growth strategy with progress across what we call people, planet and corporate governance. The people potential, we have -- we are certified as Great Place to Work for the second year running globally. 57% of our MCU graduates join our workforce, empowering the next generation of talent and hospitality leaders. 450,000 individuals are supported through our CSR and community initiatives as well. And what we call natural capital. In 2024, Minor Hotels reduced its GHG emissions by 3.5%, continuing year-on-year momentum and achieved an 81% reduction in single-use plastics versus the 2018 as a baseline. Responsible business. For the 12th consecutive year, we have been awarded excellent CG scoring, which again reflects the culture of Minor International as a company, focusing on corporate governance. The ESG leadership recognized with MSCI AA rating inclusion in the FTSE4Good Index and also the S&P Global Sustainability Yearbook for 2025. These are very strong accolades, which we have received in terms of driving sustainability for the group. Our recent THB 8 billion sustainability-linked bond was 5x oversubscribed, which demonstrates investor confidence and also our commitment for ESG as well. And the cost before anyone asks, like I'll tell you the cost as well. So for -- we did a 3-year, 7-year and a 10-year bond. The 3 years was about 2.17%, which is the lowest ever. The 7 years was 2.85% and the 10 years was 3.15%, which is one of the lowest we have seen today. The next slide is to show a little bit more about the performance recap for 2025. So I think this one, most of you have seen and read our results and also the press release as well. At constant ForEx, the revenues actually grew on a constant ForEx basis by 3% year-on-year, reflecting a strong operating momentum. On the bottom line, the net profit reached THB 50 billion, which is a 114% year-on-year improvement despite Q1 being the lower seasonality for Europe. So including core items, reported net profit came in at THB 417 million. though down year-on-year to a higher base with a core gain of -- in Q1 2024. Because our core items last year, there were more on the core items were like onetime. We always focus on core. Last year, we had some noncore items, which actually helped last year the numbers a bit high. But for us, as we always focus on core, our core this year has increased quite strongly from a loss to a profit. The next slide also talks a little bit more about the hotel performance. So when you look at the hotel performance, the RevPAR growth across key leisure markets, here, you can see Europe and the Americas grew 8% year-on-year. Thailand was up by 10%. Maldives was up by 18% year-on-year. So again, a strong growth. And our management letting rights business in Australia was a little bit soft because of the seasonality and Easter period as well, but we see Q3 and Q4 strong on the books in Australia. The hotel net profit improved by 39% year-on-year, driven by revenue mix and better cost efficiency. Our net margin improved from negative 3.3% to negative 2.1%, which is a step forward towards a strong seasonality recovery as well. The next slide is to talk a little bit more about the food. So Q1, the core revenues were flat, but it was 2% up year-on-year on a constant ForEx basis, which shows a steady top line resilience. In Thailand, the total system sales grew by 1.8%, whilst the same-store sales declined slightly by 1.3%, impacted by some of the delays we had in our marketing campaigns, which was mainly driven by unexpectedly cold weather in Thailand. So say, for example, some of our ice cream, the new initiatives and the new promotions, we had to delay them because it was a little bit cold in Q1. But Q2, it looks -- we are -- we've launched it and the momentum is strong. The international performance improved year-on-year despite still negative growth from macro factors in China and in Australia, but the decline is narrowing from our previous quarters. The core net profit grew by 5% year-on-year and 6% on a constant ForEx basis, with a margin improvement to 8%, driven by leading on the cost structure and also improved contributions through our value chain as well. So on this, that concludes the quick summary and the presentation for Q1. And happy to open the stage for any Q&As. Happy to take any Q&A.

So anyone have questions, please raise your hands and see where you're from and then ask a question.

This is [ Qasim ] from CGSI. May I ask for the first quarter performance, if you look at the core profit for the hotels, excluding the FX, would it improve year-on-year?

Yes. Yes, the core net profits improved year-on-year.

For the hotel alone?

For the hotels, yes.

And as you have been preparing for the potential impact of the global slowdown on the back of U.S. tariff by rationalizing the CapEx, may I ask what is your estimates on the impact on the top line for the hotels and for the food?

