Asia’s hospitality king: Minor Hotels CEO William Heinecke

The billionaire chairman and CEO of Minor International reveals the firm’s Gulf expansion plans and explains why recent consolidation in the industry may not be a good thing



What made you want to get into the hotel industry, following your previous success in advertising and other areas?

“When I was 17 I worked as an advertising manager for a local newspaper while I was still studying. I convinced the editor to run a feature on go-karting, which I introduced to Thailand, and he agreed if I managed to sell advertising.

“I have always believed in making diverse investments. When I graduated in 1967 I borrowed $1,200 to register my first two companies under the name Minor Holdings – office-cleaning services and a radio advertising company.

“Fast forward 50 years and Minor International now owns and operates multiple companies focused on three primary businesses including restaurants, hotels and lifestyle brands with a market cap of $5.3bn.

“My first hotel venture was in 1978 when I bought the Royal Garden Resort in Pattaya. My initial plan was to sell it to another investor, but when the deal fell through I realised I was hooked and the hospitality industry quickly became my passion.

“One of my proudest achievements so far has been creating our first home-grown brand, Anantara, which is celebrating its 15th anniversary this year. We saw a gap in the market for resorts in exotic destinations offering authentic experiences. Although everyone talks about experiences these days, I am proud that we were the pioneers of this development in the hospitality industry.

“Having our own brand, as well as managing hotels under international brands, also meant that we could grow more quickly with the support of investment partners, bringing our management and design expertise to the table and opening up new destinations. To this day, I still get a real thrill out of creating amazing experiences for our guests.”

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You recently announced the Avani brand would be making its Dubai debut, taking over the Mövenpick Deira, is this a sign the company is focusing on more mid scale properties in the Middle East?

“Avani Deira Dubai Hotel, owned by Bin Sulayem Investments, is our first Avani in the Middle East but we plan to grow this brand relatively quickly as we believe there is a gap in the market for this kind of contemporary, upscale hotel.

“As part of our strategic partnership with Nakheel we have several irons in the fire — we recently signed a letter of intent with Nakheel for a property at Ibn Battuta Mall. In partnership with Dhabi Contracting, Avani Jebel Dhanna will soon begin development in Abu Dhabi alongside Anantara Jebel Dhanna and both resorts are scheduled to open in 2018.

“We already operate two properties under another of our brands – Oaks – in the UAE, which offers affordable apartment accommodation for both long and short stays – we plan to introduce the Oaks brand to other GCC countries within the next 12 months.

“The GCC remains a key area of strategic focus for us and we will continue to explore opportunities to grow our portfolio across the region.”

Can we expect to see any of your other brands not yet present in the region?

“In February this year we announced our acquisition of Tivoli Hotels and Resorts, a Portugal-based brand with 14 properties across Portugal and Brazil. The acquisition, which totalled EUR294.2m ($327.3m) and was the biggest transaction of its kind within the hospitality industry in Portugal, marked our strategic entry into Europe and Latin America.

“We are planning to make it a truly global brand and will be making an announcement about the first Tivoli property to open in the Middle East by the end of this year. Meanwhile, the next Per Aquum resort – our luxury boutique brand – will be in Zanzibar. It will be a sister resort to Desert Palm Per Aquum in Dubai, and we are also looking at opportunities to grow the brand in the Middle East.”

Will Anantara remain your flagship brand here?

“Our strategy is to build a diverse portfolio of brands to cater to different segments, so we will have a number of flagship properties operating under our different brands rather than one flagship brand.

“We do have a number of Anantara resorts in the pipeline in the Middle East and we are planning to open more city hotels over the next few years, as well as in more unique locations. Two upcoming openings of note include the two Anantara Resorts in Oman – Anantara Al Jabal Al Akhdar, the highest five-star luxury resort in the Middle East at 2,000 metres above sea level, and Al Baleed Resort Salalah by Anantara, which will offer the first pool villas in the area. Both are scheduled to open in the fourth quarter of this year.

“We have a number of resorts slated to open in 2018 in the GCC, including across the UAE, Bahrain and Qatar, which is home to flagship property Banana Island Resort Doha by Anantara and where further announcements will be made as soon as agreements with local partners have been finalised.”

Your other businesses include F&B, residential property, shopping plazas and retail. Do you have any plans to expand these in the Middle East?

“Minor Food Group already has a presence in the Middle East – in Saudi Arabia, the UAE, Bahrain, and Oman with 27 outlets under The Pizza Company, Ribs and Rump and The Coffee Club brands.

“We will continue to expand our food business by increasing the number of outlets operated under these brands. We are also actively exploring opportunities to introduce the other brands in our portfolio to these markets. In addition, we are exploring opportunities to franchise our food brands in new markets in the region.

“Although we are always looking for opportunities to establish residential property developments wherever we have our hotel presence, we currently have no plans in the Middle East. There has been a lot of interest in our residential properties at Anantara Layan in Phuket from the Middle East market – one of the residences has already been acquired by an investor from the region.”

