Bullish Minor International chairman seeks further expansion in the U.S.

Bill Heinecke, the chairman of Minor International and hotel industry trailblazer in Asia, is bullish on the future of hospitality—in a major way.

He said the group is continuing to expand both in geography and in product suite.

Minor completed its takeover of Spain’s NH Hotel Group just before the pandemic hit in 2018, paying €2.3 billion to add 380 hotels to its portfolio. The group now owns or operates more than 550 hotels with more than 75,000 rooms in 56 countries.

The timing of the NH acquisition may have looked unfortunate as the world started to shut down, but the addition of assets in Europe and South America has served the group well.

“Europe and South America came back quicker than Asia and that’s where we have the bulk of our assets since we brought NH under the Minor Hotels umbrella,” Heinecke told HOTELS this week.

He said that Asia is coming back strong as the region emerges from COVID lockdown. “The fourth quarter is going to surprise everyone because the headline numbers I’m starting to see for Asia—particularly Thailand, but to a lesser degree Malaysia and Sri Lanka—are much better than 2019.”

“There is a bit of a change, but the tourism industry is still very buoyant,” he said. “I’m not too worried about the next 24 months. Pent-up demand is going to act as a cushion.” ⁠— Bill Heinecke, chairman of Minor International

Minor International’s third-quarter profit of 4.6 billion Thai baht (USD$133 million) exceeded pre-pandemic levels, driven in large part by RevPAR which was 21% higher than 2019 levels and—combined with some asset sales—allowed the company to strengthen its balance sheet by reducing its debt-to-equity ratio from 1.36 at the end of 2021 to 1.19 at the end of September this year.

Heinecke did acknowledge that the hotel industry is facing significant challenges. “The days of cheap money, cheap labor and cheap energy are all gone,” he said, though adding that many of the apparent problems have a silver lining.

“The cost of travel is so high now that people tend to stay a bit longer,” he said. “We’ve got heavier bookings than we’ve ever had—starting earlier and ending later.” He cited bookings at Minor’s Thai hotels, where the peak season would normally be a tight week over New Year but has now been extended from before Christmas to mid-January.

Similarly, although the rise of virtual meetings during COVID has curbed business travel, it has encouraged leisure travelers to stay away longer and work remotely from their holiday destinations.

“Everyone was worried that Zoom was going to change the way we do business, but I think it’s exactly the opposite,” he said. “Even I’m going on longer trips and using Zoom to communicate with my head office and my family, and I’m staying away longer because I can use Zoom.”

He said the biggest challenge, particularly in Asia, is a lack of airline capacity to bring in guests.

“Flights are absolutely packed. If you don’t have a booking now, you can’t make a reservation to come to Asia or Thailand because there are just not enough flights coming in,” he said.

MJets, the private charter operation that Minor started in 2007, is trying to buy a Gulfstream 550 to satisfy some of the top-end demand, but Heinecke says prices have gone up 30% in the last year.

No Minor Commitment

Minor has 55 hotels in the pipeline, including expanding the footprint of core brands like Anantara in Europe and elsewhere. The Anantara Plaza re-opens in Nice, France, this week after a four-year renovation and the group’s other brands, including Avani, NH Collection and Tivoli, are all bringing new capacity on stream soon. Looking forward, Heinecke said Minor wants to increase its presence in the U.S., where it currently only has one hotel, the NH Collection New York Madison Avenue, and Japan.

In the meantime, Minor, named so because Heinecke was just 17 years old and still legally a minor when he set the company up in 1967, is investing heavily in satisfying the demand for wellness travel and sustainability.

Anantara Plaza in Nice

“Today, when people go away, they want to return from their trip looking and feeling better,” he says. “Every hotel generally has a pampering spa: we’re talking about places where you can go and really accomplish something when you’re traveling.”

Minor has moved from spas to clinics, partnering with Thailand-based BDMS to offer health check-ups, anti-aging therapy and three-night detoxes at its Anantara Riverside hotel in Bangkok, and Vivid, an I/V clinic in the Anantara Siam.

“We’re experimenting with a number of wellness facilities to see what works best. We’ve got 550 hotels and there is such a huge investment, it becomes a question of what else we can do,” he said.

Minor was ahead of the curve in adopting sustainability as a core value and has been publishing annual sustainability reports since 2009. Heinecke said that it is not just guests who are examining the hotels’ environmental footprint. It is increasingly a make-or-break issue for potential recruits and investors.

“People are much more aware of sustainability than they were,” he said. “They want to know what you’re doing, and they will investigate it much more critically than they used to I don’t think you can greenwash many people just by saying ‘we’re not going to change your linen for three days.’”

Heinecke might sound Pollyannish, but he does understand and acknowledge the challenges and risks.

“There is a bit of a change, but the tourism industry is still very buoyant,” he said. “I’m not too worried about the next 24 months. Pent-up demand is going to act as a cushion.”