So based on the trend we have today, when the tariffs were introduced, there was a little bit of global volatility across the world, as we know. So our Q1 came very strong, as you saw in our numbers. For the first time ever, like Europe turned around into a profit situation. And for us, the tariff -- even though the tariffs are of concern, like last year, we had interest rates as a concern. We had inflation as a concern. In spite of that, the travel and tourism numbers actually grew. So -- and based on what we see in our books for Q3 and Q4, our -- what we have on our books is quite strong. Q2 might be a little bit soft, but I think Q3 and Q4 will be strong. And for us, don't forget, for Minor International, Q1 and Q4 is our peak quarters. So we had a strong Q1. We believe in a strong Q4 as well. And for Europe, Q2 and Q3 is their strongest quarters as well. And again, based on what they have on their books today, it's -- we have no concerns at the moment.

And how about on the food side?

So on the food side, Thailand is doing well. We do -- we have a bit of softness in China, but China is improving as we see because we're also introducing some new concepts into China. So that will help us to further increase our top line in China and diversify a little bit more into the franchising also in China. And Australia has also been a little bit soft. But again, Australia, we have done a lot in the last 1 year in terms of brand revitalization, spending CapEx, improving some of our sites, new food concepts. And we see that we are seeing some improvement, and we see that, that will continue into Q3 and Q4 as well.

And may I ask one more question? Which particular regions do you see which would be the most challenging for the 2025 and '26?

I think most regions are starting to be challenging, right? There is some concern in every single region. Like of course, Thailand, we see the softness in the market. We see Chinese travelers have reduced. In Europe, we see because of the issues they have, there is some concern about the European travel slowing down. U.S. coming into outside U.S. bound is slowing because the dollar is getting weaker. But in our case, we have been able to -- like what we did in Q1 and like what we did last year, last year was much more challenging for us last year. The last 2 years has been more challenging in terms of inflation increases, in terms of labor cost increase, everything. But we managed to navigate through. And last year was one of our record years or it was the record year last year. And we hope this year will be better than last year as well based on the strategies we are doing. So we are not focused just on one market. We diversify pretty quick. So when Thailand started to soften, we moved into other markets like India, like Russia and other places has really -- has helped us to fill the gap of how we've suffered in China. In Europe, we've adopted the same strategies as well, driving both urban corporate and leisure travel as well through some of our strategies, which we have put in place. Middle East is very strong today. Middle East, if you go to Dubai, Dubai is doing very strong. Dubai, Abu Dhabi, Qatar is doing really strong because they've opened the markets for everyone, and they've done really well. In spite of the rates being high, people are moving to the Middle East.

Sukrit from UBS. So I have a couple of questions. I just wanted to start off following up on [ Qasim's ] question on the outlook. I understand that order book looks strong, but could we get a sense of the RevPAR driver in the upcoming quarters, given that over the past 2 years, it always has been room rates being the key driver, right? But if we see RevPAR still growing but occupancy shift could you see a risk to your margins going into the next couple of quarters? Is that something we are seeing? That's the first question.

Okay. So I think we have to address it by market, by geography. So if I look at Q1, for example, Thailand, our focus is to grow ADR because it's a high season because then the occupancy always comes in. Then when we go into Q2 and Q3, it's all about driving occupancy to drive that RevPAR, right, and to make sure that during the low season, we come out quite strong. And then we move at Q4, we again look at driving ADR for Q4 for Asia, which includes Thailand, Cambodia, Vietnam, Maldives, everyone because Q1 and Q4 is our peak quarters. Now if we move into Europe, so Europe, we drive occupancy in Q1. We drive rate in Q2 and Q3, and then we drive occupancy again in Q4. And that's how we've managed to increase our RevPAR throughout the sector.

So is it fair to say that your full year guidance is based on both, not a shift in material change between the 2 drivers, right? So it's just a bit of both driving that. So we shouldn't see any risk towards the margins or the cost side trying to acquire more of these customers in, even though the global economy or the concern on global tourism might be there.

