Bangkok-based Minor International might be slowing down its hotel development plans, but founder and Chairman Bill Heinecke says nothing is fully on hold, especially in Asia Pacific markets. He is using the COVID-19-related pause to renovate properties and train staff to get products and people ready for the return of business. But exactly when that business returns, he said in yesterday’s Q&A, depends on the market and how quickly a remedy to the virus is found.
In the second of a two-part interview (read part one here) from an early April Zoom interview, Heinecke, whose company is responsible for 540 hotels across 55 countries with brands like Anantara and NH Hotels, answers questions about expansion plans, brand standards, robotics and the industry’s dependency on OTAs.
Q: Prior to the pandemic, Minor was relatively aggressive on the expansion front. Are these plans currently on hold? Why or why not?
Bill Heinecke: I’d like to say that there’s nothing really on hold. Some things have slowed down a bit because we can’t get people to do certain things. But, basically, we acquired the Boscolo hotels and we’re going to go full blast as we recover from the pandemic in Europe and look at rebranding some of those to be NH Collections, and some will become Anantaras from that beautiful 5-star collection. Also, we’re so busy building Avanis. There’s a lot of renovation going on. I think everybody’s taking the opportunity, for these slow periods, to refresh and provide greater training for staff and get them ready for when people come back.
Q: Do you expect brand standards to be relaxed, franchise fees to be forgiven for a short time, management contract renegotiations taking place?
BH: There’s going to be lots of give and take during this period. No one’s ever experienced this before and we’ve got to make sure that everyone comes through it together. That not only applies to owner relations but it also applies to all the people that we employ and work for, either the owner or the operator…
I don’t think much will change in the way of management contracts and negotiations. I’m sure there’s going to be some give and take whether it’s in franchise fees or it’s in greater support or it’s in helping to rebuild the funding. There’s lots of soft loans coming around. Hopefully there’ll be a lot of support for everyone to pull through with an even better product. But it’s going to take partnership. And I think partnerships work best, from my experience, with the smaller groups because the larger the group the more difficult it is for them to change things. The smaller it is the more exceptions you can make. This is a time, I think, that favors the smaller operators, and I’d like to think Minor is one of those kinds of operators.
Q: Do you expect any changes in the way hotels are cleaned or perhaps more reliance on robotics?
BH: There’s going to be so much more attention to cleanliness and hand-washing. I know it’s happening in the airline industry. It’s happening in the hotel industry. It’ll be awhile before the robotics will be able to take over some of those functions… That personal touch may become a lot less important as people don’t want to have as much personal touching as they’ve had. Social distancing is definitely going to be with us for a long time. I think antiseptic hand washes are going to be everywhere you can find them, and more people are going to be using them than they’ve ever used them before. At the end of this, we’re going to be healthier, (with) less chance of another pandemic.
Q: There’s been talk about a re-set allowing for a less dependency on OTAs. Do you think that’s a possibility, and how do you go about doing that?
BH: I think that is a possibility. We’re certainly reaching out to our guests much harder. We’re trying to build a bridge with our guests, much closer than going to an anonymous OTA. I think that certainly (companies) like Airbnb, which is going to have more of a challenge than they had. I think that’s already been well publicized. I think the market will change…
People won’t necessarily look for the cheapest solution sometimes. They’ll be looking for the more reliable one. Which company pays more attention to the safety of their guests and the staff and the cleanliness and the routine? Where will you feel more confident to take your vacation or your next business trip or if you have to have a conference with 200 people? Where will you hold it where you’ll feel comfortable? I think there’s going to be lots of changes and I think the OTAs are due for a bit of a shakeup, but we’ve seen that coming anyway. I think you’ve seen with the bigger players building their loyalty programs. I think now they’ve got a chance to strengthen.