Looking at Dubai in particular do you see average room rates and occupancy being hit by the pipeline of new room supply on the horizon?

“We would not be building our portfolio in the UAE if we did not believe that the growth is sustainable.

“We view Dubai as a key part of our growth strategy for several reasons. It offers a good base to develop our world-class brands across various segments, particularly because we can target both the business and leisure segments. Investment opportunities are also increasing so this is something we are interested in exploring, as well as management contracts.”

How do you see recent consolidation deals – particularly between Marriott and Starwood, and AccorHotels and FRHI – impacting the wider hotel industry and your own operations?

“My first question is, what’s in this for the customer? What one gains in scale one loses in agility and the ability to take care of the most important element of the business – the guest.

“I think it offers a certain opportunity to small and medium sized operators who still have the ability to react quickly; who are not weighed down with layers of bureaucracy and rigid guidelines. In addition, smaller operators are more in-tune with guest, staff and owner/investor requirements and can react to their ever-evolving needs. This should most certainly not be underestimated.

“I have read a lot about the recent acquisitions and there are many references to scale, cost-savings, competitiveness, but what about the customer? What’s in it for the guest? I can imagine that the loyalty programme offering will be more all-encompassing, but will the actual experience in each and every property across the globe be enhanced because of these titans coming together? I truly doubt it.

“Secondly, I believe that such incredible scale ultimately leads to a more formulaic and rigid experience. With so many brands and so many hotels it is virtually impossible to be truly focused on creating a personalised experience. This is something that is valued by guests and I believe that ‘mega-brands’ will struggle to really have their finger on the pulse of the guest experience. In addition to this, guests often prefer to be part of a smaller curated brand rather than a huge global machine.

“Thirdly, I’m not convinced these mega brands are in the interest of owners. There is certainly an argument for economies of scale, but owners will become very small fish in a very big pond. In addition, they will compete with hotels/brands within the company. I really can’t see how an owner’s interests will be best met with such a scenario. Nobody wants their business to be just another cog in the wheel.”

What is your stance on online booking and review sites? Have they helped or hindered the industry?

“Online review sites have helped bring a very high level of transparency and accountability to the hospitality industry and this benefits guests. We are now looking at how we turn reputation into revenue, as well as using feedback to enhance the guest experience, by using next generation guest intelligence.

“We don’t just rely on third party review sites though – we have a very robust guest feedback system in place, including our own mystery guest programme, real time reviews and post-stay guest satisfaction surveys. We also have ways of measuring the emotional connection our team members have with guests which is really important in terms of the overall hotel experience.

“Online Travel Agencies are our valued partners and obviously now they are combining reviews with bookings so everything is integrated. We are particularly interested in the apps that some of the OTAs have developed to enable real time feedback from guests from the point of check-in – we are also exploring ways to integrate our customer relationship management systems to build direct relationships with these guests.”

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How is Minor keeping pace with new technologies and what do you see being the future of the hotel industry?

“We are investing heavily in new technology as part of our five year strategic plan. We are investing in a new content management system programme and new websites for all our brands, as well as using business intelligence more effectively to better service our guests based on their needs and preferences. As we all know, mobile is the future and all our websites are now fully optimised, but we are also building more dedicated resources for the travel trade – including digital platforms, educational programmes and accreditation and real time support.

“Technology allows for more personalisation and helps us to know and understand our customers better. However, technology can never replace people and they are the heart and soul of our business. It is really our people who help to deliver personalised experiences – however good the technology is.”

You have in many ways defined the expat business success story, what advice would you give to those looking to start-up in a foreign country?

“Usually there are more opportunities in developing economies. Countries like the US are very competitive. Thailand’s economy is very advanced now compared to when I started out in the 1960s but there are still certain places where I think a young entrepreneur could get started like I did with a limited amount of capital – perhaps Africa, Vietnam, parts of China and maybe Indonesia – even in developed economies like Japan where there has been a change of government and a change in the economic situation. It is all about being opportunistic.

“For example, we were not planning to go into Australia as we had always had concerns about labour costs. Then the opportunity came along to acquire Oaks – a brand we are now growing worldwide.

“Whether you’re starting a restaurant, an office-cleaning company or a hotel, the key is to start small. Set small, measurable, and achievable goals and when you’ve achieved those go to the next step. Risk taking is all part of doing business. Above all else, you have got to be passionate about what you do.”

Finally, after several decades in the business are there any plans to retire and put your feet up?

“I have no plans to retire. When you work for passion and not for money or prestige, it does not feel like a job so retiring is not part of my game plan. When I stop learning and when all our businesses are sustainable, I will retire.

“At the moment I am focusing on building long term sustainability for all our businesses – for the sake of all our stakeholders. We employ 45,000 people and we always say for every one employee we affect 10 lives, so I take this responsibility very seriously, not to mention our responsibility towards our shareholders and owners.”