There is some risk. Let's say, if you look at Q2, right, we have to drive occupancy. And if the global markets are a little bit jittery as to what we are seeing today because no one knows like one time there is tariffs, one time there is no tariffs. On time there is tariffs, one time there's no tariffs. So they are a little bit -- so we have to manage it to make sure that we are driving that occupancy as well. So I think we cannot rule out to say it will be all nice and smooth in terms of the thing. But all we are doing is to make sure that we navigate through some of these headwinds carefully, and we do it almost on a weekly basis because you have to shift your strategies by country every week to make sure that we stay above the -- we're floating above everyone else.

So the second question is mainly focused on Europe. We see that the split is still 50-50 between leisure and business. But what we start to see in Thailand at least to -- according to other hotel chains, the business demand dropping off a bit given that there are budget cuts with the global concerns and so on. So how -- what are the drivers of Europe today? Are there a difference between the leisure and business? And are the profitability profile of the Europe business changing materially for the rest of the year?

Actually, it's the opposite for us in Europe. Our -- the urban or corporate business has increased in Europe. And the leisure has slightly reduced because in Europe, last year, if you tried to book during the summer period, the rates were very high. So people were avoiding the peak, peak season of Europe, and they were traveling during the other 2 seasons for leisure. But the corporate travel has always been quite strong for us in Europe. And actually, like we see corporate travel increasing for us in Europe. In Australia, it's the same thing. Last year, our leisure was very strong and corporate was soft because of interest rates really high in Australia and people cutting back and all those things. This year, it's gone the reverse. The corporate travel has gone up and the leisure has softened a little bit. But what we have to do is we have to make sure that we combine corporate and leisure together to drive that demand during weekdays and weekends as well. So now what we do is we promote -- like you can go and on your corporate travel stay in one of our hotels. And then the weekend, you spend with your family, leisure at the same hotel as well. So we bundle it together to give -- to make it more attractive and to make sure that we get those stays as well.

And my last question is, could we get an update on the REITs? What are the hurdles today? Is there any update that you can give as of now?

Yes. So the REIT is -- again, we are navigating the REIT carefully because we've done a lot of work on the REIT. We started the REIT last year in terms of planning for the REIT. We are at the juncture in terms of whether we list the REIT in Thailand or whether we list the REIT in Singapore. The strategy or the plan is still the same. I think we've not come off that, like the REIT size of $1.5 billion, which will release us about $750 million in cash, which we'll use to -- which will go to repay debt and use for expansion and growth as well. So our -- we remain focused on the strategy. The timing might be a little bit back or forth, I think, based on the volatility in the marketplace because we want to make sure that when we launch the REIT, it's successful as well. So we're quite careful. We don't want the REIT to fail because it's quite a big REIT for us in Thailand, and we need to make sure that the strategies are there. So it will be a full -- a complete success for us. It's a bit like when we did the bond a few weeks ago, we were 5x oversubscribed. And we got -- in spite of what was happening in the marketplace, the interest rates were quite suppressed as well.

I'm [ Gail ] from Bualuang. Just on this page, for Thailand, we see single to mid-digit growth. But actually, I have seen that you mentioned on the country RevPAR has like growing a lot. Is that because of the Anantara Siam going to be like renovating in the second half of this year? Or anything that why the RevPAR growth guideline would be only like mid-single digit?

Yes. So I think that's a great question. So as I said before, we have Anantara Siam will start to renovate in June. We have Anantara Huhin, which is going through renovation. We have Anantara Mai Khao also under renovation. Anantara Riverside under -- will go into renovation. Anantara Layan will go into renovation. So we -- in Thailand, most Anantaras will go through renovation this year. But during the low season, right? So what we have on our books, of course, that impacts us because we need to make sure that we cannot take bookings for more than the rooms we have. But what's driving also the growth is like Samui and Phuket, the other hotels are still driving growth as well for us. Now don't forget like in most countries, the pace or the booking has become last minute. So in the old days, 6 months before, you will see a strong pickup and then the pickup will start to reduce as we approached the month. Now it's the other way. The pickup or the pace is low. And then when you get closer and closer, the pickup increases, mainly because of people wanting to know what's happening in the marketplace. Like a few weeks ago, as we all know, when we saw the India and the Pakistan, the clash, for about 2, 3 days, our pace dropped, but then it just picked up again. So I think it's also the volatility as well. We see like as soon as there is some announcement or some news, you see a short-term drop. But then in the long term, it always picks up. So we are not -- Thailand has been quite strong for us. And as I said, we announced a double-digit growth in Thailand. And we will continue to see that growth coming through. This is in spite of the Chinese not yet traveling in full force. But once we start to see that, then the momentum will increase quite strongly.

