Tycoon Running 500 Hotels Says Virus Crisis Is Worst He’s Seen
It’s a depression, not economic recession, Bill Heinecke says. Shares in his firm Minor International are down 42% this year.
Bill Heinecke thought he’d seen it all in a decades-long career running hotels: the Asian and global financial crises, SARS, and military coups in his adopted home, Thailand. But the current pandemic tops all that, he says.
Minor International Pcl, the hospitality group the tycoon founded in Bangkok, has furloughed thousands of workers and temporarily closed a majority of its more than 530 properties in the Asia Pacific, the Middle East, Africa, Europe and the Americas. Some of the few still open have been re-purposed as hospitals.
“This is not an economic recession, it’s a depression,” 70-year-old Heinecke, who was born in the U.S. but became a Thai citizen, said in an interview. “The travel industry will definitely be changed after this, but it won’t go away.”
Heinecke said the coronavirus crisis is going to transform hospitality as hotels come under more scrutiny for hygiene and health standards, raising costs to deliver cleaner rooms, beds and food. That echoes comments from the likes of Arne Sorenson, chief executive officer of Marriott International Inc., as the industry grapples with how to restart once lockdowns and travel curbs end.
The U.S. Travel Association — which represents airlines, other transportation companies, local attractions and tourism bureaus — estimates that lost revenue could approach $520 billion by the end of the year.
Once the pandemic abates, domestic tourism is expected to recover before international travel, Heinecke said in the April 23 interview. Countries such as China and South Korea are more likely to see a rebound before Europe and the U.S., as confirmed daily cases fall in Asia, he said.
“There’s going to be quite a lot of pent-up demand for travel when this is over,” Heinecke said, adding operations in China are already showing early signs of a revival.
When demand bounces back, customers will opt for brands that can take necessary health, food and safety precautions, he said, adding they may shun private apartments or personal online accommodation listings.
Heinecke’s business spans hotels as well as casual dining and quick-service restaurants. Its hotel brands include the luxury Anantara resorts and the upmarket Avani. The company also operates other brands, such as some Four Seasons properties.
Heinecke has said the acquisition of NH Hotel Group in 2018 for 2.3 billion euros ($2.5 billion) transformed Minor International into a truly global hospitality company. This year the firm has suspended all significant investment to preserve cash.
Heinecke gave up his U.S. passport in the 1990s to become a Thai citizen. He and his family own 33% of Minor International, which reported net income of 10.7 billion baht ($330 million) in 2019.
– Bloomberg