So basically, we expect to see the RevPAR increase after the renovation completed?

Yes, for sure.

So like how much we could expect like -- can you give us some like numbers?

I think again, it's by property. It will be by property. For here, I would hope we will see at least a double-digit RevPAR growth here. For Phuket it will be slightly higher because, of course, it's a more leisure property. So we will see a higher RevPAR growth. And as I said before, we have now started to streamline our CapEx, and we are only spending monies where we see high double-digit RevPAR growth because otherwise, we will tighten our CapEx to focus on paying down debt.

Okay. And for the Maldives as well, given the double-digit growth seem to be really high one compared to peers that we have seen, can you share any strategy, any point or things that you have been done with the Maldives portfolio to seem like perform -- outperform the peers?

Yes. So in the Maldives today, we have 9 hotels. So we own -- we have a very strong marketplace or positioning in the Maldives. And we work very closely with some of the big agents or tour operators, which actually bring business into the Maldives. And the other thing which is driving is the new -- our master brand in terms of the master brand has also helped us to drive more business into the Maldives. But don't forget, in the Maldives, Anantara is seen as a top 10 ultra-luxury brand. And we don't see that much of resistance or drop in terms of the demand or the rate for us in the Maldives. We continue to increase our rates, and we continue to increase our occupancies there because of the brand is so strong. And today, in the Maldives, we have Anantaras, we have AVANIs, we have NH and we have NH Collection. Therefore, we can offer our guests rates at 4 different price points. And therefore, the guests don't have to go to another hotel to stay. So we will capture those guests within the Maldives.

So will we consider to add the like more hotels, managed hotel in this portfolio...

In the Maldives?

Yes, Maldives portfolio.

I think if we see a brand fit, I'm sure there is space for us, but we cannot cannibalize the brand. So we're quite careful in terms of making sure that there is a brand fit, the location also fits the brand as well before we take on any hotels.

My last question is about the capital structure. After we finished the reduction of -- I mean, repayment of the debt, would it be changed in the picture on Page 20 in terms of the floating and fixed mix and also the currency mix in this one? Will it be, I mean, a significant change after we manage the debt repayment?

So there is 2 things. One is the fixed rate and the floating rate. So we're always looking at how we balance the fixed and the floating rate in terms of our total debt structure. Again, based on interest rates, sometimes we would rather fix it. Sometimes we float it wherever we have a better advantage on the rate structure in terms of where we are. And then if you look at the -- sorry, that's on the fixed and floating rate, right? You want to know.

Yes. And also the mix of the currency.

So the mix of the currency, we always believe in natural hedge. So for example, like in Europe now, we -- in July, we reduced our debt by about EUR 200 million, where we are refinancing the bond that will get reduced. So we do the matching hedge. So of course, Europe will be -- by currency, it will be the highest because our debt towards Europe is quite high because the number of hotels we -- when we acquired NH and the number of hotels we have in Europe is quite high. But as we move more into asset-light strategy, we see -- we will see that -- and we are moving more towards paying down debt. We will see this capital structure or the stack becoming much more stronger than where we are today. We have -- we continue to increase -- we continue to make our capital stack stronger as we start to reduce debt. In December, we reduced debt by about $130 million, $140 million. And then in Jan, again, we reduced debt by doing some asset recycling. And then in July, we will do the bond paying down and reducing by $200 million. And then next year, if you do the REIT, that will further reduce our debt as well.

You also have the debt maturity next year, if I'm not wrong?

Yes. So that's the one which we are refinancing. So we have the bond maturing and we have the loan maturing. So that's been refinanced.

So that's why the mix of the currency will be quite the same, but the amount will be lower.

Amount will be lower, yes, yes. So if there is no more questions, I'd like to thank you all for attending today's presentation. And our team is here. So any questions you may have, our IR team is here, our strategy team is here. So they'll be able to answer as well. So thank you all for coming, and have a good day. Thank you.